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Choosing a Reliable Tax Professional: The Ultimate Guide

filing tax returns record keeping tax season tax secrets book Mar 12, 2023
tax accountant sitting at desk preparing tax returns with tax that asks the question of the home-based business owner is at risk of the tax person making errors on their tax return

Many taxpayers turn to tax professionals to help them prepare their federal tax return. Always choose tax preparer with great care. While most tax return preparers provide quality service, unfortunately some are unreliable or even fraudulent.

Most tax preparers just file what you give for receipts "the shoebox method". It’s not always about what price they charge and if they are taking clients this time of year. Be careful, there's lots of uneducated tax preparers. Lots of sharks in the water just looking to make a few dollars filing taxes during tax season.

You might be thinking “oh, my tax person is takes care of all this for me, they have been doing this for me for many years". Even if they are "filing your taxes", no everyone is well versed in home-based business tax write offs.

Even some of the old-time tax preparers that have been around a long time are not well versed on what you can write off in your home-based business, and many still do not even offer tax strategies to claim more in an effort to reduce taxes.

In Chapter 10 in my book titled The Home-Based Business Guide to Write Off Almost Anything, I went into detail on how to select a tax preparer should you feel filing yourself is not an option. What to look for? What is the difference between a CPA and someone who “says they are a tax preparer”? How the IRS and CRA regulate those who offer tax preparation services.

When using a tax preparer, taxpayers should:

  • Look for a tax preparer who’s available year-round in case questions come up after filing season is over.
  • Ask about service fees. Taxpayers should avoid tax preparers who base their fees on a percentage of the refund or who offer to deposit all or part of the refund into their own financial accounts.
  • Ensure their preparer offers e-file of tax returns.
  • Providing records and receipts. Good preparers ask to see these documents.
  • Understand the preparer’s credentials and qualifications and review their history for complaints or disciplinary actions.
  • Never sign a blank or incomplete return. Taxpayers are responsible for filing a complete and correct tax return.
  • Review their tax return before signing it and ask questions if something is not clear or appears inaccurate.
  • Make sure any refund will go directly to the taxpayer’s bank account – not into the preparer’s bank account.
  • Taxpayers should review the routing and bank account number on the completed return and make sure it’s accurate.

Remember, taxpayers are ultimately responsible for all the information on their income tax return, regardless of who prepares the return. At at the end of the day YOU are responsible for your tax return. YOU will be the one who will answer to the audit should the IRS or CRA come calling!

The IRS recently issued excellent advice for tax payers. This is also applicable also applicable for those in Canada. The most of the common errors taxpayers make on their tax returns are easily avoidable.

  • Inaccurate information: Taxpayers should make sure they report the correct amounts. This includes any information taxpayers need to calculate credits and deductions.
  • Math mistakes. Math errors are some of the most common mistakes. They range from simple addition and subtraction to more complex calculations. Taxpayers should always double check their math.
  • Bad tax preparers: Taxpayers should remember they, not the tax preparer, are responsible for the information on their tax return.

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Take the Mystery Out of Home-Based Business Tax Write-Offs!

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