Cents and Sensibility
Cents and Sensibility
Picking a good
tax preparer
Now that it's tax season again, you may be looking around for someone to do your taxes. Here's a suggestion: Don't accept the friendly offer from your brother-in-law who claims to be real good at math.Tax preparation can be complicated. If you do want some personal help, you'll need to turn to a professional. But how can you find one? Should you just look in the Yellow Pages under "Tax Preparation?"
You could, but there are better ways. Start by asking your friends or relatives who they use. If they can recommend someone they've had good experience with, seek this person out, but don't automatically hand over your 1040. Before you sign on the dotted line, ask some questions. Here are some you might want to use:
Credentials
Are you accredited? A lot of people claim to be "tax preparers." But they're not all experts -- or even professionals. Make sure the preparer you're considering has the proper credentials, either as a tax attorney, a certified public accountant or an "enrolled agent" -- someone who can present you before the IRS in case of an audit. Usually, these people are required to attend continuing education classes -- a big plus for you, since it means they'll be familiar with the latest tax law changes.
Fees
How much do you charge? It's a basic question, but an important one. Find out, right up front, how much you can expect to pay to have your returns done. See if this fee includes any additional services, such as taking care of amended returns. And find out what, if any, liability the preparer will assume if he or she makes a mistake on your return, causing you to be penalized by the IRS.
Client profile
Do you have experience working with people like me? This might be the most important question of all. You'll want someone who is familiar with your general situation. For instance, if you're self-employed, you'll want someone who has worked with people like you, and who knows all the various deductions you can claim, the business expenses you can write off, etc.Tax preparers work very hard during tax season. In fact, some of them work so hard that they take several months off when the season is over. But you could have a question about your taxes at any time. Maybe you want to know the tax consequences for converting a Traditional IRA to a Roth IRA. Or maybe you want to donate some appreciated stock to a charity, and you want to find out how this might affect your tax picture for the year. Dozens of issues could arise outside tax season -- which is why you'll want to pick someone who is available the year round.
Help yourself
Here's one more point to keep in mind: Help your tax preparer out as much as you can. Don't make him or her scrounge through shoeboxes full of tattered slips and receipts. Stay organized throughout the year.Keep good records and save all your financial statements. Your preparer will thank you -- and you'll help your own cause.
Guy Steele is a financial planner and head
of the Pali Palms office of Edward Jones. Send
planning and investing questions to him at 970
N. Kalaheo Ave., Suite C-210, Kailua, HI, 96734,
or by email at: gsteele2@pixi.com