Since Donald Trump took office just over a year ago, there have been few major legislation that have passed. One that did squeak through was the GOP tax reform, and with mixed reporting on who the tax cuts will benefit, when, and how long for, individuals and businesses may feel swamped by the conflicting information they have been reading and hearing about in the last few months. With dire consequences for incorrect filings, the biggest shake-up to taxes in thirty years has left many feeling anxious about what these changes mean for them.
The Tax Cuts and Jobs Act 2017 promised lower taxes for the middle class, and reduced rates on pass-through business taxation and corporation tax while also aiming to make the process of tax filing easier for everyone. However, for business owners, the Tax Act and Jobs Act did little to simplify tax planning and preparation; in fact, the new guidelines for pass-through entities appear to have added increased complexity for taxpayers!
As the bill was passed at the end of December 2017, it won’t be until 2019 that the full impact will be felt. Though it may seem like a long way off, brushing up on how the tax reform will affect you and your business is likely to be time-consuming, so if you don’t feel confident preparing your taxes, it’s time to start looking for expert help now.
Tax preparation and filing software can help to streamline the process, and providing all the steps are followed correctly, everything should go smoothly. But if you’re not comfortable relying solely on software to get it right, and with tax filing potentially getting more complicated, finding a good tax preparer now could save you a lot of stress further down the line.
Talk the Talk, Walk the Walk
If you are not familiar with tax terminology, and if you don’t have an in-depth understanding of how different types of tax impact you and your business, it’s important to find a tax preparer who speaks your language and makes things easy to understand. Working with a preparer who bombards you with technical jargon isn’t going to make things any easier for you!
When choosing a tax preparer, be mindful that appearances aren’t everything – just because they look the real deal, doesn’t necessarily guarantee that they will deliver a good service. A Preparer Tax Identification Number (PTIN) is a must, but sadly, it doesn’t automatically make them credible. Double check their status on the IRS directory to make sure that they have the right qualifications before you consider hiring them.
As well as holding the correct licenses and qualification, a tax preparer should be able to prove that they have Errors & Omissions insurance as this will protect you in case they accidentally overlook something and make a mistake. If they don’t have insurance, you may find yourself liable for paying fines to the IRS out of your own pocket for their oversight.
Finally, it doesn’t hurt to check online for reviews and social media comments – this can help to uncover whether someone is as honest and competent as they claim to be.
The Cost of Getting it Wrong
As part of the reform, expenses related to preparing and filing your taxes, such as tax preparers or tax-preparation software, will no longer be deductible. Despite this, don’t be tempted to go for a budget option – saving a few dollars could result in you shelling out more in the long run if it turns out that your tax preparer is not up to scratch.
Another thing to be mindful of is tax preparers who base their fees on the size of your refund, as well those that claim that they can get you a bigger refund. Reputable tax preparers simply won’t do this, and will most likely charge a fixed hourly rate.
Timing is Everything
In the run-up to tax deadlines W2s in January, business taxes in March, personal taxes in April, and employee benefits in July, it’s likely that tax preparers will be busy. And if they aren’t, you might want to ask why. It could be that they are super-efficient and organized, or it could be that no matter how busy they are, they won’t turn down a chance to earn some more cash. When the pressure is on, it’s a lot easier to make mistakes, as well as not being available to respond to any queries that you may have, both during and after filing season.
It really is important to find a great tax preparer. As the taxpayer is responsible for filing, you could be left in a lot of trouble if it comes to light that they don’t have the correct licenses, qualifications, or insurance in place to perform their job. Invest time in finding a legitimate, reliable tax preparer that you have a good rapport with, as employing the wrong person could cause irreparable damage to your business.