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BBB advice for early tax filers
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Around 75 percent of taxpayers get a tax refund each year. The Internal Revenue Service says that the average refund is around $3,000. Many look forward to that money and file their taxes early in the year to get it. This year because of tax law changes made on Jan. 2, the IRS has delayed the opening of the 2013 tax-filing season until the 30th. That is the date when tax returns will begin to be accepted by the IRS.
As in all years, those who file electronically will receive their refunds much faster. Last year more than 80 percent of taxpayers chose to file electronically.
Your Better Business Bureau has the following advice for taxpayers who are getting an early start on their taxes this year:
Accuracy is critical
The IRS sees millions of tax returns each year with mathematical errors, inaccurate information or that fail to claim all deductions. The most common mistake is inaccurate Social Security numbers. Another common error is made by married women who have undergone a name change and did not notify Social Security, causing an inconsistency with their Social Security number. New babies need Social Security numbers before you can claim the child tax credit.
Failure to sign the tax return invalidates it and causes the IRS to return it. This delays the refund process considerably. Be sure to check that each taxpayer has signed their return before sending it to the IRS.
Be sure you have used the correct tax table in your calculations. They are tiny and they are hard to read but they contain critical information. See that you are using the proper table.
Do not overlook the Earned Income Credit. It is an income-based tax break that assists low-income workers. Check your tax instruction book or check the IRS website to see if you qualify.
Don’t leave out important documents like your W-2 employer statements, 1099 statements and investment income forms. If you’re not sure what to include, contact the IRS and ask.
Choosing a tax preparer
80 percent of taxpayers use a tax preparer or tax software when filing their returns. Because you are responsible for your tax return even if someone else prepares it, it is vital that you choose your preparer carefully. These tips can aid in that effort:
· Ask others for referrals. Friends, family and colleagues can help you find a good tax preparer. Use BBB Business Reviews to check up on any business, accountant or tax professional.
· Check credentials. Are they a CPA, tax lawyer or enrolled agent? Will they sign your return, provide a Preparer Tax Identification Number, and provide you with tax form copies?
· Watch out for grand promises of big refunds. Until they know your specific situation, they cannot know if you’ll get a refund.
· Check availability. Will they be around later if questions arise about your tax return?
· Where will the refund be sent – to you or to the preparer? What are their charges and how are they calculated?
· Don’t sign a blank return. Review the return before you sign it and be sure you get a copy and that the preparer signs it as well.
Remember that there are free tax preparation options available. If you make under $50,000, some IRS offices will prepare your tax return for free. Check with your local office to see if they provide this service.
Avoid Refund Anticipation Checks (RACs). They include fees that will reduce the amount of money you get and don’t save you much time.
The IRS also sponsors Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites that offer free tax filing and help find special tax credits for those making under $51,000.
You have many options when filing your tax return but all require accuracy and attentiveness on your part. For questions or concerns, contact the BBB by calling (800) 856-2417 or visit our website at