Calgary, AB – April 15, 2013 – With only two weeks left until the April 30 tax filing deadline, the Better Business Bureau urges you to avoid making a last minute decision when enlisting the help of a tax preparation service.
"There are a number of potential pitfalls to watch for when dealing with a tax preparation service," says Sandra Crozier-McKee, president and CEO of the BBB serving Southern Alberta and East Kootenays. "So it's important to do your research to protect yourself from any unpleasant surprises like unforeseen penalties or fees."
In 2012, BBB received over 4200 complaints against tax return preparation businesses across North America - 60 of which came from Calgary and area. Commonly, complainants stated their returns were accompanied with high fees not previously noted or discussed. Other complaints alleged the tax preparer made errors in their return which resulted in fines.
If you are planning to work with a professional tax preparer, BBB offers the following tips:
- Get references and do your research. Get referrals from friends and family on who they use and check out the company at calgary.bbb.org to see its history of complaints and other background information on the company.
- Look for credentials. Seek a tax professional who is an Enrolled Agent, Certified Public Accountant or a Tax Attorney. These preparers have completed extensive examinations on tax matters and must stay current by meeting continuing professional education requirements.
- Get a firm estimate in writing. The cost of preparing your return will vary depending on the complexity and completeness of your information.Before you agree to move forward, present all of your information and get a firm estimate in writing.
- Don’t fall for the promise of a big refund. Be wary of any tax preparation service promising larger refunds than the competition, and avoid tax preparers who base their fee on a percentage of the refund.
- Keep in contact. Many tax preparation services only set up shop for the months leading up to April 30. In case Revenue Canada finds errors, or in case of an audit, you might need to be able to contact your tax preparer throughout the year; be sure to use a company you can stay in touch with.
- Avoid Tax Rebate Discounting. Tax rebate discounting is a process where a tax preparation firm purchases the right to the anticipated tax rebate in exchange for a percentage of the rebate amount. Canada Revenue Agency rules establish the maximum discounting fee as 15 per cent of the first $300 and five per cent of any remaining amount. No other fees for preparation or filing the return are permitted. To avoid Tax Rebate Discounting, consider filing your taxes electronically and requesting to have your money deposited directly in your account.