How to prepare a Tax Return?
The answer depends on the type and amount of tax you are entitled to pay. However, in each case, information security and privacy is normally a question when it comes to deciding who you pay to prepare a tax return. From my point of view, anyone can prepare a tax return for someone else.
Tax professionals have varied capabilities and skills which requires a taxpayer to carefully choose who to consider for tax preparation. And as a matter of fact, not all tax preparers who show up when you need them, have the authorization to conduct the services such as during an audit.
Skills a good Tax Preparer should have!
As noted earlier, anyone can perform tax preparation for someone else. However, the catch is in the degree of the quality of the service offered by that ‘anyone’. A friend can prepare a tax return for his fellow using a dedicated software. These are some of the skills you should give thought to when selecting a tax preparer.
A good tax preparer should be:
- A tax advisor: the tax preparer should be able to provide advice on tax planning decisions.
- Preparer- the person should prepare and sign his name to verify that, in fact, he (the tax preparer) performed the preparation. For IRS, tax preparers are required to have Preparer Tax Identification Number (PTIN).
- Tax court representative- the person should intervene in the auditing process by the tax bodies such as IRS or even tax court matters.
Who are these Tax Preparers?
There are many tax preparers; professionals with great expertise and those without professional credentials. However, it has been found out that taxpayers fall into the wrong hands of ‘anonymous tax preparers’. These are some of the tax professionals:
Certified Public Accountants (CPA)
A Certified Public Account is authorized by the state or country to act as a public accountant. As a matter of reality, all CPAs are public accountants, but not all public accountants are CPAs. This simply implies that, in fact, there are accountants who emerge out of nowhere to masquerade as certified professionals. The consequences of letting your tax returns prepared by unqualified staff are clear. Errors and omissions conducted by tax preparers will have the taxpayer (the business owner incur extra costs such as fines and penalties).
An enrolled agent is a person who has been given the benefit of honing before the Internal Revenue Service (IRS), which incorporates getting ready and recording reports, speaking with the IRS, and speaking to citizens in issues including the IRS, including charge reviews.