Q: Why should I file my taxes early?A: There are several good reasons to file your tax return early, but the No. 1 reason this tax season may be to lessen your chance of being a victim of fraud. Tax identity fraud has been on the rise in recent years, and there is nothing to indicate this year will be any different. Identity thieves use personal information to file fraudulent income tax returns in an attempt to steal the taxpayerís refund. They file early, hoping to beat the true taxpayer to the IRS. Filing early will help reduce the likelihood that tax fraud will happen to you. Last year, the IRS joined forces with tax preparation firms around the country to combat tax identity fraud. Still, taxpayers should do what they can to reduce the likelihood that they will become victims of identity fraud.If you file a return and the IRS notifies you that more than one return has been filed using your personal information, you should contact your tax preparer and the IRS Identity Protection Specialized Unit at 1-800-908-4490. You may also want to follow the steps you would if your wallet had been stolen, including the following:
- File a police report.
- Have a fraud alert placed on your credit file.
- Contact your bank or financial institution and discuss whether to close existing accounts.
Q: Why should I use a tax professional?
A: There are two basic options to consider when tax time arrives and you are deciding on how to get your taxes done. The first option is to do it yourself, which will require hours of research, depending on your situation, and hope that what you entered is correct. There are several software options available for people to choose from to prepare their taxes at home, but each one has limitations, primarily the knowledge and understanding of the person using the software. Keep in mind that while the price might be enticing the time you spend preparing your own taxes has value, too, and there are many advantages to using a qualified tax professional.The second option is to use a qualified tax professional. Be sure to research your preparer before deciding where to spend your money — not all tax preparers are the same. A qualified tax professional should have the experience, knowledge and training to assist you with any of your tax needs; and to answer all of your tax questions. Additionally, find a tax professional who is going to be available all year in the event you receive a notice from the IRS or state agency or just want to stop in for a question. Finally, choose a tax preparer willing to stand behind their work. Almost anyone can prepare taxes, but a qualified tax professional should be willing to guarantee the accuracy of the return and be willing to assist in the event of an audit or other IRS communication.When deciding which option is the best for you, keep in mind that each has its advantages and disadvantages. Price is often a factor for most people but should not always be the deciding factor. Peace of mind and reduced stress, knowing your taxes were handled by a professional, can be worth more than the cost of the services provided.
Jeremy Kniffen, CPA, is the owner of Liberty Tax Service in Falcon. To find the Liberty Tax office nearest you, call 866-871-1040 or visit http://LibertyTax.com.
