How Well Do You Know Your Tax Preparer?

You've heard the saying "penny wise pound foolish". When it comes to certain services and purchases, I've learned through experience, that it's best to pay a little more to minimize greater expenses later.

Tax Preparation is one of them. Lucky for me, I have the best tax preparer in the world. However, in listening to friends and coworkers, there are nightmare stories that rival the most painful stories of car repairs and attorney's socking it to you. At some point, either the IRS will audit you, make inquiries or you will have to amend a past return and end up paying taxes. If you felt the sting of the latter--many would opt for a root canal instead.

When it comes to tax preparation, it's not so much the name of the company (Ie. H&R Block, Jackson Hewitt or CPA firm) but the person doing your taxes. Like I always say, "It's the not the name of the hair salon, but the actual person who cuts my hair that makes the difference."

In listening to the stories and experience of many individuals and couples for writing this post, collectively I have learned, the safest route is to hire a CPA from a CPA firm if you have a home, investments, other property, etc which is a more complex return. However, hiring a CPA is the most expensive route. If you can afford it, do not hesitate to hire one.

Companies like H&R Block and Jackson Hewitt are good, sometimes. It all depends on the person. These companies charge less than CPA firms, but if you have a complex return, you don't want someone who's only been doing taxes for two-three years. A plus about the known tax firm H&R Block, is that if the tax preparer makes a mistake, they correct it at no cost and assist you in every step. You are backed by a well-known company, a piece of mind.

Lessons Learned:
* Interview your tax preparer just like you would hire someone to work for you, such as contractor for your home remodel.
* Ask how many years the tax preparer has been doing taxes or ask to see their "certificate".
* Ask which is the most complex return they have completed.
* Ask if they are a CPA? (Even if they work at H&R Block, they could be a CPA)
* Unless you are single, with no property and investments, don't go to a mom -and- pop tax service. From the collective stories I heard, the rate of mistakes is high. If the IRS sends you a letter with questions about your return, the mom- and- pop services will not necessarily assist you or if they do, they charge more.
* Find a good tax preparer through recommendations of friends. However, if they have a relative do their taxes, reconsider. Hire a professional person that is recommended.

I highly recommend my tax preparer. Elizabeth is a CPA but she does not work for CPA firm. She enjoys doing taxes on her own and has many clients throughout the 25 plus years of her career. She charges less than CPA firm rate, and even a little less than H&R Block. Her service is a great value. When I once attempted to do my taxes on my own and did not feel 100% confident that I did it correctly, I went to Elizabeth to double check. She ended up finding additonal deductions and was able to get me $500 more in refund.

Elizabeth has clients from across the country. Most of them mail all their paperwork to her. Some even fly to Florida to meet with her. One client lives in another country but has property and investments here in U.S. I learned he always calls her in January to make is appointment with her in March.

The best part is that if you receive an inquiry from the IRS, Elizabeth is ready to help you. I once received such a letter (as we all do at least once in a lifetime) and since it was minor, she didn't even charge me.

In a brief interview of my tax preparer, I asked her why she does not charge as much as other CPAs. Elizabeth shared her story with me--how she sees the middle class pay the most relative to their income and struggle the most. It's her way of helping her community and country. Her clients come from all income levels, but most are "middle class". Hence she has a following of clients for many years.

She then added "I often gained clients from people who went to a mom-and-pop service only to receive a letter from the IRS. The person who originally did the tax preparation did not want to assist. When I reviewed the return, I would find many errors, and the customer ends up having to pay more in taxes. Despite having to pay more that year, if they returned, I was able to help them and explain how they may be eligible for other deductions. "

Before recommending my tax preparer, Elizabeth did warn me she has many clients and therefore can only accept a few new clients for the month of February and first two weeks of March.

If you would like her contact information, please email me at christine.michaels@yahoo.com.
With tax laws constantly changing, you want the right person for the job!