Tax season can be stressful for many people, and hiring a tax preparer can be a good option. Being prepared and organized can help you work with your tax preparer more efficiently. Knowing where you fall on the spectrum will make it easier to find the right tax preparer.
RACs
Many states have regulated refund anticipation loans (RALs) for tax preparers to prevent predatory practices. This type of loan provides a temporary bank account from which a preparer can deduct fees for tax preparation. The practice is prevalent among low-income taxpayers, and some states have responded to this problem by regulating RALs. The basic idea behind RACs is to allow low-income taxpayers to defer income tax planning payments. For example, if taxpayers pay a tax preparer $200, they may receive a refund of $30 in the form of a refund anticipation check. However, this deferred payment comes with a high-interest rate.
Refund Anticipation Checks
Before taking out a tax refund anticipation loan, it is vital to understand the benefits and disadvantages of the product. These loans are given to a tax preparer in exchange for a tax refund deposit and are generally given in the form of a special debit card, check, or direct deposit. If you decide to get one, it is important to ensure that you provide the right information because incorrect information could mean your refund is delayed or lost. Your tax preparer will automatically repay the anticipation loan when you receive your refund. However, you should remember that refund anticipation loans are more expensive than other cash advances. Tax preparers who offer refund anticipation checks to their clients are obligated by law to make an itemized statement outlining the fees charged.
CPAs
CPAs are experts in tax preparation, and their services can help you minimize your taxes. Tax preparation Wichita is a complex process, and CPAs have the tools and experience to find the best solutions for your business. They also know the laws and regulations governing your business and can advise you on the best legal structure for your company. To work as a tax preparer, you must be able to solve complex problems. You’ll need to understand the intricacies of tax codes and identify the best solutions for each client’s situation. Since tax preparers directly deal with the public, they must be thorough and detail-oriented. Also, tax preparers must be patient since they often work with clients who are stressed during tax time.
Enrolled Agents
If you want to save money on your tax return and make sure you file correctly, consider using an enrolled agent. The IRS licenses these professionals to prepare and file federal and state tax returns. They must also maintain a certain level of continuing education to stay current with tax law changes. In addition, enrolled agents must complete a continuing education course every three years. This course should include at least two hours of ethics.
Enrolled agents are experts in tax law and represent taxpayers before the Internal Revenue Service (IRS). They are trained to help taxpayers with any federal tax issue. To keep their license, these professionals must pass a stringent test and complete 72 hours of continuing education every three years.
Annual Filing Season Program
The IRS has introduced a new voluntary program to encourage tax return preparers to complete continuing education requirements. Currently, 60 percent of preparers operate without any oversight or education requirements. Taking the time to take continuing education courses will ensure that you are up-to-date on changes in tax law. It will also help you set yourself apart from your competition. The AFSP is open to all tax preparers, including unenrolled ones. While tax credentials like CPAs, EAs, actuaries, and tax attorneys are not required to take the AFTR, they are eligible to participate in the AFSP.
