Tax season is busy and stressful for everyone, from freelancers to big business owners. Finding a qualified tax preparer can make the process go smoothly. It is unfortunate that even the most experienced ones can also make mistakes.
When you hire tax preparers, you trust them to do the job correctly. Unfortunately, tax preparers are humans at the end of the day and can make mistakes. However, when one makes mistakes that cost you money, they are not qualified or experienced enough for the job. It is important to know what these mistakes are so that you can hold your hired services accountable.
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Costly mistakes bad tax preparers make
- Not staying updated about tax law changes.
One of the biggest mistakes your tax preparer can make is not being updated with the latest changes. These laws change frequently and, depending on outdated information, can lead to hefty fines. Another mistake is not double-checking the work. If there is an error, checking twice can give you peace of mind.
- Putting incorrect direct deposit details.
You have the convenience to get your tax refund directly sent to your bank account. This is faster and more secure than receiving a paper check. However, if your tax preparer puts an incorrect account number or makes an error in writing the details, you could lose the money. There are two possible scenarios here: the money could be sent to someone else’s account or the IRS.
- Not filing on time.
Tax deadlines can be difficult to follow and keep up with, but they must be obeyed. Tax preparers sometimes forget the last date to file or assume that they have a lot of time. Filing late results in penalties. If you are aware of the deadline but need some more time to gather your documents, you can file for an extension. That way, you will buy yourself more time without the fear of getting penalized.
- Discussing foreign bank accounts.
One of the worst mistakes tax preparers can make is not asking their clients about their foreign bank accounts. Citizens are required to disclose their foreign bank accounts if their assets exceed the value of $10,000. If a taxpayer fails to report their foreign bank accounts, they could face up to $10,000 in fines per violation.
- Not utilizing tax credits and deductions.
Tax credits and deductions reduce the amount of taxes you owe. There may be several you are eligible for, depending on your work status and profession. Everyone’s tax situation is unique. But, a good tax preparer is well-equipped with the knowledge required to save a few hundred dollars.
