The deadline for filing your 2011 tax return is still two months away (April 17), but companies offering tax preparation services have already begun advertising heavily. Completing your tax return early will bring Uncle Sam’s refund check to your bank account sooner, but if you choose the wrong tax professional you could end up paying more than you will receive.
Generally, consumers complain that the tax preparer made errors in their return which resulted in fines and additional fees. In order to find a tax professional you can trust, use the following tips:
Research tax professionals with BBB first. Get referrals from friends and family on who they use and check out the company at centraltx.bbb.org to see their BBB rating and any complaints or advertising issues they may have. You should use BBB Member Pages to find BBB Accredited tax return preparation companies in your area.
Consider using a CPA or Tax Attorney. Only CPAs and tax attorney’s can represent you in Tax Court if you are audited. They have also completed extensive examinations on tax matters and must stay current on new tax laws by meeting continuing education requirements.
Watch out for companies that guarantee large refunds. No tax preparer can predict your income tax refund without going through your documentation first. Avoid using any service promising larger refunds than the competition and avoid companies that base their fee on a percentage of your refund.
Get an estimate for services in writing. The cost of preparing your return will vary depending on how complex your return is and how long it will take to complete. Before you agree to have a tax professional handle your return, get a firm estimate in writing.
Understand RALs before signing up. Refund Anticipation Loans (RALs) are short-term cash advances that can carry very high interest rates. Some tax preparers offer them to consumers as an immediate tax refund. However, this is not an actual refund from the IRS and you may have to pay the money back with interest.