FPA Group I help FP&A professionals get their career on the fast track with leveraged learning.
I help FP&A professionals get their career on the fast track with leveraged learning.

Six errors taxpayers fear and how to overcome them.

According to Bank Rate Monitor six common errors taxpayers worry about are :

  1. Afraid I can’t do my taxes myself
  2. Afraid I’ll overlook a tax break
  3. Afraid I’ll make a mistake that will cost me money
  4. Afraid that my tax adviser is incompetent or a crook
  5. Afraid I’ll get audited
  6. Afraid to file because I can’t pay

Interestingly, two of these fears seem at odds with each other.  People are afraid they can’t do their taxes themselves, but at the same time they fear potential incompetence in choosing someone to prepare their tax returns for them.  So, what is a person to do?
Going to one of the large tax preparation chain locations may not be your best bet. 

“A few years ago, a Government Accountability Office (GAO) look into commercial tax prep chains in major metropolitan areas produced the alarming finding that all the returns completed in those offices were wrong to some degree.” according to the BankRate.com article and GAO documents.  Alarmingly the article also points out that, “the IRS regularly shuts down tax preparation offices across the United States when it finds the operators have allegedly filed bogus returns for clients. And yes, even big name, high-dollar help sometimes produces unexpected tax costs for clients.”  So, what’s the solution?

Well, the IRS is working on some new regulations for paid tax preparers to try to address the problem.  Starting next year anyone who wants to charge others for preparing their tax returns will have to meet certain standards. 

So what can you do to make sure you’re getting a competent tax preparer.  It’s the same simple advice I’ve given clients, family and friends for years.  Find a good, local CPA that you like and trust who handles a good number of tax returns every year.  CPAs will be exempt from the new regulations on paid preparers because they have always been regulated and they have always had to adhere to a much higher standard than even the new regulations will impose.  Get referrals from people you trust to a few good CPAs, interview a couple of them and go with the one you are most comfortable with.

If you were going to build a house you wouldn’t just go with the cheapest contractor without regard for their qualifications, whether or not their properly licensed, insured, etc.  Yet, this is what people have done for years to save a few bucks.  Don’t make that mistake.  Find a professional, get sound advice and sleep better knowing you’ve made a wise decision that will pay more than a few bucks.  It will pay off in more piece of mind.