Who Should Prepare Your US Tax Return?

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Let me say right at the front that I’m not going to be objective. I hope you call our firm and find out knowledgeable, experienced and affordable our services are. The two partners, Megan Hughes and Diane Kennedy, have decades of experience working with specific cross border tax issues.

But let’s say you want to shop around first. The first question is who CAN file your tax return?

In the US, you will probably need to file both a state and federal tax return. Some states only allow Certified Public Accountants (CPAs), attorneys and Enrolled Agents (EAs) to prepare the forms. The IRS wants to make the same requirement, but there is currently a court case by some people who have no credentials or experience who don’t want the IRS to restrict tax preparation to only certified preparers.

If you want to keep your information private, you’ll need to use either an attorney or a CPA. Neither can be subpoenaed and forced to give client tax information to the government, a party who is suing for, for that matter, anyone you don’t want to tell.

This past year, I had to fix some returns that were incorrectly prepared by an accountant in the UK. He had experience in the UK and had all the property credentials…for the UK.

Some of the mistakes that occurred:

  1. He did not prepare the required state returns. This could have led to their business structure being dissolved. If they were sued, they would probably not have the needed asset protection. They had a loss in the year, so there was no tax due. But if there had been, they would have had penalties and interest charge and could have even lost their property. As it was, the loss was not available to offset future income years.
  2. The expenses were not recorded from the Closing Statement. There are plenty of expenses available for deductions against income now, or in the future.
  3. The depreciation was not correctly calculated. If the return had been audited, they would have been subject to penalties and interest.

There were more mistakes, but I think you get the general idea. Your tax return needs to be filed timely and correctly. Make a mistake and it’s going to cost you.

You need an expert to help you.