This year, as my accountant prepared my taxes, I noticed that I owed $6,000. I thought this odd, since my husband forgot to claim exemptions on his W-4, so quite a lot of tax was withheld this year.
I mentioned that I thought something was off, and we looked again. Turns out my accountant hadn’t entered my quarterly tax payments into the software. The software being used by the accounting firm was new, and he wasn’t completely used to it yet. In reality, I was due a $2,000 refund (although I’m just having it automatically applied to the first quarterly tax payment of the year).
Between my personal experience with a preparation error, and the news that H&R Block’s major error on one of the forms is delaying 600,000 refunds, I was reminded that it’s important to pay attention. Even if you have help filling out your tax forms, you should have a general idea of what to expect. If something doesn’t seem right, bring it up.
You are Responsible for Your Tax Return
Another good reason to review your tax return before filing is to make sure that everything is accurate. Even if someone else prepares your return, you are still responsible for what’s in it. If your accountant fudges the numbers a bit, it’s you the IRS investigates.
While your tax preparer can represent you to the IRS during an audit, you are still the responsible party. If someone still owes the government money, you’re the one who will have to pay up.
Before your tax preparer files, ask to look over the paperwork. Check to make sure that things appear in order. If you don’t understand something, ask questions. Make sure that what’s being done is properly explained to you.
Watch Out for Shady Accountants
The IRS has a list of accountants flagged for regular mistakes or “creative” methods of filling out tax forms. While no one is perfect, there are some accountants that make generous promises of refunds using methods that are suspect. Two indications that your tax preparer might not be above-board include :
- Encourages you to inflate your deductions: If your accountant is encouraging you to fudge on the numbers, and boost your deductions, even if you don’t have proper documentation, that could be a problem. The IRS has a pretty good idea of the amount of deductions you should have at your income level, and your return could be flagged otherwise.
- Talks about reparations and special grants: You really need to watch out if a tax preparer tries to tell you that you can access special grants or reparations through your tax return. These items are not claimed on your tax return, and if someone tries to get you to file a tax return based on these items, you are being scammed outright.
While it makes sense to pay only what you have to, you don’t want to cross the line into outright tax evasion. Check your tax return, and be aware at least generally, of what you can expect.