Not the DIY type? Tips to find a tax preparer

[February 11, 2012]  NEW YORK (AP) -- If your financial life is simple and you have basic computer skills, using do-it-yourself software is an "EZ" way to file your tax return.

But if you're nervous about preparing your own taxes, don't have time, had a major life or job change last year or simply think the tax laws are too complex, you're not alone.

About 60 percent of all returns are filed by professional preparers, according to the Internal Revenue Service. Officials at H&R Block, which prepared one out of every six tax returns last year, told investors recently that the growth in the software market has come mainly from do-it-yourselfers who switched from paper to digital, not from taxpayers who switched from paid preparers.

But how do you find a tax preparer you can trust? Here are a few tips:

1. Ask around.

Tax professionals say the best way to find someone is through an old-fashioned, word-of-mouth recommendation. Ask friends and family members who they use, and why they would recommend their preparer.

If you're expecting to claim a lot of business-related expenses, ask colleagues from work or professional organizations if they know a preparer who focuses on your industry. If you have a small business make sure, at a minimum, that the person has worked a lot with small businesses, preferably within your field, advised Melissa Labant, the director of tax advocacy for the American Institute of Certified Public Accountants.

2. Make a few calls.

Before committing, speak to two or three candidates and ask about their experience and their approach. Get a list of their base fees, but remember that fees may change depending on the complexity of your return and the training and education of the preparer.

Also confirm that the individual or the firm will be able to represent you before the IRS, if there are questions about your return or if you're audited.

3. Check credentials and history.

Make sure any preparer you consider has a Preparer Tax Identification Number, or PTIN, which is required by the IRS to file as a professional.

Check for complaints filed with the Better Business Bureau and your city or state consumer protection agency. And check out disciplinary issues and license status with your state board of accountancy for CPAs, state bar associations for attorneys, or the IRS Office of Professional Responsibility for enrolled agents.

Most important, make sure you're comfortable with the preparer. It's important because, even if you hire someone to prepare your return, you're still ultimately responsible for what it says.

4. Be prepared for questions.

"It's important that the person who's preparing your return knows something about you, so that you get the proper deductions," said Ellen Minkow, a certified public accountant with her own New York firm. "You need somebody who really dives in and asks you questions about what happened to you this year."

Minkow noted that once you find the right preparer, you will likely establish a relationship that lasts for years. Accountants and other professionals may also provide advice on other aspects of your financial life, including long-term planning, investments and home buying.

4. Look for warning signs.

If your preparer does any of the following, it's a sign of a problem that should make you think twice about filing the return:

• Asks you to sign a blank return.

• Indicates that it is OK to include false or misleading information to boost your refund.

• Refuses to sign your return or include his or her PTIN.

As Minkow put it, "You do not want that person who's working in the back of the bowling alley and telling you to go file yourself."

[Associated Press; By EILEEN AJ CONNELLY]

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