2020 Personal Income Tax

2020 Personal Income Tax

It’s hard to believe how fast 2020 flew by! It is time to file personal income tax forms (1040) once again. While most people don’t think about filing those taxes until the last minute, there are some people in the Santa Barbara area (and of course other places as well) who should think about their upcoming taxes as soon as possible. These people include:

• Those who have become self-employed or are working a new job (at a different pay rate)
• Those who are new to the Santa Barbara area and will be looking for a qualified tax preparer.
• Those who filed their own taxes last year, and would like a professional review
•         Those who were unhappy with their prior accountant and want to find a new tax preparer.

Once tax season rolls around Santa Barbara Income Tax preparers will be in full swing preparing taxes. The “crunch time” starts once individuals receive their 1099s and K-1s, which is usually by the end of February. You can schedule your appointment early to make sure you get the appointment time you want.

Santa Barbara Tax and Accounting suggests that you ask the following 4 questions about a tax preparer before hiring them.

What are Their Credentials?

All tax preparers who charge money for their tax services are required to register with the IRS (PTIN). However, just because someone is registered as a tax preparer doesn’t mean that they are good at it. There are companies that are known to higher seasonal workers that didn’t go to school for accounting and have little experience preparing taxes. If you want someone who with good professional training in tax and accounting then look for someone with a CPA license or a 4-year degree in accounting. CPAs are required to pass a rigorous test, must take continuing education and are bound by a set of professional ethics.

What is Their Experience?

The more experience a tax preparer has in tax situations similar to yours, the better the chances are that the tax return will be prepared correctly. Ask how many years the individual has been preparing taxes and make sure they are the one who will be preparing your return. A number of CPA firms will hand your work off to a lower level accountant. That isn’t necessarily a problem depending on the level of review, however, you should know this information.

Clarify Fees

A lot of tax preparers will quote an upfront estimate, and then when the time comes that fee is only for the most basic and simple tax return. Tax returns with multiple schedules or that require a lot of extra time may be far more expensive than you were lead to believe. Make sure you get clarity and ask the prepare to explain the specific fees that may apply to your situation

Comfort Level

You also want to know how comfortable you are going to feel with the person preparing your taxes. Tax preparers by necessity need access to a lot of your personal information, so if you don’t feel comfortable with the professionalism of the tax collector you aren’t going to feel comfortable given him all of that personal information.

If you need help preparing your 2020 taxes, Santa Barbara Tax & Accounting is here to help you. Call us to set up an appointment – let’s see what options we have to reduce your taxes before December 31 (i.e. making additional charitable deductions or harvesting capital gains/losses).