Tips & Advice
Can a tax preparer be sued?
Yes, a tax preparer can be sued for malpractice if the plaintiff can demonstrate that they suffered damages due to a tax preparer’s failure to meet the minimum standards required by the IRS. A higher-than-wished-for tax bill is not usually justification. However, there may be just cause if the tax preparer made mistakes on a tax return that led to gross overpayment of tax, or if the tax preparer made mistakes on a client’s tax return that led to the client being audited or sanctioned. A tax preparer can also be sued for misappropriating the client’s funds.
What are the benefits of filing taxes electronically?
The benefits of filing taxes electronically are chiefly that the documents arrive faster to the IRS and state tax centers, and can be processed faster. Also, for those who are e-filing payments, you know the money is going immediately to the IRS or the state, and there is an electronic record—so no stress about a check being lost or a payment not recorded.
How much does it cost to have taxes filed professionally?
The cost to have taxes filed professionally ranges from about $150-$800, but the average cost for an individual is $250. The lowest cost is for someone filing a Form 1040 without itemized deductions. The highest cost is for corporate tax forms, which are largely for legitimate businesses with several employees.Many former 1099 contractors are switching to LLC or S-Corp status and therefore end up needing to file business taxes. Even individuals who are filing 1099s with itemized deductions and multiple clients might find themselves paying $500 to have their taxes professionally prepared because of the amount of detail work this requires from the tax preparer.
What documents are needed for filing taxes?
To files taxes you must provide all W2s and 1099s for the previous year, business-income records (for small business owners), investment-income records, rental-property income records, and documents showing social security and unemployment income. If you’ve settled a debt and received a document forgiving a certain amount, you should include that paperwork as well.
What is a certified tax preparer?
According to the IRS, a certified tax preparer is an authorized tax professional. The IRS assigns a Preparer Tax Identification Number (PTIN) to people who have attained this authorization.
There are different credentials under the PTIN umbrella.
Note: Specific practice rights of “Unlimited Representation Rights” and “Limited Representation” were redefined in 2016, to assign less-qualified preparers fewer responsibilities under “Limited Representation.”
- “Unlimited Representation Rights,” i.e., the power of representing clients on all tax-related issues
- This includes Enrolled Agents, who are licensed by the IRS, and CPAs, who are licensed by state boards of accountancy, the District of Columbia, and U.S. territories
- Attorneys licensed by state courts
- “Limited Representation” certification for seasonal or non-credentialed individuals who can prepare taxes only, but not represent clients to the IRS
Can a notary public refuse to notarize?
A notary public is required to refuse to notarize in cases where the signer doesn't meet certain qualifications for notarization. This would be the case if the signer isn't physically present for notarization, or if the signer cannot be properly identified. A notary must also refuse to notarize if the document doesn't meet certain qualifications. This would be the case if a document has missing pages or blank spaces that haven't been completed by the signer. A notary can also refuse to sign if there is a suspicion that the document is false or illegal, or if the signer refuses to pay the required fee.
However, a notary public cannot refuse to notarize based on bias regarding the signer’s nationality, religion, race, age, sexual preference, lifestyle, gender, or disabilities.
Can a notary public notarize across state lines?
A notary public is allowed to notarize across state lines. For example, if a document is created in California and the signer travels to New York, the law allows the document to be notarized by a notary operating out of New York. However, while a notary can sign and stamp documents that were created out of state, notaries cannot physically travel outside their state of commission to notarize a document. For example, a notary who has been commissioned in the state of New York is not legally allowed to provide notarization services while visiting California.
What is a notary public bond?
A notary public bond is a surety bond that protects those who are having their documents notarized. This bond is required by some states, and it provides a financial guarantee that protects signers in cases where the notary is guilty of misconduct or fraud. If fraud or misconduct has occurred, a notary public bond with reimburse signers up to the bond's limit. Notary public bonds do not shield the notary, and if the bond pays damages to the signer, the notary will have to reimburse the bonding company for the amount paid.
What is a notary public affidavit?
A notary public affidavit is a sworn or affirmed written and signed statement that has been witnessed by a notary. This is a legally binding document, and if you sign an affidavit that contains false information, you could be charged with perjury. When signing an affidavit, your signature must be witnessed by a notary or a public official who has the authority to administer oaths. A notary public affidavit must be signed and sealed by a notary.
What does it mean to have a document notarized?
Having a document notarized means that the identity of the person providing the signature has been confirmed by an impartial third party. Notarization also confirms that the signature was provided freely and willingly, and without any type of duress. Notarized documents may be identified by the notary's signature and seal.