Tax season is upon us. Starting January 27th – April 15th, the IRS will begin accepting tax returns. Returns submitted after the end of tax season are subject to late penalty fees and interest charges. It will be an extremely busy season for tax professionals and tax advocates- and choosing the right ones are crucial. Here are a few tips to keep in mind when looking for the right service or an IRS tax professional to score the best credits and deductions on returns.
For taxpayers, it is best to prepare everything early in order to get a smoother return. Starting the filing process ahead of time will give hired tax consultants a more flexible schedule to work more accurately on accounts. It will also help to prevent identity thieves from seeking a window of opportunity, as tax return preparer fraud is rather common. To prevent unethical “ghost preparers”, the IRS also has a Directory of Federal Tax Return Preparers. The first step to preparing a return would be to review all of last year’s tax return documents. This includes W2s, 1099-Ks, and Form 1099-MISC. The IRS also recommends using the Tax Withholding calculator to check whether the right amount of tax is withheld from the paycheck, pension, and other forms of income. From there, the taxpayer advocate can help compile this information to create the return.
In case hiring a tax professional is cost-prohibitive, there is also free IRS assistance. It is important to note is that this year, the IRS partnered with more private-sector tax preparation programs to increase access to the Free File program to assist low and moderate-income individuals at no cost. Taxpayers with adjusted gross incomes of $69,000 and under can use free commercial software by going to IRS.gov/freefile. If income exceeds $69,000 – the Free File Fillable Forms are still accessible along with the basic calculation functions and submission – the only thing not accessible for free is the brand name software assistance. Private companies in this partnership can be searched on the Free File page on the IRS website and once selected, preparers will be directed to the partner site. Before settling on a company, it is also helpful to check to see whether they will prepare a free state return.