The deadline’s approaching for taxpayers to file their 2012 tax returns. Better Business Bureau encourages taxpayers to use caution when selecting last-minute tax preparation assistance to avoid unforeseen penalties or fees:
- Get references and do your research. Get referrals from friends and family on who they use and check out the company at bbb.org to see its history of complaints and other background information on the company.
- Look for credentials. Seek a tax professional who is an Enrolled Agent, Certified Public Accountant or a Tax Attorney. These preparers have completed extensive examinations on tax matters and must stay current by meeting continuing professional education requirements. Only CPAs and tax attorneys can represent you in U.S Tax Court if you are audited.
- Get a firm estimate in writing. The cost of preparing your return will vary depending on the complexity and completeness of your information. Before you agree to move forward, present all of your information and get a firm estimate in writing.
- Don’t fall for the promise of a big refund. Be wary of any tax preparation service promising larger refunds than the competition, and avoid tax preparers who base their fee on a percentage of the refund.
- Keep in contact. Many tax preparation services only set up shop for the months leading up to April 15. In case the IRS finds errors, or in case of an audit, you might need to be able to contact your tax preparer throughout the year; be sure to use a company you can stay in touch with.
- Avoid Refund Anticipation Loans. Tax preparers often offer refund anticipation loans to allow you to immediately receive your tax refund; however, this is not an actual refund from the IRS, but an inflated short-term loan from the company typically with a high interest rate. To avoid RALs, consider filing your taxes electronically and requesting to have your money deposited directly in your account.