About 'accounting firm los angeles'|Auditing firm that missed Bell scandals hires accounting group
When it comes time to prepare your tax return you have a few different options. You can prepare the return yourself, either manually, using a tax software package, or using the tax software providers authorized by the Internal Revenue Service (IRS) for filing electronically. You could ask a friend or relative who has some experience in tax preparation to prepare your return for you. You may qualify to have your return prepared by a volunteer organization. Or you can have a paid preparer do your tax return. What you do depends on your own personal preference, how complicated your return is, how qualified you feel you are to prepare your own return, who has done your tax return in the past, and whether you have any significant changes this year. If you have done your own return in the past and you feel comfortable that you can find the information you need to do your return again this year, you should have no problems. Also, the tax software providers authorized by the IRS for its e-file program on its website at www.irs.gov offer software that will generally guide you through the process, asking you the necessary questions in order to correctly prepare your return online. But if you prefer to use a paid preparer, you also have several options that you should carefully evaluate. Types of Paid Preparers There are a number of different types of paid preparers, with different levels of qualifications and capabilities, offering different types of services. Their prices can also vary considerably. Certain individuals have the qualifications necessary to represent taxpayers before the IRS, but many paid tax preparers do not. The IRS does not certify tax preparers, and any person can be a paid tax preparer, although some states such as California have established education and experience requirements for tax preparers. There is federal regulation of tax preparers when it is determined that they prepared and signed a return that they know was wrong, or should have known was wrong, with penalties applied in that case. Large National Chains The large national chains include H&R Block, Jackson Hewitt, Liberty Tax Service and others. These large firms will generally have staff with different levels of qualifications. They generally have a training program for their tax preparers, and will have CPA's (Certified Public Accountants) and attorneys on staff who can represent you before the IRS should the need arise. Accounting Firms Accounting firms can range from a small local firm operated by a CPA or person with experience in tax preparation, up to the large international accounting firms, which specialize in more complex tax matters. Areas of expertise and fees can vary substantially, with the large international firms generally being able to handle any type of tax matter, but charging more. CPA's Certified Public Accountants are licensed by each individual state to provide accounting, auditing, and tax services to the general public. They must pass the uniform CPA exam and have experience in public accounting in order to be certified. They must also meet continuing professional education requirements in order to retain their license. CPA's are authorized to represent you before the IRS. Some CPA's specialize in taxes and others do not. CPA's may work in an accounting firm or may have their own individual practice. Attorneys Some attorneys specialize in tax law, and their practice may be concentrated in a specific area of tax law. They may prepare your tax return or may hire someone else to prepare your return, but their specialty is generally to represent taxpayers before the IRS or in tax court. Certified Financial Planners Certified Financial Planners generally provide advice and counseling on personal finances, investments, planning for retirement, and estate planning and they may also provide tax services. Enrolled Agents Enrolled agents must pass a tax exam given by the IRS and are authorized to represent you before the IRS and in tax court. They may be former IRS agents who are qualified as enrolled agents based on their past service and technical experience. What to Look for in a Tax Preparer If you have been using the same tax preparer for many years, are satisfied with the service the tax preparer has provided in the past, you have never received a notice from the IRS or been audited, and your return is basically the same year after year, you are probably fine to continue with the same preparer. That person knows your situation, keeps up-to-date on changes in the tax code, and will be able to handle your needs. If for whatever reason you are not satisfied with the service you received last year, you move to a new area, or your tax situation has changed considerably, you may need to look for a new preparer. How you select the preparer will depend on your particular needs, taking cost into consideration. Your Needs The more complicated your tax situation, the more expertise you need to look for. If in addition to having your tax return prepared, you are also looking for tax advice, or tax planning, you will need to find a person qualified to provide that service. You may have to file state and local tax returns as well as a federal tax return, and the person you choose should be knowledgeable in preparing all applicable returns. If you have been audited in the past, or had some problem that needed to be resolved with the IRS, you may want to choose a preparer who is authorized to represent you before the IRS, should that be necessary. This will be a CPA, attorney, or enrolled IRS agent. If you have all your financial information in good order, you may just need a preparer who knows how to put that information into your return. On the contrary, if you have a business, for example, and need someone to go through your records and do the preliminary accounting work necessary to be able to prepare your return, you may want to use a CPA or qualified accountant. Cost Most tax preparers will charge on an hourly basis or according to the forms you need to file. The more schedules your tax return involves, the higher the cost will be. Cost is also associated with the level of expertise. A more experienced tax preparer, with a higher level of qualifications, will generally charge more. If your return is fairly simple, you probably don't need a higher priced CPA or tax attorney to do your return. But on the contrary, if your return is complex, you want to make sure the preparer is knowledgeable and qualified. You should be prepared to pay for the service you require, but should not pay for more than what you need. Questions to Ask Your primary concern should be to find a tax preparer who knows taxes, is up-to-date on the latest changes in tax laws, and who is knowledgeable and experienced in your particular needs. You should ask about the preparer's overall experience, and about experience in the area that concerns you, whether it involves itemized deductions, capital gains, income and expenses from rental properties, income from self-employment or a small business, or any other area. If you are subject to filing a state or local income tax return, you should ask whether the preparer is knowledgeable about those filing requirements and has experience in filing state and local returns. You may have worked in more than one state during the year, or have taxable income from more than one state, and the tax preparer you choose should be able to prepare all the state and local tax returns you need to file. You could ask who will actually be preparing your return, and what qualifications that person has. You might ask about the tax firm's training program and how they keep up to date on the latest changes and modifications of the tax laws. You could ask how your return will be reviewed, and who will review it. If you feel you may need representation, you should ask whether the tax preparer or someone in the firm is authorized to represent you before the IRS, and what experience they have in representing taxpayers. If you are looking for tax advice or tax planning, in addition to the preparation of your tax return, ask whether the tax firm offers this service and inquire about their experience. Conditions to Set Be sure to ask the tax preparer to call you if there are any questions or if additional information is needed. The tax preparer should not make any assumptions or conclusions without consulting you. If there are any elections to be made regarding accounting methods or tax treatments, your tax preparer should explain your options and the consequences, for the year for which the return is being filed as well as in future years. Be clear about how your return is to be filed, whether electronically or manually. If your return is filed electronically, you should control the PIN number used to electronically sign your return. Establish the date on which your return will be completed and ready to be filed. Ask the preparer to notify you if any delays are foreseen. The closer you get to the tax filing deadline, tax preparers may be very busy. If it becomes necessary to file a request for an extension of time to file, be sure you know with sufficient advance notice. Be sure to have a contact you can call after your return has been filed. If you receive a notice from the IRS, you may need to ask questions about how your return was prepared and how certain figures on your return were calculated. In the event of an IRS audit, you may also want someone from the tax firm to represent you. What to Watch Out For You should select a tax preparer based on the above-mentioned criteria, taking into account your particular needs, but there are certain things you should generally watch out for. Guaranteed Refund You should be wary of a tax return preparer who guarantees you a refund before looking at your information. To properly prepare your return the preparer will need to see your W-2 forms, 1099 and 1098 forms, and all other documentation of your income and expenses. The preparer should also ask you a series of questions to ensure that he or she has all the information necessary, and has taken into consideration all the facts that affect your tax return. If this is the first year the preparer does your return, you will probably be asked for a copy of last year's return. But the preparer should not rely solely on what you reported last year, and should ask you the necessary questions to determine what has changed in your tax situation for this year. Obtaining a Larger Refund than You Could with Other Preparers The tax laws are the same for everyone, and all preparers should prepare your return based on the same laws and the same information you provide. You should question a preparer who claims to be able to obtain a bigger refund than other preparers can. Nevertheless, it may be true that some preparers are more thorough in asking the necessary questions and requesting the right supporting documentation in order to obtain all possible deductions and credits. A preparer who is not as thorough, or who is not as knowledgeable or up-to-date on the latest changes in tax laws may overlook certain deductions or credits for which you qualify. Contingent Fees The fee the preparer charges should be a standard fee based on the forms and schedules you need to file, and perhaps an hourly fee if additional accounting work is needed to assemble the information. You should be wary of a preparer who charges a fee based on the amount of the refund you will obtain, or who agrees to share in any additional refund. This can lead to questionable practices and aggressive interpretations of the tax law or tax treatments that could cause you problems. Not Requesting Documentation or Asking Questions Your tax return must be prepared based on factual information and documentation. A tax return preparer should request all your W-2's, 1099 and 1098 forms, receipts and documentation of your tax-deductible expenses, and should ask you questions. The preparer asks these questions with your best interests in mind, in order to claim all the deductions and credits for which you qualify, and to report all your income in order to avoid any subsequent penalties, interest, additional taxes, or other problems with the IRS. Be wary of a preparer who offers to do your return without this documentation, or without asking you questions. And never sign a blank tax return form. Making Up Supporting Documents or Aggressive Tax Approaches The tax preparer should not offer to make up documents to support your tax return. Your return must be prepared based on objective, third-party statements and verifiable data. You should be wary of a preparer who claims to take an aggressive approach in order to get you a bigger refund or reduce the amount of tax you owe. An aggressive approach could lead to an IRS review or audit, and if fraudulent practices are encountered, the penalties are severe. Not Signing Your Return A paid preparer must sign your return. You should not use any preparer who is not willing to sign your return and indicate his or her social security number, or employer identification number on the return. The preparer should also give you a copy of the return and should return all the original documentation you provided of your income and expenses. You should clarify this before agreeing to have your return prepared. In Case of Doubt If you have any doubts about a tax preparer, you could check with the Better Business Bureau to see if the preparer has any questionable history. In the case of a CPA, you can check the person's status with the state board of public accountancy. For an attorney you could check with the state bar association. And in the case of enrolled agents, you could check with the IRS Office of Professional Responsibility. Responsibility Taxpayers themselves are ultimately responsible for the information reported on their tax returns, regardless of who prepared the return. The tax return preparer can only prepare the return based on the information you provide, and it is up to you to be sure you provide all necessary information. If you are in doubt as to whether some information has an effect on your return, it is better to let the preparer know in order to make that determination. |
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