MN Dept of Revenue Advises Taxpayers on Hiring a Tax Preparer

The Minnesota Department of Revenue suggests asking the following questions to your prospective new tax preparer:

• What kind of formal tax training do you have?
• Do you hold any professional licenses or designations?
• Do you belong to any professional organizations?
• Do you take continuing professional education classes each year?
• How long have you been preparing tax returns?
• Have you ever done a tax return dealing with my situation?
• Are you available year-round if I need to contact you?
• Have you ever been disciplined by any governmental authority?
• Will you represent me if I’m audited?
• How much do you charge and how do you calculate your fees? 
• Can you provide me with names of references I can contact about your work?

Here are some additional things to consider:

• In my opinion, most taxpayers are best off preparing their own returns.
• I like Turbo Tax and other off the shelf software packages.
• Those who rely on paid preparers still need to understand how their taxable income and deductions are computed and reported.
• Your taxes are your responsibility even if you hire someone to prepare your returns for you.
• I mostly prepare returns for small business owners and others having unusually complicated tax forms.

- Mark S Gleason CPA
  www.lakes-cpa.com

SCORE Takes a Look at Accounting and Taxes

SCORE (Service Corps of Retired Executives - a resource partner of the Small Business Administration) has recently issued "A Look at Accounting & Taxes."

This document presents some interesting statistics about what small business owners' attitudes about the burden of tax preparation, bookkeeping, and payroll compliance costs.

40% say that bookkeeping and taxes are the worst part of owning a small business.
47% dislike the financial cost of bookkeeping and taxes.  It is surprising to learn that only 8% dislike the inequity of the tax code and only 8% dislike all the paperwork. Only 10% dislike changing regulations an confusion.

40% claim to spend 80+ hours per year on taxes, payroll, working with accountants and obligations and 16% claim to spend over $20,000 complying with the tax laws.

Although I have serious reservations about the methodology of this study and the sources cited in the bibliography, it's interesting to note that many business owners don't seem to mind the administrative headaches and time required to comply with tax laws.

- Mark S Gleason CPA