Tag: tax professional

Be Prepared for Next Tax Season

The holiday season is upon us, and tax season will be here before you know it. Filing your tax returns is not exactly a festive time, but, just like the holidays, the season will be less stressful if you are prepared. Even though the year isn’t over yet, starting early reduces stress and confusion caused by rushing to meet a deadline. Plus, you have time to review your situation for tax savings or other strategies that may still be available before year-end, such as contributing to a retirement plan.

Whether you file your own tax returns or engage a tax professional, these three tips will help you be prepared for next tax season:

  • Pandemic-Related Items 

Various pandemic-relief and other tax changes could impact the information that you need to gather when filing your 2021 income taxes. The expanded Advance Child Tax Credit was authorized by the American Rescue Plan Act in March. Monthly advance tax credit payments started in July, based on the parent’s 2020 reported income, or the 2019 income if a 2020 return was not filed. The March tax act also included a third round of Economic Impact Payments, depending on a taxpayer’s income level and family size. 

  • Tax Estimates and Withholdings

Did you owe a lot when filing your 2020 returns, or did you get a big refund? An IRS Paycheck Checkup is an online tool to make sure that your withholdings will cover your anticipated tax liability https://www.irs.gov/paycheck-checkup.Taxpayers with investment, self-employment or other non-wage income can check if they need to make a larger or smaller quarterly estimated tax payments at https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes.

  • Organize Tax Documents

Use your 2020 tax return to identify documents that you’ll need to accumulate in preparation for next tax season. Start printing the charitable donation letters and real estate tax bills to cut the delay when the 1099s and W-2s are released or mailed to you. If a life event in 2021, such as buying a home, starting a business, or changing your marital status, you need to check out how it impacts your taxes. You might need a tax professional to help you plan for and understand the tax impacts of life changes.

Follow these three tips to be prepared for next tax season. And one last thing. Supply chain issues hit the tax profession just like it’s hit the store shelves. If you plan to engage a tax professional for your 2021 preparation, start looking now. There’s a shortage.

Getting Help to File Your Taxes

If you requested an extension to file your 2020 income taxes, the final due date is coming up in just a few weeks, on October 15th. That date sounded a long way off back in April or May when you extended. My, how time flies when you’re having fun…or when you are procrastinating. 

Maybe you were putting off your tax filing because you had questions, or because your situation was more complicated than before. Is it too late to get help to file your taxes? No! Finding a tax preparer isn’t too hard. There are many to choose from. The challenge is finding someone who is knowledgeable, experienced, and dependable. Taxes are personal, so you also want someone with whom you feel comfortable confiding your financial details.

How do you find that elusive experienced and dependable confidant to prepare and file your income tax returns? Well, you can ask friends, hit the Internet, or head to the local tax preparation office. Ideally, you should interview two or three recommended tax preparers to feel confident that she or he is qualified to accurately prepare your income tax return, and that you feel comfortable interacting with her or him.

Use these three interview questions to get help to file your taxes:

  • How Do You Keep Up with Tax Law Changes?

Tax laws are constantly changing. Think about all the recent updates due to COVID-19, on top of the 2017 Tax Cuts and Jobs Act that contained sweeping changes. Your tax preparer should keep up with all those changes, so you don’t have to. A qualified tax person will describe attending conferences, webinars, or other methods to stay current.

  • What Experience and Credentials Do You Have?

Tax preparation is an unregulated industry where anyone can participate, so asking about years of experience, training and education is essential. Preparers with professional credentials, such as a CPA or Enrolled Agent (EA), are required to complete annual continuing education requirements and follow ethical and professional standards. 

  • How Do You Communicate with your Clients?

Does the tax preparer meet regularly with clients? Is she or he available to you if a tax-related question or issue comes up? Make sure you feel comfortable with the tax preparer’s style, manner, and process. If not, keep looking. You’ll be sharing a lot of personal information so you must be comfortable.

It’s not too late to get help to file your 2020 income tax returns. Even if you’re in a rush, make sure you ask the three interview questions necessary to get an experienced and dependable confidant to prepare and file your income tax returns. More tips and tools for getting tax help are on the IRS has a website at https://www.irs.gov/tax-professionals/choosing-a-tax-professional.

Summer School for Tax Preparers

In the last few weeks of summer, many taxpayers are headed to the beach. But for nearly 11,000 tax preparers across the country, it’s time for Summer School, also known as the annual IRS Tax Forum. The IRS provides the Tax Forum every summer to help tax professionals keep up with tax law updates and issues that affect their clients.

Why does this matter to you? Taxpayers need to keep up with the income tax changes on their own or hire a tax preparer who does it on their clients’ behalf. Taxpayers are responsible for all the information on their income tax return, no matter who prepared it. Hiring a tax preparer who keeps up is essential, especially in years when there are multiple tax law changes (like now).

Feel confident that your tax return is prepared by a qualified tax preparer who keeps up with all the tax law changes by following these five tips:

  1. Ask about professional credentials, such as a Certified Public Accountant (CPA) or an Enrolled Agent (EA). Credentialed return preparers are required to fulfill annual continuing education. The IRS maintains a Directory of Federal Return Preparers with their credentials and qualifications at https://irs.treasury.gov/rpo/rpo.jsf.
  2. Verify that the preparer has a Preparer Tax Identification Number (PTIN) and enters it on your return that is electronically filed with the IRS. Tax preparers who charge a fee are required to have a PTIN and to file returns electronically or submit a reason for paper filing with the return.
  3. Inquire about the tax preparer’s education and training, and how she or he keeps up with tax law changes and IRS processes. Tax pros who are not a CPA or EA should still get annual tax updates to keep up their knowledge. 
  4. Ask about service fees and get a cost estimate in writing. Steer clear of tax preparers who base fees on a percentage of the refund, or who want their fee paid by direct deposit from your refund. These are both unethical practices prohibited by IRS regulations.
  5. Make sure the tax preparer is available all year, after tax season is over, in case you need her or him. For example, notices can come from tax agencies any time of the year. Tax projections sometimes need refreshing before estimated tax payments are due again. 

Getting dependable tax services starts with selecting a qualified tax preparer who keeps up with tax law changes and issues. Whether that person went to Summer School for Tax Preparers or not, following the five tips above will help you to get qualified tax help. 

Need more? The IRS has it for you at https://www.irs.gov/tax-professionals/choosing-a-tax-professional.

Finding a Tax Pro

Finding the right tax professional to “fix” your taxes is a lot like finding the right plumber or to fix your kitchen sink. There are many to choose from, but it’s a challenge to make sure you find someone who is knowledgeable, experienced, and dependable. With a tax pro, you also want someone with whom you feel comfortable confiding your financial details.

So, how do you find that elusive experienced and dependable confidant to prepare and file your income tax returns? Well, you can ask friends, hit the Internet, or head to the local tax preparation office. That can get you a few tax pros to interview. Yes, interview. Plan to interview two or three recommended tax pros to feel confident that she or he is qualified and that you feel comfortable interacting with her or him.

These three interview questions are a “must” for finding the right tax pro:

  • How Do You Keep Up with Tax Law Changes?

Tax laws are constantly changing. Some changes are major, as we saw three years ago with the 2017 Tax Cuts and Jobs Act. It’s important to work with a tax preparer who keeps up with all those changes, so you don’t have to. A qualified tax preparer will describe attending conferences, webinars, or other methods to stay current.

  • What Experience and Credentials Do You Have?

Tax preparation is an unregulated industry where anyone can participate, so asking about years of experience, training and education is essential. Preparers with professional credentials, such as a CPA or Enrolled Agent (EA), are required to complete annual continuing education requirements and follow ethical and professional standards. 

  • How Do You Communicate with your Clients?

Does the tax preparer meet regularly with clients? Is she or he available to you if a tax-related question or issue comes up? Make sure you feel comfortable with the tax preparer’s style, manner, and process. If not, keep looking. You’ll be sharing a lot of personal information so you must be comfortable.

Plan to interview two or three tax pros referred by friends or online reviews to find a tax professional who is knowledgeable, experienced, and with whom you feel comfortable confiding your financial details. Need help getting started? The IRS has a website for you with tips and tools – https://www.irs.gov/tax-professionals/choosing-a-tax-professional.