Being prepared for your tax appointment can really pay off in
terms of maximizing deductions and minimizing tax as well as
lowering fees charged by your preparer! Additionally, you should
be able to walk away from your tax appointment with peace of
mind that your returns are complete and accurate and maybe even
with some tax savings advice that you can really use.
Finding a Preparer
First of all, finding a tax professional to work with is a very
important decision. A tax professional is not only a tax
preparer, but someone who can provide you with advice on tax
issues and assist you with tax planning. You want to find
someone who is not only professional and competent, but who is
also a good fit for you and your specific needs.
Selecting a preparer solely based on price is not necessarily in
your best interest. Preparers who are preparing many returns at
lower prices may be more concerned with the quantity of returns
prepared than the quality of the returns prepared. Returns that
are rushed through may have errors or omissions which you are
ultimately responsible for. A thorough, accurate return where
deductions have been maximized legitimately should be your
primary tax preparation goal.
If possible, it is best to assess your situation and look for a
preparer early. This will allow you more time to find a preparer
that is a good fit for you and to possibly even take advantage
of a tax planning consultation that could save you more money in
taxes. Keep in mind that if you wait to call around until tax
season (mid-January through mid-April), it may be challenging to
find someone who will be willing or able to speak with you over
the phone in much detail about your specific situation.
If you find that it is tax season already and you have not
decided on the tax professional that you will be using, there
are a few ways that you can find out more about some of them
without taking up much of their time on the phone. If you have
access to the Internet, you can check out websites of local tax
professionals to find out more about their businesses, their
credentials, and the services that they offer. You can also
check with family and friends to get some referrals.
One last point about finding a tax preparer that you really need
to know – they are not all the same! Did you know that only a
few states require any kind of licensing or registration of
preparers? Thus, in most states, just about anyone can open up a
tax preparation business. Did you know that they all do not have
full-time, year-round hours? This is important in case you have
questions or problems after your taxes are prepared. You should
do your homework when checking out potential preparers - find
out about their licensing/credentials, education, experience,
and availability throughout the year. Two professionals that you
should consider in your search are Certified Public Accountants
(CPAs) and Enrolled Agents (EAs). They each must meet strict
criteria to obtain their designations as well as adhere to a
strict code of professional ethics and meet annual continuing
professional education requirements.
Getting Prepared and Organized
Once you find a preparer that you want to work with, you will
want to be well prepared and organized to ensure that you get
the most from his/her time and service. Being organized and
prepared can reduce not only your tax liability, but your tax
preparation fees as well.
Before proceeding with the actual pre-meeting preparation steps
and specific items that you should bring to your tax
appointment, it should be noted that all preparers do not
actually meet with their clients face to face to prepare their
returns. Some just have clients drop off or mail their
information. Once the returns have been prepared, they mail the
returns to their clients or have the clients pick them up. Would
you feel comfortable not meeting with your family physician for
your child’s annual physical exam? There is so much more you can
get out of the tax preparation process by meeting and working
with the preparer!
The following are steps that you should take before meeting with
your tax preparer:
•Schedule your appointment early. The earlier in the tax season
you schedule your appointment, the less likely it will be that
your preparer is dealing with many stressed-out, last-minute
clients. Additionally, you will be more likely to get an
appointment for a day and time that fits well into your schedule.
•Review last year's return. This will remind you of any tax
issues or situations that you will need to discuss with your
preparer as well as remind you of items that you will need for
your appointment.
•Organize all receipts and paperwork. The “shoebox” or similar
method is not the best for your tax appointment, unless you want
to pay your preparer to sort, organize, and add up receipts.
Have your receipts organized and totaled by category. Have other
relevant documents organized by category.
•Gather all tax-related mail that you receive to include
pre-printed tax forms, tax booklets, and tax reminder notices.
These items often will include information that is helpful to
your preparer in regards to your situation. Many tax clients
assume that because their preparer uses tax software that there
is no need to bring these items to their tax appointment.
•Prepare information on unusual situations. If you have any
unique tax situations or liabilities, prepare to discuss them.
This includes any past problems you may have had.
•Bring relevant computer data files. If you track your finances
with a program such as QuickBooks or Excel, bring the data
file(s) with you. Having the data file(s) handy might assist in
answering any last minute questions. Call first to make sure the
preparer's office supports your file format.
•Brush up on relevant tax law/tax changes. While this it is not
always possible for the non-tax professional to be fully versed
on tax law, the more informed you are, the better you will be
able to assist in the return preparation process, provide
important information, and keep unnecessary questions to a
minimum. Visit the IRS website (www.irs.gov) and the website for
your state department of taxation/revenue – you will most likely
be surprised how taxpayer friendly these sites can be.
•Compile your questions into an organized list. Try to avoid
asking questions haphazardly/at random during your tax
appointment or making multiple phone calls to your preparer in
the same manner. This is not an efficient use of your time or
your preparer’s.
•Be on time for your appointment. While we are all busy, there
is probably no one as pressed for time as a tax preparer during
tax season. If you are late, this could take away from the time
the preparer can spend with you. It is important to keep in mind
that your preparer may have appointments with other clients
before and after your appointment. Accordingly, keep in mind
that it is possible for your appointment or the one before yours
to run a few minutes over the scheduled/allotted time, so be
patient.
•Avoid distractions during your tax appointment. Chit chatting
with your preparer, cell phones and pagers, and bringing
children with you to your tax appointment can create unnecessary
distractions for your preparer which could result in
unintentional errors on your tax returns. Your preparer needs to
be able to fully concentrate on the task at hand.
•Do not delay getting information to your preparer. If after
your tax appointment you need to get back with your preparer
with additional information, do so immediately so your return is
still fresh in your preparer’s mind and to avoid the last minute
April 15th rush. Remember, your preparer has many other clients
to deal with. Thus, he/she cannot be expected to call to remind
you that he/she is still waiting on information from you. You
should take responsibility for getting additional information
needed to your preparer and for following up in regards to your
returns in process.
As for some specific items that you will not want to forget to
bring to your appointment:
•Make sure you have all documents related to income. Examples
include wage statements (Forms W-2s); pension and retirement
income (Forms 1099-R); interest and dividend income (bank
statements and reports, Forms 1099-INT, Forms 1099-DIV);
self-employed business income; lottery or gambling winnings;
Social Security; unemployment compensation; rental income;
commissions; and tips.
•Provide documentation of expenses and losses. Examples include
self-employed business expenses; lottery or gambling losses;
expenses from rentals; medical and dental expenses; unreimbursed
employment-related expenses; job-related educational expenses;
job search expenses; moving expenses; and child care expenses
(to include care provider’s full name, address, and tax ID or
Social Security number).
•Provide documentation related to your home. Typically, home
ownership provides many great tax benefits. If you buy or sell a
home during the year, make sure you bring complete documentation
regarding the sale or purchase of a home. Additionally, bring
information/statements related to real estate and personal
property taxes and mortgage and/or home equity loan interest
paid.
•Documentation related to miscellaneous income or debt. Other
items to bring documentation on, if applicable, include, but are
not limited to: sales of stocks and bonds; state and local tax
refunds; alimony paid or received; estimated or foreign taxes
paid; and cash and non-cash charitable donations.
•Information on new dependents to be claimed on your tax return
or changes to dependents. If you have had a baby, gotten
married, have begun supporting a relative, etc., your preparer
will need name, Social Security number, and date of birth
information (also discussed below). A name change is another
example of such information that your preparer will need.
If you are not sure if something has tax implications, bring the
related document or information and ask!
Furthermore, if you are a new client to your preparer, you will
need the following items/information as well:
•Your prior year tax returns to include relevant supporting
items such as Forms W-2s. Not only your Federal return, but also
your state and any local returns. There are items on your prior
year returns that may carry forward to your current tax returns.
Additionally, the returns allow the preparer to better
understand your tax situation.
•Full names, Social Security numbers, and dates of birth for all
persons that will be included on your tax returns. It is very
important that names and Social Security numbers given to your
preparer exactly match up with what is on the individual’s
Social Security card. Bringing actual Social Security cards to
your appointment helps to ensure this. Additionally, dates of
birth must be accurate. When such information is not accurate,
this can cause your return to be rejected for processing or
otherwise cause a delay in processing of your returns.
In addition to the above listed items, your preparer may have
some additional required items, such as a valid state issued
identification card or driver’s license for each taxpayer.
Remember, even though the preparer bears some responsibility,
you are ultimately responsible for your tax return. So finding a
great preparer and being prepared and organized will help ensure
that you recognize the greatest tax savings possible and that
your tax appointment goes smoothly!