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Money Management - Avoid Mistakes In Choosing A Tax Preparer
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Did you know that you are legally responsible for everything on your tax return, even if another person prepared it for you?
Did you also know that your tax return paints a unique picture of your financial situation that you can use to make smart financial decisions throughout the year?
Those are a few of the many reasons it’s so important to choose tax preparers who really know their stuff. There are some common mistakes people make in making this choice and the California Society of CPAs offers helpful solutions.
Mistake #1: Don’t Ask
What ‘Preparer’ Means
Anyone can use the title “tax preparer,” so find out what kind of training and experience the person actually has.
In addition, you should be aware that even some preparers who are “registered tax preparers” with the Internal Revenue Service may have only met certain minimal requirements.
A certified public accountant, on the other hand, must meet rigorous education standards and pass the demanding Uniform CPA Examination. CPAs are also required to receive continuing education throughout their careers to keep their skills sharp.
They also meet high ethical standards in order to keep their licenses.
Mistake #2: Don’t Ask
About Experience
Remember that CPAs have hands-on experience helping a variety of clients understand how to comply with the tax laws and minimize their tax outlays. They are familiar with overlooked deductions and with common mistakes made on returns. That means that you can rely on their unique level of expertise to spot challenges and opportunities in your tax filing.
In choosing a preparer, ask how long he or she has worked with clients in situations like your own and whether he or she can offer advice on the financial issues that are on your mind.
Solid experience and training are particularly important if your return will be more complex than average.
That could be the case if you are self-employed, for example, or if you are dealing with estate issues, a small business or other complications.
Mistake #3: Don’t Ask
Questions About Fees
To avoid surprises later, determine how much the preparer will charge up front. A preparer’s fees may vary based on the complexity of your return and other factors. And while more experienced preparers may cost a little more, the savings or other financial advice they can offer may actually cover some or all of any added expense.
Keep in mind, too, that you should avoid working with someone whose fee is based on a percentage of your refund or on how much they can save you in taxes. It’s a good idea to ask, too, whether the preparer can represent you before the IRS in case your return is audited and what extra charges might be involved.
Mistake #4: Don’t
Review Your Return
Once It’s Done
Be sure to look over your completed return to ensure you understand it. If you see anything that you believe may be incorrect or that just doesn’t make sense, contact your preparer and ask questions.
Mistake #5: Set Your
Return Aside And
Forget About It
Did you pay too much in taxes last year? Are you taking the right steps to prepare for retirement, a child’s college education or other long-term goals? Your tax return, which contains vital information about what you earned and how you spent it, can help answer those questions and many more.
Best Advice: Turn to
Your Local CPA
If you do have more questions about your tax situation or about any aspect of your financial life, be sure to consult your local CPA. He or she has the expertise to advise you on all your financial concerns.

The Money Management columns are a joint effort of the AICPA and the California Society of CPAs as part of the profession’s nationwide 360 Degrees of Financial Literacy program.