At first glance, it might be tempting to lump a tax refund consultant into the same category as a return preparer. After all, they sound similar; shouldn't they provide a similar service? In fact, consultant certifications are only required if the individual in question is actually preparing your documents and being paid for it. If they're acting as a tax refund consultant, they may not prepare your return at all.
The Difference Between Prep And Consulting
A consultant is by definition someone who offers advice or recommendations. Making those recommendations happen may not even be part of their job description. It's quite possible that all they will do for you is provide you with a list of things which you should do.
So what value do they provide? Typically, they have expertise with what is required to help lower your tax liability in the coming year. Rather than looking at your financials and preparing documents to be sent to the IRS, they look at your records from several consecutive years and go beyond what the IRS would see. They'll evaluate a number of different things which you might be able to improve or change in order to improve your situation with the IRS. These should all be legal, although they may exploit little-known loopholes. They're often fairly complex and difficult for a layperson to understand (which is why you need an expert's assistance with them).
Why Hire One?
The majority of people who work with these professionals have substantial incomes and pay a lot to the government. The goal here is to spend a little bit of money to work with someone who could potentially lead to a lot of savings. If you make less than $100,000, you're probably not going to see very substantial savings and it's unlikely that visiting one is worth your time. However, if you make more than that you might be missing out on advantages to which you are entitled. These people can help you spot issues like that and remedy them, leading to an improvement in your overall burden.
What To Bring To Your First Appointment
These meetings have an inherently higher level of information required than the meetings where you get your documents prepared for the IRS. Bring everything. That means returns from previous years, financial documents, information about expenses, everything. The potential for credits and deductions is quite vast, so telling your advisor as much as possible about your habits will help him or her understand your life in detail and aid in spotting potential savings. At a minimum you should present your full roster of IRS forms.
The Difference Between Prep And Consulting
A consultant is by definition someone who offers advice or recommendations. Making those recommendations happen may not even be part of their job description. It's quite possible that all they will do for you is provide you with a list of things which you should do.
So what value do they provide? Typically, they have expertise with what is required to help lower your tax liability in the coming year. Rather than looking at your financials and preparing documents to be sent to the IRS, they look at your records from several consecutive years and go beyond what the IRS would see. They'll evaluate a number of different things which you might be able to improve or change in order to improve your situation with the IRS. These should all be legal, although they may exploit little-known loopholes. They're often fairly complex and difficult for a layperson to understand (which is why you need an expert's assistance with them).
Why Hire One?
The majority of people who work with these professionals have substantial incomes and pay a lot to the government. The goal here is to spend a little bit of money to work with someone who could potentially lead to a lot of savings. If you make less than $100,000, you're probably not going to see very substantial savings and it's unlikely that visiting one is worth your time. However, if you make more than that you might be missing out on advantages to which you are entitled. These people can help you spot issues like that and remedy them, leading to an improvement in your overall burden.
What To Bring To Your First Appointment
These meetings have an inherently higher level of information required than the meetings where you get your documents prepared for the IRS. Bring everything. That means returns from previous years, financial documents, information about expenses, everything. The potential for credits and deductions is quite vast, so telling your advisor as much as possible about your habits will help him or her understand your life in detail and aid in spotting potential savings. At a minimum you should present your full roster of IRS forms.
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