Profitt Report: How to choose the right tax professional

Photo credit: MGN

You could file taxes yourself or turn to a professional. It’s a personal choice, but choosing poorly could leave you with fines, fees or worse.

consider all the information you’re freely handing over to another person: your name, birth date, social security number, etc. In the wrong hands, this data could wreck your finances.

“Choosing a tax professional is one of the most important decisions you’re going to make this year,” said Luis Garcia, IRS spokesperson.

A fraudulent tax preparer could do some real damage with your person information, he said: steal your identity, your spouse’s and even your kids.

“Either that tax payer is going to have to pay that back, maybe charged with fraud, may find themselves with penalties and fees on top of having to pay that money back,” Garcia said.

Here is what you need to find out before handing over your information:

  • Be sure they have a preparer tax id number.
  • Check their history: the Better Business Bureau is helpful. You can alos see if they have disciplinary actions on their licenses.
  • Be sure they will sign your return: your preparer’s signature and that preparer tax id number should appear on your return.

Next, how do they determine their fees?

“If you're dealing with somebody who is going to charge you as a percentage of your refund, that's a big red flag. They may not know your tax situation, how did they know you were going to get a refund other than they are going to do something shady,” Garcia said.

You’ll also want to ask about their digital security. Since you’re giving them so much sensitive information, you want to make sure it is being protected on their computers. For more input on how to choose the right tax professional, please click here.

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