How to Spot a Bad Tax Prep Service
Tax time is here and you're running out of time to file. If you haven't filed yet and you're thinking of going with a tax preparation service, here are a few ways to weed out the good from the bad.
I used to do my own taxes until I bought a house and got married. Then it got a little difficult, so we decided we were going to go with a tax prep service. A couple of years ago we got hosed big time, so we switched. Sure, it sucks paying for it, but taxes can be confusing and if you don't do it right, you could be audited and ain't nobody got time for that. Here are a few questions and things to think about when choosing your tax prep service.
Are They BBB Accredited?
When choosing a tax preparer, check the Better Business Bureau website first. If they aren't accredited or have a bad rating with the BBB, run away. When you hand over your tax documents, whomever you give them to has enough information to steal your identity and wreck your life. Either check online or make a phone call before you hand anything over to anyone.
What's Your Number?
If you're going to hire a tax prep service, they're required to have a Preparer Tax Identification Number or PTIN. If it's not clearly displayed, ask for it. If they can't provide it, run away. Someone who's properly licensed by the tax overlords at the Internal Revenue Service will have it at the ready.
Does the service promise you lots of money back? No everyone gets a refund. If your tax preparer promises you'll get money back, run away. Especially if they haven't even taken a look at your documents and they don't know your situation. If they're promising that you're going to get money back, it means that they're willing to file a fake return if they need to to fulfill their promise.
Do You Have Direct Deposit?
Speaking of refunds, the IRS offers direct deposit for your refund. If the company or people you hire to do your taxes should give you the option. If you're told by your preparer that you'll get your refund check after they collect their fee, run away. Reputable tax preparers collect their fee upon completion of your return and let you collect your money (or pay in) directly from (or to) the government.
What's The Charge?
Reputable tax prep services charge a flat fee, regardless of how much money you make. If your tax preparer tells you that they're going to charge you a percentage of your refund, run away. If they tell you that they're charging you a percentage of your refund, that means they're going to maximize your refund, even if it means filing a false return and making bad decisions.