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Making an impact in memory of Hammerin’ Hank

Posted on March 23, 2023 - 4:55 pm by

Last summer, our Padgett franchisees had the opportunity to hear from the President and CEO of the World Champion Atlanta Braves about what it takes to build a championship organization. As a thank you, Padgett made a donation in honor of legendary Braves player, executive and entrepreneur Hank Aaron, to the fund established in his name. The Henry Louis Aaron Fund was created support to the baseball legend’s lifelong passion to increase minority participation in baseball on the field, in baseball’s business operations, in careers at minor and major league level, and in the front offices of Clubs across Major League Baseball.

As we near Opening Day, we wanted to check back in with the organization and see how they are putting those funds to work in the community. Under the guidance of Eugene Brooks, the Braves Director of Diversity Marketing, the organization is following Hank’s lead and making a positive impact on the lives of so many in Braves Country, which comprises six states.

“We want people to know that this is not an exclusive group,” he says. “All are welcome here. Our goal is to invite everyone into the ballpark. I think what’s important about trying to make a diverse audience is appreciating where the sport came from.”

From Bill Lucas, the first Black general manager in major league baseball, to stars like Hank Aaron, Dusty Baker, Terry Pendleton, David Justice, and newly elected member of the baseball Hall of Fame Fred McGriff, it’s clear that Black history is the Braves’ history. “They had an impact on the city as well as the organization,” Eugene says. “They generated a lot of excitement for the sport. It was important for more kids to see African-Americans playing the game. Now, we have to create a new generation for our fanbase, teaching them this sport known as the ‘American Pastime,’ and the teamwork and respect that goes into it.”

As part of this initiative, the Braves recently produced a YouTube short film about NL Rookie of the Year Michael Harris II. “It’s called the Dream and the Journey,” Eugene says. “And that’s what it’s about, showcasing what hard work can do and how you can dream. We’re trying to show more cases like his, more stories of perseverance.”

“I’ve seen a lot of the kids around the Atlanta area loving the Braves, and some of the players that had an impact on the city,” Michael says in the video. “I feel like I wanted to be the same type of person and leave an impact on the city.”

A headshot of legendary Atlanta Braves baseball player Hank Aaron, taken in 1974, wearing his Braves uniform

Like so many, Michael is following in the enormous footsteps of Hank Aaron, who broke barriers on and off the field. After his record-breaking career, he became one of the first people of color in MLB upper-level management when he became the Braves’ vice president and director of player development. He also owned a number of businesses around Atlanta and across the country. Long after his playing career was over, he was still looking for ways to make an impact.

“Giving back to the community, restoring fields, granting scholarships, creating opportunities for people to learn the game… that’s what Hank was about,” Eugene says. “It’s an expensive sport. You lose participation in the sport as kids grow up because it gets expensive. You need organizations like this to help schools and kids and rec centers, buying baseballs, cleats and uniforms. That’s where the fund becomes really important to the community.”

“I was introduced to baseball at age 7 when my dad took me to see the Braves at Atlanta Stadium,” he says. “There was a time when my grandmother didn’t have the funds to get me a baseball, so she’d make me one from scraps of fabric. [Being part of the Braves] is very important to me and it’s an opportunity to come full circle and honor my grandmother for doing what she could to give me a baseball. I care about bringing the game of baseball to more African Americans because I know what that’s like.”

Today, the Braves have poured almost $8 million to the community and showcase minority participation in the sport through hosting games like the Native American showcase, the ACLU showcase, and the Hank Aaron invitational.

“We have to do our part to provide opportunities and showcase people of color.” Eugene says, “We can’t help everybody every year, but we help where we can.”

“We all know Hank was great a baseball player, but everyone who has ever come into contact with him knows that he was an even better person,” Padgett president Roger Harris said. “We wanted to continue to honor Hank’s legacy with our gift to the fund and hope that many in our organization will do the same.”

So, on the eve of a new baseball season, let’s remember Hank and the many who have followed him who are using their time and resources to make their communities a little brighter.

If you would like to learn more about the Henry Louis Aaron fund or make a contribution, please visit https://www.mlb.com/braves/fans/hank-aaron/fund 

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Everything you need to know about filing an extension

Posted on March 21, 2023 - 9:35 pm by

The tax deadline is now less than a month away! But if you aren’t ready, don’t worry. It’s not too late to request more time to file. Here’s what you need to know about filing an extension: 

What does filing an extension mean?  

If you need more time to file an accurate and complete federal tax return, you can file Form 4868 with the IRS to request an extension. This will give you six more months, or until October 16, to file your return.  

Note that an extension only provides additional time to file your return. It does not extend the amount of time you have to pay any estimated tax due, so be sure to make any necessary payments by April 15th (April 18th for 2022 tax returns) or check out other repayment options.    

How do I know if I need an extension?  

Your tax preparer may recommend you file an extension for several reasons. You may need an extension if parts of your return are particularly complex or may be affected by pending legislation. If this is the case, your tax preparer should let you know what to do.  

If you are still waiting on any tax forms or additional information (e.g. Schedule K-1s, corrected 1099s, or other tax documents), you’ll likely need to extend to avoid filing an incomplete return or amending your return later. Filing an extension is usually easier and cheaper than rushing your return and needing to amend it later.   

If you don’t have a tax preparer but need assistance with your taxes, this may be another good reason to extend! Since the April deadline is fast approaching, many tax professionals won’t have time to finalize your return. It’s a good idea to work with a professional to make sure your taxes are correct, so even if your chosen tax professional will not be able to file your return by April 18, you can still file an extension and work with them later.  

How will an extension affect me?  

Filing an extension is better than filing an incomplete or incorrect return. As long as you have withheld or paid enough money into the IRS by April 18, an extension won’t change much about the tax filing process. If not, then you will need to make a payment when you file an extension to avoid late payment penalties later. You should still provide information to your preparer as it becomes available. Believe it or not, an extension won’t increase your odds of being audited.  

If you need help getting your taxes done correctly and on time—whether that’s in April or October—Padgett’s nationwide network of CPAs and EAs can help. Find an office near you today!   

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What should you do if you can’t pay your taxes?

Posted on March 17, 2023 - 9:27 pm by

While many of us are hoping to have a payday when our tax refunds arrive, if you owe taxes, you may find that April 15th is the wrong kind of “pay day.” If you’re struggling to pay your taxes this year, here’s what you need to know.  

1. File your return or extension by the due date.

To avoid any penalties for late filing, the first thing you should do is file your personal return by April 15th or request an extension of time to file. Since April 15th falls on a weekend this year and April 17th is a national holiday, April 18th is the filing deadline for 2022 individual returns. Note that an extension only extends your time to file, not to pay your balance due. Talk to your tax advisor to get your return or extension filed on time.  

2. Pay what you can.  

Even if you can’t pay the full amount at once, go ahead and pay what you can to reduce your overall balance. A lower balance may mean you owe less in interest late payment penalties later.   

3. Determine if you qualify for an installment payment plan.  

Talk to your tax preparer about applying for a payment plan. To manage your payment plan online, you’ll need to set up an account on the IRS website—you can follow our guide to get started. There are various kinds of payment plans, including short-term (120-days or less) and long-term, and they each have different fees and interest. Talk with your financial advisor about which option will be best for you.   

4. As a last resort, talk to your tax advisor about an offer-in-compromise.  

If you find that you aren’t able to pay your taxes, even with an installment plan, you may be eligible for an “offer in compromise,” which allows you to settle your debt for less than what you owe. The IRS considers factors that affect your ability to pay, like your income, expenses, and asset equity to determine eligibility. This program is not for everyone, so be sure to talk to a qualified tax professional about your options.  

We understand that owing the IRS money can be stressful, but don’t panic! A qualified tax professional can assist you in finding the best ways to manage your debt. Padgett has a nationwide network of CPAs and EAs who are ready to help, so you don’t have to worry. Find an office near you today!  

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10 reasons your 2022 tax refund may be lower

Posted on March 9, 2023 - 7:23 pm by

Have you already filed your 2022 tax return? If so, you may have noticed that your refund is lower than it was in 2020 or 2021. As we return to the “new normal” after the COVID-19 pandemic, many tax credits and deductions from the last two years are no longer available in tax year 2022. This may be contributing to a smaller tax refund or a larger balance due.    

Here are some of the key differences to keep in mind.

For individuals:

  • Economic Impact Payments (EIP): Also known as stimulus checks, EIPs were not issued to taxpayers in 2022. You likely claimed a tax credit on your 2020 or 2021 tax return if you were eligible for a stimulus payment but didn’t receive it.   
  • Child tax Credits: For 2022, the credit is now worth $2,000 per child, down from $3,000 per child and $3,600 for children under age six in 2020 and 2021. This credit now ends when your child reaches age 16 rather than 17. This could further reduce the amount of credit you receive.  
  • Child and Dependent Care Assistance Credit: In 2021, this credit was refundable and taxpayers whose adjusted gross income (AGI) was less than $125,000 were eligible for the maximum credit of 50% of eligible expenses paid. In 2022, the maximum percentage dropped to 35%. The full credit is only available to taxpayers with AGI $15,000 or less. The credit is now nonrefundable, meaning it’s limited to the amount of tax you owe. 
  • Earned Income Tax Credit: This credit has reverted to pre-pandemic rates of 7.65% instead of the increased amount of 15.3% in the last two years. The eligibility ceiling has also decreased to $7,320.  
  • Charitable contributions for non-itemizers: In 2020 & 2021, a $300 per person deduction was available to taxpayers who made a qualified charitable donation and did not itemize. For 2022, only taxpayers who itemize can deduct charitable donations. 
  • Employer-Provided Child Care: This year, only $5,000 in employer provided childcare is excluded from your taxable income on the Cafeteria Plan. This is a decrease from the $10,500 that was excluded from income in previous years. This means more of your income is taxable in 2022, which could result in a lower tax refund. 
  • Healthcare Premium Tax Credit: This is another credit that has reverted to pre-pandemic rules. In the past few years, the credit expanded, allowing individuals on unemployment to qualify. However, in 2022, the eligibility is based on household income in comparison to the federal poverty limit. If you were eligible for the credit before, your eligibility may have changed. 

For businesses:

As a business owner, you may also face an increase in taxable income from your business activity. There are a few reasons for this, including: 

  • COVID-19 Employer Payroll Credits and loan forgiveness (including Employee Retention Credits, Paycheck Protection Program and Paid Sick and Family Leave Credits): During the pandemic, several credits, loans and benefit programs were available to businesses. In 2022, many of those pandemic relief efforts have expired.  
  • Business Interest Expense Limits: The calculation for the limitation has changed in 2022 and may result in less of a deduction for interest expense.  
  • Corporate charitable deduction limits: The charitable contribution limit has reverted to pre-pandemic rules. In 2022, corporations are limited to a charitable deduction of no more than 10% of their taxable income. This is down from the 25% limit imposed in 2020 and 2021.  

Are you unsure you’re getting your maximum tax refund or feeling surprised by your tax results? That may be a sign that your tax professional isn’t right for you. Padgett’s nationwide network of CPAs and EAs can help, so find a location near you today! 

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How Padgett helped Jessica Riedell’s business grow

Posted on March 7, 2023 - 8:47 pm by

When Jessica Riedell was laid off from her former company, she didn’t see it as a closing door, but an opening one: her opportunity to start a business of her own.  

With a background in horticulture and public gardens management, Jessica quickly found her interest in residential maintenance. “Chicagoland, if you’ve never been here, is just kind of a whole ‘nother animal compared to landscaping in the rest of the world,” she said. “They have very specific kinds of planting and maintenance styles. So I took on a job with a small family-owned company that was up-and-coming in the Chicagoland area.” 

She began her career in the company’s residential maintenance branch, working in the field alongside the other landscaping crews. She soon progressed through the company, gaining valuable experience along the way. “I was eventually essentially managing my own little business of 30 to 40 clients per year,” she said. 

But a few years ago, the small company she started with was bought out. Jessica’s residential maintenance branch then closed. “The branch I was working for was not their ideal, because they do mostly commercial landscaping or large construction install jobs,” she said. “My manager at the time was saying, ‘If I was younger, I’d start my own business. There really is an opportunity here.’ And I finally picked up the hints that he was putting down and said okay, I’m going to start my own business.” 

So Jessica started The Riedell Group. But starting a business during COVID-19 wasn’t easy: “It was a lot of Zoom meetings and online communications to try and pull everything together, get everything up and running.” Thankfully, because the company she had been with was closing her branch, her non-compete contract was no longer an issue. “So I was able to call all of my customers and say, ‘Hey, this is the deal.  They’re closing their doors, but I’m going to start my own company. I want to try to keep everything the same as you’ve been doing in the past so we can keep rolling forward. Are you interested in coming on board?’” 

Almost unanimously, Jessica’s customers agreed and supported her new initiative. And because she was starting her business in the winter, she had some time to get things organized. “I needed some help in the accounting side of things. I asked a few friends and ended up hiring one accountant for the first couple of months,” Jessica said. “But it was tax season, so they were too busy. I was in the middle of trying to get my company started and nobody seemed to be able to spend the time answering what seemed to me like simple questions.” 

So she asked around some more, and was directed to Dave Gribben at Padgett Barrington. “I reached out to him and he was more than happy to spend an hour with me and consult and direct and guide me. I just felt really comfortable talking to him. That then progressed into monthly consulting and tax preparation. As we came around to the second year, it grew into a bit more reliance on Padgett to help guide us.” 

The support of Padgett and Jessica’s previous customers was key to her success. “The tough part was getting financing to just start a business,” she said. “I ended up working with my customers and setting up pre-pay programs where they would pay for their maintenance for the whole season. My clients understand business; a lot of them are running their own companies. They understand cash flow and were able to provide that money for me to get through those first few months. And Padgett helped guide me through how to set that up and account for it all correctly.” 

Now, in only her third year of business, Jessica is now set up to surpass $3 million in sales. “I didn’t have a bunch of debt and a bunch of loans, which I think was helpful,” she said. Jessica also recommends seeking advice from trusted friends and advisors. “I must’ve called like 10 or 15 other people I know in the business and asked their advice. How do you do this pricing? What’s your model based on? What payroll program do you use? What bookkeeping program do you use? Who is your accountant?” 

“I think that tenacity is the way to go,” she adds. “If you’re starting a business, take the time to do a business plan and really understand how you want your business to run and give yourself direction of where your company is going to go. There’s definitely days when it’s tough and difficult and challenging and you wish you didn’t even get up that day. But it’s all worth it when you have happy customers and beautiful landscapes and happy employees that come to work every day excited to be there.” 

Jessica views the loss of her previous job as a blessing in disguise. “I know getting let go or having a company shut down your branch can be devastating, but it was honestly the right timing and a blessing for us to be able to proceed into me owning my own business, getting to do what I wanted to do.” 

 

If you need a trusted advisor to help your business grow, Padgett can help! We have a nationwide network of EAs and CPAs who are ready to work with you. Find a location today!

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Employee gifts: the must-know tax rules

Posted on March 3, 2023 - 10:03 pm by

How do you show your employees you appreciate their hard work? If you choose to give your staff gifts or throw them a party, remember that only certain types of gifts are tax deductible. Here’s a quick overview of some employee gift options to help you show your appreciation: 

Employee Gifts:

The IRS doesn’t recognize non-cash gifts of nominal value as taxable income, but rather as a de minimis fringe benefit (one in which the value and number of times it’s given is so small, accounting for it isn’t practical). But cash or a cash equivalent — like gift certificates or gift cards, or prepaid cards — are taxable employee gifts. Regardless of the amount, cash gifts must be included in the employee’s wages.

However, depending on circumstances, the IRS states that a gift certificate for a specific item can be considered a de minimis fringe benefit. The item must be one “that is minimal in value, provided infrequently, and is administratively impractical to account for.” 

Parties: 

Thinking of throwing an office party? Remember, the food is fully deductible only if the party is for the benefit of employees and their families. Historically, if clients, independent contractors, or customers attend the soirée, then entertainment rules apply and only 50% of the food and beverage costs associated with these partygoers are deductible (and this applies even if you hold the party virtually). Don’t get too lavish! The IRS always keeps an eye on business deductions and the costs associated with an extravagant event. 

Thinking of showing your thanks with some employee gifts this year? Reach out to our trusted network of accountants, tax experts and business advisors at Padgett so we can help ensure your employees benefit from the present and you make the most of the available tax deductions. Find an office near you today!

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MFJ vs MFS: filing options for married taxpayers

Posted on February 16, 2023 - 7:07 pm by

If you’re married, you may not be aware of your tax filing options and assume that filing a return jointly with your spouse is the only choice available to you. In fact, married taxpayers can file separate returns. It’s tricky, though. There are specific situations where filing separately makes sense, and other times where it doesn’t. It’s important to choose the right method, because once you file jointly, you can’t amend your return to filing separately.    

There are no rules of thumb on when it makes sense for married taxpayers to file separately. Although in most cases, filing jointly will produce the most beneficial results, tax law has grown so complex that a great number of factors need to be considered. So what’s the real difference between the two options?   

Married Filing Jointly (MFJ)

Married filing jointly means that you and your spouse will file just one tax return, with income and deductions for both of you. The IRS usually encourages couples to file jointly. You’ll usually get a lower tax rate this way, and the IRS offers some tax breaks for joint returns. Some common benefits available to joint filers include:  

  • Earned Income Credit (EIC)
  • Dependent care credit 
  • Tuition credits
  • Child-care credits (unless you lived apart from July to December)
  • American Opportunity Credit
  • Lifetime Learning Credit for education expenses
  • Student interest loan deductions
  • More limited IRS contribution deduction
  • Lower limit on capital losses  

If you live in a community property state, such as Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin, a joint return is also much more convenient, as it avoids some tricky tax rules on separate returns.   

Married Filing Separately (MFS)  

There are some cases where filing separately may be a better choice for married taxpayers. Filing separately means that you will each file your own tax return and keep your income and deductions separate from your spouse’s.    

You may want to file separate returns if it means some deductions become available. For example, the spouse with the lower income may be eligible for a medical expense deduction if their income is kept separate, but not if it’s combined. Keep in mind, your filing status selection on your federal return could impact your state income tax return. Before finalizing your decision, be sure to consider the impact to both your federal and state returns.  

There are a few reasons to file separately even if doing so means you collectively pay more tax or get less of a refund. One is when you and your spouse keep separate finances as a rule. Another is to avoid being liable for each other’s amounts due. When filing jointly, the IRS can come after either of you to collect the full amount. And remember, if you’re filing separately and need to extend, you’ll need to each file your own extension as well.

How to choose?

The best way for married taxpayers to know for sure which method of filing is the best fit is to prepare the return both ways and compare the results. This means you’d have to prepare three returns—the joint return, and two separate returns. But who has time for that?  

Happily, most tax professionals can use their software, along with their knowledge of tax law and how it applies to unique separate filing situations, to determine whether it’s likely that filing separately would be better from a tax due or refund perspective. If your preparer isn’t offering this service, you might be missing out!     

If you want to be sure you’re not leaving tax money on the table, turn to a tax professional to help you file. Padgett’s network of CPAs and EAs can help you determine which method of filing is the best fit so you don’t have to worry. Find a location near you today!  

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8 tips to manage stress during tax time

Posted on February 8, 2023 - 10:44 pm by

When filing mistakes can be costly, it’s understandable that tax time can be stressful if trying to handle your finances on your own. This time of year can be especially difficult if you’re dealing with issues like Seasonal Affective Disorder, as wintry weather can add extra stress. So, how do you manage stress to stay in control now and during other stressful times?

Avoid financial surprises.

Last year, Capital One found that 73% of Americans say their finances are a major cause of anxiety. But money doesn’t have to be so stressful! While you can’t always predict a costly emergency, working with an accountant throughout the year can help you avoid many other unexpected costs, like a surprise tax bill. With a good accountant by your side, finances can be one less worry on your plate, allowing you to feel more in control of your situation.

Keep your desk or work area clean.

If you’re feeling overwhelmed, try tidying your workspace. You may find that a clean desk can be a huge boost to your productivity—up to 84%! Regularly cleaning and disinfecting commonly touched surfaces can also help you avoid getting sick.

Open and sort any physical mail.

When you get mail, open it, and consider what kind of mail it is. Is it something to do, something to delegate, something to file, or something to toss? Sort your mail accordingly. Make sure you’re holding onto any financial statements or tax documents for your accountant. Don’t forget to actually do the task or toss the junk! Even neat piles become a mess tomorrow.

Organize your email inbox.

Read your incoming emails and sort them the same way as your physical mail. If you find email notifications distracting, you can try a strategy called email batching. Instead of checking and responding to emails constantly, set aside time to respond to them in “batches.” Checking your email only a few times a day can help you manage stress and may give you more time to focus on other tasks.

Set realistic priorities.

Don’t overload yourself or commit to doing more than you’re able. Consider what you can realistically get done in your time frame. If you’ve already overcommitted, prioritize your tasks. Do what you can, and for what you can’t…

Communicate honestly and promptly.

When problems arise, let people know as early as you can if a commitment you made can’t be met. If possible, reschedule for when you will be able to meet their needs. Keeping communication open—with both your clients or customers, your staff, and your coworkers—can help avoid a lot of stress. And when you’re short on time, don’t be afraid to skip the small talk and focus on business.

Establish checklists and set procedures.

If you have standard ways of doing tasks, you may find yourself feeling less worried about things getting done correctly. Research has shown that having a routine can make it easier to manage stress. Whether it’s getting your financial system organized with an accountant, setting procedures for handling incoming tasks, or just developing daily habits for yourself, maintaining structure during stressful times can help you feel like you’re in control of your surroundings.

Don’t do it alone.   

Mental health is as nuanced and individualized as physical health, so no solution is one-size-fits-all. As with taxes, mental health is something you shouldn’t hesitate to discuss with a professional, especially if you are struggling with serious negative thoughts or intense anxiety.

If you’re feeling overworked, don’t be afraid to delegate tasks to others. That’s where Padgett can help. Finding a full-time tax and accounting partner can help take some time-consuming tasks off your plate so you can spend more time and energy on the things that matter most. Reach out to a Padgett tax professional near you today to find out how we can help get your life back in balance.

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6 tax deductions self-employed workers should know

Posted on February 1, 2023 - 10:13 pm by

There are a host of tax deductions available to self-employed individuals that can generate real savings when filing your tax return. As you prepare to file your 2022 taxes, here are a few deductions you should be mindful of:    

  1. Home office expenses: If you’re using an area of your home regularly and solely for business, you may be able to deduct expenses for a home office from your taxable business income.     

  2. Office supplies: Hang on to those receipts for pens, paper and printer ink as you may be eligible to deduct the total cost of your office supplies.   

  3. Social Security: Remember that if you’re self-employed, you’ll be paying more Social Security taxes than if you were on the payroll of a company. However, you can deduct half of these taxes on your return.  

  4. Vehicle expenses: If you use your vehicle for business, you can deduct either the actual expenses or the standard mileage rate, based on the business use of the vehicle. For the first half of 2022, the standard mileage rate is 58.5 cents per mile, and it increased to 62.5 cents per mile for the second half of the year.

  5. Section 179: This part of the tax code allows profitable business owners the opportunity to deduct up to the full cost of qualifying capital assets — like furniture, equipment and technology — immediately rather than depreciating them throughout their use. Any unused deductions can be carried forward and put toward next year’s tax return.  

  6. Food and beverages: The stimulus bill passed in December 2020 changed the deduction for meals, allowing businesses to deduct 100 percent of their qualifying food and beverage expenses if purchased from a restaurant in 2022.    

Curious about what deductions you might be eligible for on your 2022 tax return? Padgett’s talented network of CPAs, EAs and tax professionals near you can help navigate the confusing world of tax planning and filing. Find an office near you today! 

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How to choose a tax preparer

Posted on January 17, 2023 - 6:44 pm by

With tax filing season starting this month, it’s time to think about how you’ll be filing your taxes. If you choose to have someone prepare your tax return, it’s important to choose wisely. You’re trusting this person with your financial information and depending on them to prepare your tax return accurately so that you don’t encounter penalties. But how do you know if your tax preparer is right for you or your business?

Most tax preparers are professional, honest, and provide excellent service to their clients. Unfortunately, dishonest tax preparers who file false income tax returns or file without regard to compliance still do exist. Although the tax preparer always signs the return, you are ultimately responsible for the accuracy of every item reported. So how do you find a tax preparer you can trust? Here are 3 main qualities you should look for.

Are they properly qualified? 

The first thing you should look for is a tax preparer who is qualified. Anyone paid to prepare tax returns for others should have a thorough understanding of tax matters. They are required by law to have a preparer tax identification number (PTIN) and include it on the return along with their signature. Most tax preparers will also need an Electronic Filing Identification Number (EFIN) to e-file on your behalf. Make sure your tax preparer has up-to-date identification and can legally file your return.

You should also check the credentials of your tax preparer. Only attorneys, enrolled agents (EAs), and certified public accountants (CPAs) can represent taxpayers before the IRS in all matters, including audits, collections and appeals. Non-credentialed tax preparers are not qualified to represent taxpayers, not even for audits of the returns they prepared.

Do they communicate well? 

Your tax preparer should have good communication skills. During the preparation and filing process, you want to work with someone who clearly explains things to you in a way that you understand. They should provide information and advice on a regular basis and communicate with you to make sure they have all the necessary information to prepare your return.

If the IRS examines your return and has questions, communication remains important even after your return is filed. On your tax return, you can designate your paid tax return preparer or another third party to speak to the IRS concerning its preparation, payment or refund issues, and mathematical errors. Consider whether the individual or firm will be around for months or years after filing the return to answer questions about its preparation.

Do they offer the services you need? 

You also want to look for a tax preparer who has the right skill set for you. Are you filing just as an individual, or are you filing business taxes, too? Make sure your tax preparer offers the service you need. Consider the industry your business is in and look for a tax preparer who is comfortable working with the requirements and regulations for your industry.

Consider what other services you may need in the future, as well. Do you just want your taxes prepared, or do you want someone who can be an advisor to you and your business? Do you need accounting or payroll management services? You may want to consider finding a tax preparer who offers these other services so you have everything you need in one place.

Unless tax law is a hobby of yours, you probably need a tax professional to help you prepare your return — especially if you’re a business owner. To the government, your business is just a series of transactions, and the IRS places the same emphasis on reporting requirements for a small business as they do a large one. A good tax preparer can help you comply with requirements and avoid costly mistakes.

If you don’t have a tax preparer yet or your current one isn’t a good fit, Padgett has a nationwide network of EAs and CPAs who are ready to help. When you work with a Padgett partner, you’ll find someone who understands your business and can do more than just prepare your taxes. Find an office near you today!

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