When you started your business, taxes were probably one of the last things you had on your mind. As a business owner, you’ve got a lot on your plate. From creating a business plan to buying office supplies, your to-do list is constantly growing.
When it comes time to do taxes you could be filling overwhelmed and confused. Many business owners look for help from professionals, like CPAs, when it’s time to file their business tax return. If you use a paid tax preparer to file your federal income tax return this year, the IRS urges you to choose that preparer carefully. Even if someone else prepares your return, you are legally responsible for what is on it.
Here are eight tips to keep in mind when choosing a CPA:
Make sure the preparer signs and includes their PTIN. A paid preparer must sign the return and include their PTIN as required by law. The preparer must also give you a copy of the return.
Check on the CPA’s background. A certified public accountants (CPA) is certified by the state to act as a public accountant. Check for any disciplinary actions and for the status of their licenses. For certified public accountants, check with the state boards of accountancy. For attorneys, check with the state bar associations. For enrolled agents, check with the IRS Office of Enrollment. You can also check the Better Business Bureau to see if the CPA has a questionable history.
Ask about service fees. Avoid CPAs who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers can. Also, always make sure any refund due is sent to you or deposited into an account in your name. Taxpayers should not deposit their refund into a preparer’s bank account.
Ask to e-file your return. Make sure your preparer offers IRS e-file. Any paid preparer who prepares and files more than 10 returns for clients must file the returns electronically, unless the client opts to file a paper return. IRS has safely and securely processed more than one billion individual tax returns since the debut of electronic filing in 1990. It’s the fastest way to get your refund and tends to result in fewer errors.
Make sure the preparer is accessible. Make sure you will be able to contact the tax preparer or CPA after you file your return, even after the return due date. This may be helpful in the event questions arise about your tax return.
Provide records and receipts. Reputable preparers and CPAs will request to see your records and receipts. They will ask questions to determine your total income and your qualifications for deductions, credits and other items. Do not use a preparer who is willing to e-file your return by using your last pay stub before you receive your Form W-2. This is against IRS e-file rules.
Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.
Review the entire return before signing. Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
Choosing a good tax preparer does require a little bit of research and effort on your part but it’s worth it. If you follow these guidelines, you should have no trouble finding a great CPA. If you ever suspect your CPA or tax preparer is ever responsible for tax fraud, you can report them to the IRS on Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or altered a return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit.
Want to learn more about finding a CPA for your business? Want to learn tax strategies that every entrepreneur should know? Join NCH’s FREE webinar hosted by Founder and President of Nevada Corporate Headquarters, Cort Christie.
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What: FREE Webinar on Tax Strategies that Every Entrepreneur Should Know
When: February 25, 2016
Time: 1 p.m. PST
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