Updated: Oct 7, 2022
The last thing any trucker wants to think about is filing their taxes or wondering if they have found a good tax preparer who knows specifically about trucking taxes. But it’s better to conduct this search as early as possible. The closer you get to tax day, the harder it is to find a quality tax preparer. The following are various points to consider when choosing a tax preparer for truckers:
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Preparer Credentials and Ethics
If you own a trucking business, it is recommended you hire a tax preparer who can handle complex tax issues and understands trucking taxes. A firm that hires tax professionals who are Enrolled Agents (EA) and Certified Public Accountants (CPA) not only addresses these issues, but has unlimited representation before the IRS. This is very beneficial in the event of an audit or collection proceedings.
EAs and CPAs must not only pass rigorous testing requirements to achieve their designations but they must regularly complete a required number of continuing professional education hours to maintain these designations. Because these tax professionals are regulated, it is easy to verify if they have a questionable history by checking with the IRS Office of Enrollment for EAs, and the state board of accountancy for CPAs.
Unenrolled preparers often have limited training and are allowed limited representation on behalf of their clients in IRS proceedings. Furthermore, without regulation, it may be difficult to check their background history.
PTINS and E-filing
A paid preparer must have a Preparer Tax Identification Number (PTIN) and if they prepare and file more than 10 returns for clients they must file electronically. The client copy of the tax return should show the preparer's name and PTIN in the signature area of page two of the Form 1040. Never agree to do business with a tax preparer who does not provide this information and/or refuses to provide their clients with copies of their tax returns.
Signing the Tax Return
In the height of a busy tax season, it is easy to make mistakes. To ensure accuracy, tax firms will use a double check process where tax returns are prepared by tax accountants and then reviewed by a senior tax accountant. The senior tax accountant handles the final review of the tax return and signing of the tax return. An experienced senior tax accountant will then discuss the tax return results with their client and make sure the client is comfortable with the numbers on the return prior to asking the client to sign it. Avoid tax preparers who do not enlist a double check process and refuse to discuss the tax return results with their clients or ask their clients to sign a blank tax return.
Records and Documentation
Good tax preparers will ask for all your W-2, 1099 and 1098 forms as well as other records and receipts to verify income, expenses and credits. Preparers who are willing to e-file returns using paystubs in place of W-2s are in direct violation of IRS rules and regulations.
Because the IRS and most States conduct audits and send letters of inquiry throughout the year, it is best to work with a preparer who maintains office hours beyond the filing deadline so they are available to answer your questions or assist with any tax return correspondence.
Instead of asking a preparer what their fees are, ask how they determine their fees. For taxpayers with more complex returns that require several forms, it is normally better to select a firm that charges a set fee for the type of return (1040, 1065, 1120S, 1120), rather than one that charges by form. The reason is because this can be rather costly.
Unfortunately, the tax preparer industry has not remained immune from the ever-increasing problem of security breaches. Never hesitate to ask a preparer how they safeguard client confidentiality in the form of physical and electronic security of their clients' information and records. If the answer is not to your satisfaction then walk away.
Hire a Tax Preparer for Truckers
If you need help managing your taxes, consider hiring ATBS to help you out. ATBS has been in the industry for more than 20 years and we are experts in trucking taxes. We offer a variety of services including accounting, bookkeeping, and tax preparation, specifically for truck drivers. We also offer unlimited business consulting for our RumbleStrip Professional clients. ATBS just recently launched the ATBS Mobile App, which makes working with us even easier! If you’d like to learn more about ATBS services or want to get started today, give us a call at 866-920-2827.