Can different Tax Preperation places get you different amounts back on your taxes?

Question

How is this so! I would think there is going to be a set amount that you are going to get back if you give them the exact information. H&R Block, Jackson Hewitt companies like that

Answer 1

YES it is TRUE!

First off, a lot of preparers can fill out a TRUE and ACCURATE tax return. One that meets all of the laws correctly.

But by failing to take advantage of ALL the deductions allowed, they may have caused you to pay to much in tax.

Even Tax-in-a-box has this problem. In order to make sure their "accuracy guarantee" doesn't cost them money, they have to be very conservative in gray areas of the law.

A good tax preparer will take every legal deduction, but no more. You also have to watch out for overly aggressive preparers who take the position of "if the IRS don't catch it, we'll put it down anyway".

We offer a challenge to ALL taxpayers that we will review their returns FOR FREE to ensure you really pay the least amount of tax. Since I cannot advertise here, if you wish information, you can click my picture and send me an email.

There is a difference between a CORRECT tax return and the MOST EFFICIENT tax return.

Tax Advisor

Answer 2

There are rules (laws) that say what you can deduct. If your return is fairly straightforward, anyone doing it should come up with the same amount unless one of them messes up.

If you have a complicated business, it's possible that there are some areas where the tax code is gray - one preparer might take a certain deduction, one might not, a third might request a ruling on it from the IRS.

But if you're talking a personal return, almost all of them are straightforward enough that any knowledgeable preparer should come up with the same answers as any other one. Some tax prep firms hire temporary help just for the tax season and give them minimal or spotty training. Some of these people are not able to do a competent job of preparing taxes, and make mistakes on areas like your filing status and who is allowed as a dependent.

Answer 3

That is a very good question but I have seen several studies where different preparers come up with different answers. This usually happens on complex returns.

The biggest refund is not always the correct one. When preparing a complex return there are often grey areas that a preparer must decide how agressive to be and if there is adequate support for an agressive position. An example, of this would be if there are court cases that support your position but the IRS has not been allowing something.

Other times it is a matter of the best place to put things. For instance, tax prep fees are deductible as an itemized deduction but if you have a sole proprietorship you get a much better benefit by moving it to Sch C where it not only reduces income taxes but also self-employment taxes.

If you use H&R Block or other service, I would look for someone with over 10 years experience (good luck) and be loyal to them. The advantage of a CPA is that they have additional standards that they are held to by their profession. That is not to say that some of them aren't bad but they risk their CPA license if they really mess up.

Answer 4

Given the exact same information given to two different companies, you should get the same return. However, if you do not have everything spelled out in black & white and you go through an interview process with questions about Uniforms expense, telephone expense and such your return will depend on which captured the most deductions for you and/or which missed something.

Answer 5

Absolutely! It's due to preparer knowledge or lack there of. Take it to a professional. Find a great tax preparer and stick with them!

Answer 6

yes, Jackson Hewitt and H& R only get you the bare minimum