State of Michigan Tax Tip, February 2, 2017

 

Michigan taxpayers should choose a qualified tax preparer to ensure their individual income tax returns are completed correctly and appropriately, according to the Michigan Department of Treasury (Treasury).

 

Under state law, taxpayers are responsible for the content of their tax returns and for any additional payments, penalty, and interest that may result from a tax preparer’s error. While the state of Michigan does not require tax preparers to be licensed, many are licensed, certified and belong to professional organizations that require a minimum level of education and provide ongoing training.

 

“Unqualified tax preparers may overlook legitimate deductions and credits that could result in a taxpayer not getting the right amount of refund owed or pay more than they should,” Michigan Treasurer Nick Khouri said. “Qualified tax preparers will help our taxpayers ensure their refunds are properly filed so we can efficiently process them.”

 

Asking questions is worth the time it takes to make sure a tax preparer is hired with the skill level needed to prepare an individual’s taxes at an affordable price.

 

Before engaging in the services of a tax preparer, ask the following:

• What kind of formal tax training do you have?

• Do you hold any professional licenses or designations, such as Certified Public Accountant (CPA), Enrolled Agent (EA), Registered Accounting Practitioner (RAP), Accredited Tax Advisor (ATA) or Accredited Tax Preparer (ATP)?

• Do you take continuing professional education classes each year? How many hours do you take?

• How long have you been preparing tax returns?

• Have you ever done a tax return dealing with my situation?

• How much do you charge and how do you determine your fee?

• Are you open year-round to assist me with any problems I may have later?

• Do you offer e-filing as a service?

• Are you authorized to and will you represent me in an audit or collection matter with the IRS or the Michigan Department of Treasury should the situation come up?

• How do you stand behind your work?

• Can you provide me with the names of references I can contact about the quality of your work? Think about checking with the Better Business Bureau in your area for complaints about the services provided by the preparer.

• If the refund is direct deposited, is it deposited into my account or into an account owned by you or your company?

 

Consider the following when selecting a tax preparer:

• Avoid those who claim they can obtain larger refunds than other preparers or those who "guarantee" results.

• Avoid those who base their fees on a percentage of the amount of your refund.

• Choose someone you can reach after the return is filed and who is responsive to your needs.

 

Finally, remember:

• Taxpayers are responsible for the accuracy of all information on the return.

• Do not sign the return until it’s thoroughly reviewed by you. Make sure all personal information is correct (Social Security Number, address, number of exemptions, sources and kinds of income, etc.).

• Never sign a blank form and never sign in pencil.

• A tax preparer can be allowed to discuss an individual’s return with Treasury by checking the authorization box on the line just below your signature.

• Tax preparers must sign the return, fill in the preparer areas of the form(s) and provide you with a copy. Do not walk out the door without a copy of the return, as filed, in hand. Keep the copy of the provided return for future reference.

• E-filed returns are usually processed faster than returns that are mailed and still subject to review. Rely on Treasury for return processing timeframes, not the preparer. Individuals can check their refund status online by going to www.michigan.gov/wheresmyrefund.

 

To learn more about Michigan’s individual income tax and choosing a tax preparer, go to www.michigan.gov/incometax. The Internal Revenue Service also provides a list of approved federal tax return preparers.

 

For more information about e-filing, go to www.mifastfile.org.