By Sandra Guile
Better Business Bureau
“In this world, nothing is certain except death and taxes.” – Ben Franklin, in a letter to Jean Baptiste Leroy in 1789
People who haven’t yet filed their tax returns should be on the lookout – tax scams continue to rank high in BBB’s Scam Tracker data and on the IRS’s Dirty Dozen list. Mistakes on a tax form can be costly, and cutting corners can compromise your identity. Keep your information safe during tax time with these top three tips.
Stay secure against scams
The IRS continues to issue warnings about scams designed to steal taxpayers’ identities. The scammer usually contacts their victim either by phone or online claiming to work for a government agency and requesting personal information. Remember, the IRS will only contact taxpayers by mail to inform them of an audit – not email or telephone – so if you receive a call from a person pressuring you to pay money now, hang up. It’s most likely a scam. More details how to keep your information safe and the different tactic scammers use are available on irs.gov.
Learn more about possible loans
If you decide to use a tax preparer to file your return and they offer you a check or a debit card to expedite your refund – ask questions. This is typically a loan, not your refund, meaning that there are usually hidden fees and interest rates from 50 to 500 percent attached. Though your preparer may say that the loan gets you your money quicker, it’s usually no more than one or two days faster than the IRS’s 10-day average. Also, if you sign up for a loan and your preparer makes a mistake calculating your refund, you may have to pay back the loan plus any fines and fees.
Find the right person to prepare your files
Not all tax preparers are created equal, so it’s important to see what certifications they have, what their business history is like, and what happens if the IRS rejects the return they file for you. Check their credentials and ensure that they are a certified public accountant (CPA). Some tax preparation companies are only open for a few months every year, and it can be hard to track the preparer down if there are problems with your return; asking questions up front gives you an idea of what to do if they’re closed. Ask for referrals from friends and check out any potential companies using bbb.org.
Be wary of promises of a large refund because until the return is filed and processed, there’s no way to tell if you’re going to receive a refund or exactly how much it will be. When considering someone to prepare your return, read any contract carefully and understand exactly how much it will cost for their services. Make sure the contract covers whether or not the preparer will represent you if you incur an audit; have them explain any terminology or jargon so that you understand everything you’re signing up for. After the return is done, don’t be shy about double-checking the math and ensuring that all of the information is entered correctly.
Even though taxes are one of the two things in the world said to be certain, it can be difficult to know how to take care of them during tax time. Follow these tips to secure your refund and keep your identity safe. Visit bbb.org to find out about potential scams and to learn more about businesses you’re thinking of using.
Sandra Guile is the Community Outreach Specialist for BBB. She promotes BBB’s message of marketplace ethics through public speaking engagements, presentations, media relations, press releases, web content, and other written materials. Contact Sandra at (513) 639-9126 or sguile@cincinnati.bbb.org. Your BBB is located at 1 East 4th Street Suite 600 Cincinnati, Ohio 45202 – to reach the office, call (513) 421-3015.