Make sure that any tax position taken is legal and well-researched beforehand. This example serves to caution you to review your return and not to take excessive deductions, especially with increased enforcement by the IRS and state tax authorities. In my opinion, most tax preparers are honest as well, and only a few pride themselves on obtaining large refunds in illegal ways.
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This is not to say that all CPAs are honest, because some have lost their license and even went to jail. In this case, the question was obvious: how do you make a $25,000 charitable donation, when your net income is approximately $30,000?ĭo you review your tax return before you sign it to make sure that such a thing will not happen to you? Some tax preparers might be willing to let their clients take such a risk in order to get a higher refund most CPAs however, will not risk losing their license for you. When I asked him about it, he claimed he was not aware that the tax preparer had deducted such a high amount last year and confirmed that he had not made any charitable donations in the previous year. When reviewing the prior year’s taxes of a potential client that I met with last year, I noticed that his gross income was $40,000 and took a charitable deduction for $25,000. The lack of licensing also gives tax preparers a window to take aggressive (and sometimes illegal) tax positions without disciplinary action by regulatory agencies. Additionally, a tax preparer’s lack of licensing will limit their ability in discussing your particular tax situation upon a notice or examination by the Internal Revenue Service (IRS) or state tax authorities.
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Taking these courses not only provides professional expertise, but also enhances a professional’s knowledge of new laws and tax planning strategies. That means that tax preparers are not required to take Continuing Education Courses (CPEs), which are a requirement for all CPA professionals. The tax preparer category generally includes non-licensed professionals who are subject to minimal regulation, if any at all. We will describe the main differences between the two categories to give you a better idea about what will be the best fit for your tax situation. However, if your tax needs require added value knowledge and service, then you should work with a CPA or CPA firm such as Gamburg CPA PC. If your tax situation is simple enough that you just need your income and deductions organized on a tax return, then you can get by using a tax preparer and generally paying a lower fee. If you decide to use a tax professional, you will generally find two main categories of tax service providers: the licensed tax professional-a Certified Public Accountant (CPA), or the unlicensed tax professional-a tax preparer.