'Tis the time to start thinking about tax prep, and many of us use January to round up paperwork and get organized. Many people also start looking for someone to do their taxes for them.
It's important to know whether your tax preparer is legit. Here are red flags from Money magazine and others for spotting bad or fraudulent tax preparers:
* They don't have a PTIN, or preparer tax identification number. The IRS keeps a directory of federal tax return preparers, so you can check the IRS website to verify your preparer can legally do your taxes.
* Promises of large tax refunds. Be aware of anyone who makes such claims before seeing your financial documents.
* They ask you to sign a blank document. You should always review your paperwork before it is sent to the IRS.
* They suggest you deposit your refund into an account that isn't yours. Your refund should go to your account.
* Their fee is based on a percentage of your return. While this doesn't necessarily make a tax preparer shady, understand that this may create a situation in which the preparer is tempted to take credits or deductions you're not entitled to.
* They mark your return as self-prepared.
* They ask for payment in cash.
Allyson Good curates senior living, health, and family content. She is formerly the Managing Editor of Active Life, a print newspaper published in 2016-2017 for seniors, choosing practical articles on health, money, safety, and everyday living for older readers. She is also an avid gardener and offers up Garden Hints and Tips on a regular basis.
