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Hiring Someone to Do Your Taxes This Year? Take These 3 Steps Before Handing Over Your Information

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I’ve yet to meet anyone who gets excited about taxes. Unfortunately, pretty much everyone needs to file a return to avoid fines and jail time. But the government doesn’t require that you file your returns personally.

Every year, millions of Americans hire tax professionals to do their returns for them. If you’re thinking about going this route for your 2023 taxes, take the following three steps first to make sure you’re working with the right person.

1. Check their credentials

This step is essential because tax season is also an identity thief’s favorite time of year. Many pose as tax preparers — and they will file your returns for you. But instead of doing it properly, they claim a load of deductions you don’t qualify for and then have the refund checks sent to themselves. And if you’ve handed over your Social Security number and other personal information, they could gain access to your bank accounts as well.

The easiest way to make sure you’re dealing with a reputable tax preparer is to use the IRS’s Directory of Federal Tax Return Preparers. All you need to do is enter your ZIP code and a mile radius you’re comfortable searching within. Then, you’ll be able to view all credentialed tax professionals in your area.

This tool is also useful if you want to look up a specific individual. But don’t assume they’re a scammer if their name doesn’t show up. That just means they don’t have any special credentials. In this case, you may want to do more digging into that person online and by asking around in your local area. Or you could just choose a different, credentialed provider.

2. Inquire about their experience

Traditionally employed workers who receive a W-2 form generally have straightforward tax returns, and there are many preparers who can assist them in filing theirs. But those with more complicated taxes may have to do some more research to find the right tax professional.

If you own your own business, for example, you want a tax preparer who understands the tax rules for your type of business, whether that’s a sole proprietorship, an LLC, or a corporation. Come up with a list of questions you have about your specific needs and contact the tax preparer you’re considering to ask them about their expertise in certain areas that matter to you.

Compare a few tax preparers in your area if you don’t like the answers you’re getting. Your taxes aren’t due until April 15th, so you still have time to look around before you have to commit to one.

3. Ask about their fees

Tax preparers generally charge a flat rate to file your taxes, but this can vary depending on the complexity of your tax return, the credentials of the tax preparer, and even the time of year. You’ll probably pay $100 at a minimum, and some charge a lot more.

It’s important to make sure the fees fit into your budget. If not, you might be better off searching for another tax preparer or filing your own taxes with tax-filing software. It doesn’t hurt to price out all your options before deciding which is right for you.

Be wary of any tax providers that charge a percentage of your refund check. Not only could this cost you more, but it could also incentivize them to claim deductions you don’t qualify for to inflate the refund — and their check. This could land you in hot water with the IRS if it turns out you don’t actually qualify for some of the deductions.

Now’s a great time to start gathering your tax documents together if you haven’t already and start researching tax preparers in your area. Keep in mind that some tax professionals stop taking clients as it gets closer to the April 15th deadline. So don’t put off your return for too long.

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