Tax season is already upon us. Nearly three weeks into the new year many have received their W-2's and are ready for their refund.
But, before you hand over your private information, it's important to take precautions.
How can any of us forget the incredulous Mo Money Tax Service? The Memphis-based tax preparation company was accused by the government of questionable business practices.
In 2012, hundreds of complaints stacked up and delayed refunds. Customers were charged undisclosed fees and refund checks bounced. Customers' files with names, addresses and social security numbers were found tossed in a dumpster behind one of the businesses. The Better Business Bureau says people must do their homework when it comes to who will prepare your taxes.
More: Mo Money, Mo Problems
Mike Conway of Liberty Income Tax Services has been a certified public accountant for 40 years. He says if you're looking for a reputable tax preparation service, you need to do some research about the business and the people preparing your taxes.
"They've been through weeks and weeks and weeks of training, the preparers that work for me in my two offices most have been with me for a number of years some as many as 9-10 years," Conway said.
Many people still want their cash back fast. It's called rapid refunds. There was a time you could get your entire refund within 24 to 48 hours, but Uncle Sam has cracked down on this service.
"All that really is, is an advance on your money, probably at a relatively high cost," explains Randy Hutchinson, President at Better Business Bureau of the Mid-South.
Hutchinson also warns against tax preparation companies that pop up during tax season and are gone right after.
"If they're just popping up and they don't have any experience or at least any local reputation, I'd just be real careful about dealing with them," he said.
The best way to make sure you get back what you're owed is to be wary of tax preparers promising larger refunds than the competition, Hutchinson added. Avoid preparers who base their fee on a percentage of your refund, and take note when a preparer encourages you to do something illegal.
"That tax liability is the taxpayers and once you sign on the dotted line, they're accepting responsibility so they need to be very careful," warns Conway.
The bottom line is to do your homework before you file.
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