ALLENDALE, Mich. — With the federal tax deadline just under a month away, millions of Americans are still waiting to file — and experts say choosing the wrong tax preparer could cost you more than just time.
According to a study done by IPX 1031, up to a third of Americans wait until the last two weeks to file their taxes.
Jonathan Brignall, Grand Valley State University accounting professor, says that while finding the cheapest option may be tempting, vetting whoever handles your taxes is critical.
"They could wind up stealing from you by using, taking credits that you are entitled to, and taking the money; they could overcharge you. They could wind up making mistakes on the return or claiming things that are improper and cause you to get audited by the IRS," Bringall shared.
Here are some dos and don'ts when hiring a tax preparer:
Do look for proper credentials. Verify whether the preparer is an enrolled agent, a CPA, or an attorney.
Don't hire someone who is unwilling to sign the return or does not have a Preparer Tax Identification Number, known as a PTIN, issued by the IRS. The absence of a PTIN is a major red flag.
Do make sure the preparer is willing to provide audit support if the IRS decides to take a closer look at your return.
Don't file with tax preparers who base their fees on a percentage of your refund or who promise refunds much larger than other professionals.
Do check a preparer's history. The Better Business Bureau's website allows you to look up a tax preparer and see whether they have a history of complaints.
Brignall also warned that the risks of choosing the wrong preparer go beyond finances.
"There is a lot of personal information, and so there's always the risk of identity theft there."
According to the IRS, a good preparer will also ask for a taxpayer's records and receipts, will never ask a taxpayer to sign a blank form, and will have verified enrolled agent status with the IRS.
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