It is common for people who think they are getting refunds to file taxes from mid-February to mid-March. Taxpayers who know they are going to owe taxes often wait until the last minute, filing as close to April 15th as possible. However, taxpayers with complex investments, such as being a shareholder in an S Corporation, member of an LLC, or invest in limited partnerships usually have to go on extension because they are waiting on their K-1 documents.
No matter when taxpayers files, their preparers can make mistakes.
The most common mistake that tax preparers make are the transposition of number errors. This can apply to the taxpayer’s social security numbers or even tax documents. A major issue that tax preparers make is not asking the client for additional information. For example, the client could have made energy efficient improvements to their primary residence and they don’t realize that they may be able to take advantage of the energy efficiency credit. If the preparer doesn’t ask the right questions, then the taxpayer may miss out on the credit. Things can change for a taxpayer from year to year. It is imperative that the tax preparer asks the right questions so the taxpayer does not miss out on a deduction or credit that they are entitled to claim.
Even if a taxpayer uses a paid tax professional to prepare their taxes, the liability for any errors or omissions still lies with the taxpayer.
Therefore, when reviewing a return that was prepared by a tax professional, take the time and look it over and review the numbers. Check to make sure that all of your wages were reported and the amount you had withheld for taxes is reported correctly. If you see a number on a tax return that doesn’t make sense, ask questions.
Taxpayers should also pay careful attention to the person that they choose to prepare their taxes. Make sure that the preparer is reputable and that you can rely on them to make any errors right. The most reputable tax preparers pay any interest and/or penalties that the IRS might assess a taxpayer due to errors on their part. Like most things in life, you get what you pay for. It may be worth paying more for your tax preparation in order to have peace of mind that things have been done correctly.
When you get your taxes back from your tax professional, check that the social security numbers are correct for yourself, your spouse, and your dependents. You should also ask about estimated tax vouchers for the current year, if you owed a lot of money in the prior year.
If you are self-employed and work from home, check and see if a home office deduction was taken, if you are entitled to it.
Many tax professionals, for whatever reason, don’t like to claim the home office deduction because it raises “red flags” with the IRS. In closing, a taxpayer should not be afraid to ask questions of their paid preparer concerning items on their return.
If you have any questions, please contact our professional tax preparers at (855) 479-2400.