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Income Tax Talk - Finding a Tax Preparer

by: Annette M. Hall

Did you know that California and Oregon are the only two states in the country, which require tax preparers to actually be licensed? While that fact may give you a feeling of comfort if you live in California or Oregon, in all actuality, it shouldn't.

I am certain the law was written to provide some level of protection for the unsuspecting public, who find filing a yearly tax return a daunting task, you aren't any better off than individuals living in states without such extraneous laws on the books.

H&R Block is the largest company in the nation providing training to potential tax consultants, followed by Jackson Hewitt. I've personally been through the H&R Block tax course three times, each time in a different state. H&R Block only hires preparers who have actually completed their training classes.

While the course generally costs $199.00, I have never paid more than $20.00 to take the course. You see the closer it gets to tax season, the more likely they are to offer drastic discounts in their training course, in order to hire enough preparers to get them through tax season. Not only do they cut the cost but they cut the actual training time, cutting required instruction time from the normal 12-weeks of instruction to a mere 4-weeks.

It's been many years since I've either worked for H&R Block or attended their classes, so I decided to check out their website, their website doesn't offer any prices, so I called and was surprised to find their course is still $199.00. The same price they were charging back in the 1980s, when I first enrolled.

To be fair, I truly enjoyed the classes and learned something new every time I attended. That said, let me assure you that no one who attends just one four-week session is prepared to be a compentent tax preparer. While testing is required, participants earning just 70% or better receive a passing score. Today's tax software helps but in no way makes up for solid tax knowledge.

More Income Tax Articles

If you have been visiting the same tax preparer for many years, don't get too comfortable, unless you are confident they are keeping up with the current tax laws. Tax law can and does change dramatically from year to year and we've seen many changes over the past several years.
[Get the latest tax news].

Having been a tax consultant for many years, working in various office environments, I know first-hand that there are usually only one or two very compentent people in any tax office. The rest, however well-meaning should either not be doing taxes at all or need a great deal more training.

Before you totally give up on finding a reliable and knowlegable tax preparer, let me say there are some fine experienced preparers that are worth every cent they charge and more. With a few helpful tips you can know after a brief interview, whether or not your tax preparer is right for you.

The Interview

IRS Helpful Hints When Choosing a Return Preparer

After the Tax Forms are Completed

The IRS has additional information available on this topic. [See IRS Fact Sheet FS-2008-10.]

Income Tax Checklist [pdf]

Income Tax Checklist

I've provided a condensed two-page worksheet to help the average taxpayer compile his or her tax documents together. This worksheet is not exhausted and is not intended for business owners, who will need much more information to prepare their taxes.

Print off a copy of my Income Tax Checklist. Take it and your tax documents along with you on your appointment with your tax preparer. Be sure to jot down any notes and/or questions you may have on the reverse side of the worksheet. It's always a good idea to bring along last years return for comparision, if an error is found the return can be amended (within three years). Being organized and prepared can make the process much less painful and time consuming, saving you a return visit to your preparer.

While many companies offer "drop-off" services, I would caution against using them, unless of course you have been using the same tax consultant for years. It's my personal experience that dropped off returns tend to get pushed off onto the least experienced preparers and often don't receive the attention they deserve.

Tips on Choosing a Tax Advisor

Vernon Jacobs, CPA provides additional resources, which you may find useful. On his website he had this to say:

Finding ways to legally avoid taxes involves knowing the law, knowing what has been tried and failed, and knowing the penalties for being too aggressive. While the IRS instructions may tell you how to fill out a tax form, they don't explain the economic advantages and disadvantages of investing in a low income housing program, transferring income producing assets to children, investing in various kinds of investments other than stocks and bonds, contributing appreciated assets to a charitable annuity trust, electing to take part of your salary as a medical expense reimbursement and dozens of other alternatives. The IRS does not want to make it easy for you to find the financial alternatives that result in the least tax. They prefer that you do the opposite - that you pay the most possible tax.

Everyone dreads tax time but with a little time and effort on your part, you can help tip the scales more in your favor. Why pay the IRS any more than you absolutely have to?

If you have a question regarding the material covered in this article or an issue you'd like me to address, send your comments and questions to: Annette M. Hall

Updated: April 01, 2011

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