3 Questions to Ask Your New Tax Preparer

When you need legal assistance, you (hopefully) don’t flip through the phone book to the attorney section and pick a name at random to hire.  When you need medical care, you don’t drive around and stop in at the first place you see that says doctor on the door.  So why would you choose just anyone to hire to prepare your tax return?  

Or for that matter, use a chain tax service where you don’t have a chance to even speak to your assigned tax preparer until you actually start the tax return process?  

Some people already have a tax preparer that they trust and have been with for years.  Most likely, I am not speaking to them with this message (unless you are looking to switch in which case you should pay attention too).  No, this message is for those who are still searching for the right person to handle the task of preparing their taxes.

The thing to remember is that you are hiring someone to do work for you.  You should treat it just like you were interviewing an employee, because, essentially it’s the same type of arrangement.

personal tax return
You shouldn’t have to lay out good money for bad service. Do your homework before hiring a tax preparer.

 

During this time of the year, you will hear commercials for the popular national chains on the radio and see them on tv, read about the local guys on craigslist.com or in your local paper, and even hear about a “friend of a friend” whose sister used this guy out of an “office” with the shades drawn who got them a huge refund that was more than they thought was possible.

Unfortunately, there are plenty of unscrupulous folks out there that will mislead/misguide you, pay no real attention to you, or simply do a horrible job. 

Now, there is no perfect way to find out about a person/company, since as of now, there is no licensing requirements to be a tax preparer, but there are steps that you can take to ensure that you are getting someone qualified, and the best way is to ask questions.

 

  • First and foremost, ask what kind of qualifications the actual preparer has (especially if you are going to a franchise).  Ask about the education of the preparer, the nature of their primary career (whether or not they have a background in accounting or tax law), how long they have been preparing returns, and the complexity of the returns they have experience with.  Some of the chains will hire people after a brief course which only touches on the basics of tax law and theory.  

    There is no way that anyone should be entrusted to touch another person’s taxes after only having a week’s worth of training.  Especially important is when using these franchises, who are notorious for using inexperienced preparers, but they also tend to hire people who are doing this as a supplementary income source and may not put as much care and effort into your return. 
     
     

  • Another crucial question to ask is how the preparer will be paid.  Accountants who prepare taxes within a firm are almost always strictly on a salary.  They get paid the same rate regardless of how many returns are prepared or how much the billings run.  On the flip side, I have noticed that many ads looking for tax preparers are offering only commissions or are a low salary/bonus situation.

    This method of payment practice doesn’t seem very ethical to me (just a personal view).  It suggests that the company is only interested in volume.  When volume is a primary concern, the speed with which the returns are prepared is paramount to the quality with which they are prepared.  Under those circumstances, not only can mistakes me made more easily, but also the amount of attention each tax return (as well as the customer) will receive is decreased.  That might bode well for the individual preparer and for the company, but for the taxpayer; it is plain dangerous for the taxpayer.
     
     

  • Don’t forget to ask about the company pricing policies, either.  It is just as important to understand and be comfortable with how much you are going to have to pay before you get invoiced (which is generally upon delivery of the completed product).  Every firm has a different way of charging for their services: by the hour, by the project as a whole, by the project broken down with a base price and additional fees for each schedule.  Whatever the method, anyone charging too little should be second-guessed just as much as someone charging what appears to be too much.  Don’t be afraid to call around and ask for quotes, even if they aren’t exact, as well as go in and meet people in person to see what kind of feeling you get. 

 

Overall, there is more than simply the cost that should go into your decision as to who and where you get your taxes prepared.  In my personal experience, you will pretty much get what you pay for.  If you pay a little, you will get shoddy service both on the return as well as follow-up treatment. If you pay what seems to be an exorbitant fee, you are most likely paying for more than just a tax return but not receiving any value in exchange. 

Some preparers are not very friendly, and are all about business, while others will talk your ear off and make you wonder if they ever get around to doing any actual work.  The choice ultimately comes down to who makes you feel the most comfortable, but no matter what direction you choose to go, having as much information as possible will help you make the best choice.