The Effects of a Certified Tax Preparer verses a Non-Certified Tax Preparer For: Mrs. Owens, ENG 1105 Instructor From: Angela Miller, Student
Introduction <ul><li>In this research paper you will know the difference of a Certified Tax Preparer and a Non-Certified Tax Preparer . In order to be a Certified Tax Preparer you must first hold a license to prepare individual’s tax return and must work in a company that has consultants and accountants. Of course, a Non-Certified Tax Preparer doesn’t have to hold a license. They are usually on their own. </li></ul>
Project Summary <ul><li>There have been misunderstandings about Certified Tax Preparers and Non-Certified Tax Preparers. Little that you may know, you can benefit from using a Certified Tax Preparer in areas such as audits, itemizing, and credits on you return. My goal is to inform you or provide valuable information to you regarding the advantages of a Certified Tax Preparer. I also would for your return to be filed quickly, effectively, and honestly so you can get all benefits you are entitled to and avoid any further consequences. </li></ul>
ADVANTAGE 1-AUDIT <ul><li>First, one of the advantages is during an audit by the IRS. If you are audited by the IRS typically, a Certified Tax Preparer will act on your behalf and gather up all the necessary documents that’s required or requested and then submit that information to IRS (IRS.gov). If you aren’t a Certified Tax Preparer and but you file your own return then you will act alone without any representation and you will be held liable for any and all requests. There are companies such as H&R Block that guarantees service beyond tax preparation. They have an Audit Assistance Program which steps into play if the IRS, State, or Local Tax authority audits or serve notice to the individual. They will prepare you for the audit by answering questions regarding the preparation of your tax return. Back up your problem statement with statistics, if available. </li></ul>
<ul><li>They will provide the following (H & R Block): </li></ul><ul><li>Communicating directly with the tax authority on the client’s behalf. </li></ul><ul><li>Acting on and asserting arguments on the client’s behalf. </li></ul><ul><li>Challenging the tax authority’s position if necessary. </li></ul><ul><li>Following up regarding any outstanding issues or further documentation that has been requested. </li></ul><ul><li>Researching any issues that may come up during the audit. </li></ul><ul><li>Meeting again with the tax authority to resolve any further issues. </li></ul><ul><li>Negotiating and settling claims with the tax authority. </li></ul><ul><li>Assisting with the appeals process. </li></ul>
ADVANTAGE 2-ITEMIZE ITEMS <ul><li>Secondly, another advantage or benefit is itemizing. A Certified Tax Preparer has the skills and training when it comes to itemizing a return. They know exactly what items to consider that will best suit you. On the other hand, a Non-Certified Preparer will only know the basics and will normally enter anything whether they apply to them or not which is considered fraud. According to an article from MSN titled, “Get the most out of itemizing on taxes”, written by Jeff Schnepper (MSN). </li></ul><ul><li>There are five main sections of itemized expenses that can be deducted on tax returns which are: </li></ul><ul><li>Medical and dental expenses. </li></ul><ul><li>Taxes. These include state and local income taxes, property taxes on real estate, intangible taxes (on the value of stocks and bonds you own) and on personal property taxes on such things as cars. In 2009, as in the previous two years, you can deduct either your state income taxes or your state sales taxes but NOT BOTH. </li></ul><ul><li>Interest expenses. For most people, these are limited to home mortgage interest, points (interest that's prepaid to buy a home), and some interest on investments and education expenses. For most taxpayers, the mortgage deduction is what lets them itemize. If you take out a 30-year, $140,000 mortgage at 6%, you will generate about $8,350 in deductible interest in the first year. </li></ul><ul><li>Charitable contributions. </li></ul><ul><li>Casualty and theft losses. </li></ul><ul><li>The key, then, is to maximize the value of your itemized deductions. Here's where planning can put dollars in your pocket. </li></ul>
ADVANTAGE 3-CREDITS <ul><li>The other advantage is tax credits a Certified Preparer will get for you. There are so many credits individuals qualify for and don’t even know it. They are on top of the different laws that changes every year that individual could benefit from. If you prepare or file your own tax return you would not know the updates on laws that are required by the IRS or State which could hurt you in the long run. They could also save you a lot of time in preparing your own taxes. It may take you 2 to 3 hours preparing when it probably take them 30 minutes to 1-hour. </li></ul>
ADVANTAGE 4-REFUND OPTION <ul><li>Another advantage is the refund option. Almost all Certified Tax Preparers have this option because it is great for business. The majority of the American people who is due a refund wants their refund back as soon as possible. Some are dependent on this every year to catch up on bills, make big purchases, or increase their savings. </li></ul>
The types of refund options that H & R Block offers are (H & R Block.com): H&R Block Emerald Prepaid MasterCard ®2 — Load your refund, refund anticipation check or refund anticipation loan on the H&R Block Emerald Card so you can make purchases anywhere MasterCard ® debit cards are accepted. IRS Direct Deposit or Check- When you mail your return to the IRS, you'll generally receive your mailed refund check within 6 to 8 weeks. If you e-file your return, you should receive your refund check within 3 weeks. E-file your return and the IRS will deposit your refund in your bank account within 8 to 15 days. If you mail in your return, direct deposit generally takes 5 to 7 weeks. When you choose direct deposit, you also have the option to split your refund among 2 or 3 different financial accounts, such as a savings account or an IRA, held by up to 3 financial institutions. Refund Anticipation Check (RAC) - Pay for your tax preparation fees out of your federal RAC proceeds and pay no out-of-pocket expenses at the time of your tax preparation appointment. Plus, you can get the remaining balance of your federal RAC on an H&R Block Emerald Prepaid MasterCard ® , as a check or direct deposit in approximately 8 to 15 days. Federal RACs are available starting Jan. 16, 2009. Special note: You may bring your W-2s into an office beginning Jan. 2, 2009. H&R Block will submit your RAC application to the RAC service provider for review when the IRS begins to accept e-filed returns. Classic RAL - File your taxes at H&R Block and apply for a Classic RAL. If approved, you could receive a loan up to the amount of your anticipated tax refund, less bank and H&R Block fees. Your loan proceeds will be available within 2 days of filing your return. Plus, your H&R Block tax preparation fees are withheld from your loan proceeds, so you pay nothing out of pocket. Get a lower price on your Classic RAL when you load the loan proceeds on an H&R Block Emerald Prepaid MasterCard ® instead of receiving a loan check. Get the safety and convenience of an H&R Block Emerald Card and use it anywhere MasterCard ® debit cards are accepted. Instant Money RAL -File your taxes at H&R Block and apply for an Instant Money RAL. You could receive a loan up to $2,800 (less bank and H&R Block fees) on the spot. Get a lower price on your Instant Money RAL when you load the loan proceeds on an H&R Block Emerald Prepaid MasterCard ® instead of receiving a check. You'll enjoy the safety and convenience of a card to use anywhere MasterCard ® debit cards are accepted. Get your H&R Block Emerald Prepaid MasterCard ® or your loan check the same day your loan is approved.
All of those options are examples of what is available for someone who is certified. If someone is not certified then they may not be able or equipped to offer these services. The only way a Non-Certified Tax Preparer can receive a refund is by E-FILE with the IRS and wait until at least one full week to receive the payment. They could even wait on the mail which could take up to 4-8 weeks depending on that particular tax return.
This should help clear up the misunderstandings about being a Certified Tax Preparer verses Non-Certified Tax Preparer. You should now see how it may be beneficial to you to seek services from someone who is skilled and knowledgeable about tax laws. They should also be Certified and you should stop doing your own taxes because of the risks, loss of credits you are entitled to, trouble with IRS auditors, and not knowing what to itemize.