Feature Articles: Taxes
Preparing Taxes: Using VITA Sites and Paid Preparers
Reviewed and adapted with special permission from the IRS by: Brenda Procter, M.S., State Specialist & Instructor Personal Financial Planning, University of Missouri Extension
A great way to save money at tax time is to have your
taxes prepared for FREE.
Volunteer Income Tax Assistance (VITA) sites provide
free tax preparation. Some VITA sites can electronically
file or E-file your tax return. Your refund can be
deposited directly into your bank account within 7-10
days. If you don't have a bank account, open one up to
take advantage of direct deposit. For the nearest VITA
sites, call the IRS at 1-800-TAX-1040 or Answers,
Please! at 202-463-6211.
If you do not have a bank account, the IRS will mail you a check in
just a few weeks. Check cashers may charge an extra fee
to cash your tax refund check. Save your money by
depositing the refund into your bank account!
How much can you expect to pay a commercial tax
preparer?
On average, a person will spend $100 to get a tax return prepared. In
addition, paid preparers often advertise "Fast Cash
Refunds" or "Instant Refunds." Don't be fooled! Many of
the quick refunds are LOANS,
refund anticipation loans (RALs). When you get an
RAL, you're borrowing against your refund, not getting
your refund ealier. RALs are expensive and can cost up
to $100. Ask for a list of fees up front.
How should you choose and work with a paid preparer?
These guidelines will help you choose and work with a paid preparer.
Make sure to bring this checklist with you when having
your taxes prepared.
- Choose a preparer who has a permanent office and will be around if there is a problem with your tax return. Ask friends and neighbors who they use and trust. Also, the preparer should be properly trained. Ask how recently the preparer took classes.
- Check with the Better Business Bureau or your state's board of accountancy for CPAs, bar association for attorneys or Attorney General's office to be sure your preparer does not have a questionable history.
- Ask about the fees up front, before the tax return is prepared. Ask if there are any costs for additional schedules (like EITC) or forms. Ask about fees for refund loans.
- If possible, pay preparation and filing fees by cash or check instead of asking the preparer to take the fees out of your refund.
- Avoid anyone who suggests you lie or fudge figures. You will be responsible for errors.
- Do not sign a tax return that is blank or completed in pencil. Sign the return only after you have reviewed it with your preparer to be sure there are no mistakes. Before signing, check your name, address and Social Security Number to be sure they are accurate.
- Make sure the preparer signs your completed return and includes an address and Employer Identification Number (EIN) or Social Security Number. This is required by law!
- Even if you have given the IRS authority in a power of attorney to mail your return to a preparer or other representative, you are the only one who can sign and cash your refund check.
- Make copies of all the documents you give the preparer and get a copy of your completed return and keep it.
Avoid preparers who:
- claim they can obtain larger refunds than other preparers.
- base their fee on a percentage of the amount of the refund.
- won't provide references from other clients who have used them in the past.
- won't provide a copy of all prepared forms for the client.
Using a preparer who is certified and affiliated
with a professional organization may also be
helpful.
Report suspected tax fraud and abusive return preparers to the
nearest IRS office, either by telephone at
toll-free 1-800-829-0433 or in writing to the
local IRS office. You can find the local IRS
offices on the IRS
Website.
Links:
- Powers of Attorney
- Form 1040 (PDF)
- Better Business Bureau
- The American Institute of Certified Public Accounts - links to every state board of accountancy
- American Bar Association - links to every state bar association
- Tax Schemes
- Local IRS Offices
Sources:
Information provided by Idara Nickelson,
Policy Analyst, DC Fiscal Policy Institute,
Center on Budget & Policy Priorities,
www.dcfi.org
http://www.dcfi.org
Adapted from IRS Tax Tip 2005-07.
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Last update: Tuesday, May 05, 2009
