Americans hate doing their taxes. Even though the Ides of March are now upon us, millions of taxpayers are still putting off the task. Even many who are expecting a refund.
This year even more Americans are procrastinating: There has been an 8 percent drop in the number of tax returns the IRS has received compared with the same time-frame last year.
The Good News:
You don't have to file by April 15 this year.
Before you get too excited, you're only getting three extra days. Federal income tax returns are due by April 18 this year because April 15 falls on Saturday, and that following Monday, April 17, is a holiday in Washington D.C. So, Tuesday, April 18 it is.
More Good News:
You don't have to prepare your taxes at all. There are professionals for that.
Members of the National Society of Accountants (NSA), Enrolled Agents and CPAs have experience in filing almost all types of returns, and virtually any special situation that might come up. And all reputable tax professionals will use their expertise to find the most beneficial tax results.
Tax Preparation is Affordable
A recent NSA survey shows the average cost for a professional to prepare an itemized Form 1040 plus a state return is just $273, and the average cost to prepare a non-itemized return plus a state return is only $176.
By comparison, even though most online self-file tax programs tout free federal returns, their extra fees can easily pass $150 or more when taxpayers add special credits, deductions, a state tax return and any business activities. A professional preparer also adds something that an online program can't: Peace of mind that the return has been properly (and legally) filed.
“It usually takes people more than five hours to prepare an itemized return – five hours that you won’t get back,” says NSA Executive Vice President John Ams.
“Plus a professional tax preparer is likely to find a deduction that you might miss on your own, and that alone could pay for the fee and even make you money.”
Credentialed professionals have experience, know the tax law, and adhere to codes of ethics. They won't promise huge returns, but will promise to help you make the most out of the situation, whether it's a refund or not.
What to Look for in a Tax Pro
Some credentials and qualifications to look for include Enrolled Agent (EA), Certified Public Accountant (CPA), Accredited Tax Preparer (ATP), Accredited Business Accountant/Advisor (ABA) and Accredited Tax Advisor (ATA), tax attorneys and 2017 IRS Annual Filing Season Program participants. Some states also have licensing requirements for tax preparers. For more information, visit www.chooseataxpro.org/guidetocredentials.
Follow these tips for choosing a tax preparer:
- Check to be sure the preparer has an IRS Preparer Tax Identification Number (PTIN). The Internal Revenue Service (IRS) requires all paid tax preparers to have a Preparer Tax Identification Number (PTIN), so make sure your tax preparer has one enters it on your return. Paid preparers must sign returns and include their PTIN as required by law. The preparer must also give you a copy of the return.
- Check the professional credentials of the preparer (such as EA, CPA, ATP, ABA or ATA), and see if they belong to a professional organization or regularly attend continuing education classes. Tax law changes can be complex; a competent tax professional needs to be up-to-date in these matters. Tax return preparers aren’t required to have a professional credential, but make sure you understand the qualifications of the preparer you select.
- Avoid preparers who base their fee on a percentage of your refund or those who say they can get larger refunds than others can.
- Make sure your preparer offers IRS e-file. Any tax professional who gets paid to prepare and file more than 10 returns generally must file the returns electronically. It’s the safest and most accurate way to file a return, whether you do it alone or pay someone to prepare and file for you.
- Do not rely on a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.
- Reputable preparers will ask to see your records and receipts. They’ll ask you questions to determine your total income, deductions, tax credits and other items.
“Tax preparers are professionally responsible for the returns that they file on behalf of taxpayers,” Ams notes. “They should be prepared to help you respond to any questions the IRS may ask about your return. So make sure they will do that if needed.
“NSA has urged Congress and the Internal Revenue Service for years to require tax preparers to be regulated. NSA members are honest, highly qualified professionals and we would welcome this oversight because they could easily meet any regulatory requirements the IRS or Congress would impose.”
It’s also a good idea to check the preparer’s history. You can check with the Better Business Bureau to find out if a preparer has a questionable history. If you are not satisfied with the answers you receive, keep looking.