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Hiring a tax preparer can give you some peace of mind that your taxes are being filed correctly. But even a pro can sometimes make a mistake. Depending on the error, you could end up getting a refund you’re not entitled to or paying more in taxes than you actually owe.

The good news is, there are ways to get your tax return back on track if an error was made. Keep reading to learn what steps you can take when you realize your tax preparer made a mistake.

Who Are Tax Preparers?

There are different types of tax return preparers, but typically, they’re enrolled agents, attorneys, or certified public accountants (CPAs). There is no professional credential that qualifies someone to be a tax preparer. However, they do need to have an IRS Preparer Tax Identification Number (PTIN) in order to help clients file their tax returns.

Because a tax preparer is dealing with your sensitive financial information, it’s important to do your due diligence before hiring one. Research potential tax preparers’ backgrounds and references, and if possible, ask for referrals from trusted friends and family members. It’s also a good idea to look for a tax preparer who specializes in the types of taxes you need help with, such as self-employed taxes.

Pros and Cons of Working With a Tax Preparer

Thinking about enlisting the help of a professional as you prepare for tax season? You may want to consider the advantages and disadvantages of working with a tax preparer.

Pros

•   Ample experience (if you hire the right professional)

•   Expert insight into potential tax credits and deductions

•   Peace of mind that your taxes are filed properly

Cons

•   May be more expensive than doing your own taxes

•   Mistakes can still happen

•   Less privacy

Another way to make getting ready for tax season easier is to gain a holistic picture of your financial life. A money tracker app like SoFi’s can allow you to track spending, set financial goals, and view all bank account balances in one place. You can also monitor credit scores.

Recommended: How Much Do I Have to Make to File Taxes?

Are Tax Preparers Worth It?

Whether or not a tax preparer is worth the money depends on a few different factors. These may include:

•   How much time it saves you. If you have complicated taxes or are concerned you might miss the tax filing deadline, you may find that an hour or so with a professional tax preparer is more efficient and therefore worth the cost.

•   The complexity of your taxes. People who only have one source of W-2 income, take the standard deduction, and have no investments may be able to easily file their taxes without the help of a tax preparer. However, a small business owner dealing with payroll or a freelancer with dozens of sources of income may find that hiring a tax preparer could save them a lot of headaches.

•   The tax preparer’s experience. An experienced, qualified tax preparer can ensure your returns are prepared correctly and perhaps even help you identify tax credits or deductions.

•   Cost. Some tax preparers charge the same or slightly more than the cost of purchasing tax preparation software, while others are on the more expensive side. Depending on your needs, hiring one may or may not be worth budgeting for.

Fixing Errors on Filed Returns

If you realize your tax preparer made an error on your filed tax return, all is not lost. You can amend it using Form 1040-X, Amended U.S. Individual Income Tax Return. Common errors include having the wrong information regarding income, credit, tax liability, filing status, or deductions.

It’s also possible to amend a return in order to claim an unused tax credit. Generally, mistakes on an income tax return need to be amended within three years (this includes extensions).

Am I Responsible If My Tax Preparer Makes a Mistake?

While it may seem like the professional tax preparer would be on the hook for any mistakes made on income taxes they help file, it’s the taxpayer who’s held responsible. However, the tax preparer can help make any necessary corrections.

What Happens If a Tax Preparer Messed Up Your Return

If you realize your tax preparer made a mistake (or multiple) on your income tax return, you need to file an amended return with the IRS. Ideally, the tax preparer would help with this process, but they aren’t required to do so.

What to Do If a Tax Preparer Messed Up

Mistakes happen. Here are the steps you can take to get things back in order in the event your tax preparer makes an error on your income tax return.

Make Sure It’s the Preparer’s Fault

Before you start pointing fingers at the tax preparer, make sure they’re the one who made the mistake. Tax preparers require a lot of detailed information so they can file an income tax return on your behalf, and it’s easy to give them the wrong information by mistake. Do some digging to see who’s really at fault and what to do if you’re missing tax documents.

Recommended: What to Do If You’re Missing Tax Documents

Check Your Contract

Once you’re certain the tax preparer made a mistake, take a look at the contract you signed with them. It should outline whether the preparer will file an amendment for you at no extra charge and what their liabilities are.

Contact the Preparer

The next step would be to contact the tax preparer to alert them of the mistake and to provide them with any related correspondence from the IRS.

Notify the IRS and Professional Organizations

If the mistake is substantial — and not your fault — you’ll need to convince the IRS of the tax preparer’s negligence. You may also want to outline any damages you’ve suffered as a result of the error. The IRS is then responsible for investigating who is responsible. If the tax preparer is at fault, this can result in their tax identification number being rescinded.

It’s also possible to report the tax preparer to a professional organization they belong to, like the American Bar Association or the American Institute of Certified Public Accountants.

Tell It to the Judge

Ideally, the tax preparer will help you remedy the mistake, and everyone can go on their merry way. However, if the error caused a lot of issues for you, you may choose to sue for negligence. Taking the issue to a judge is a last resort, but it’s an option if you want to file a standard professional malpractice complaint with your state court.

Recommended: Free Credit Score Monitoring

The Takeaway

Even the most qualified tax preparers can sometimes make a mistake. If a tax pro made an error on your tax return, all is not lost. The IRS allows you to fix errors on an income tax return, and in most cases, your tax preparer should be willing to help out. If you suspect the preparer was negligent when filing your return, you can report them to the IRS. As a last resort, you can even sue them (though hopefully it would never come to that).

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

Is a tax preparer liable for mistakes?

At the end of the day, even if the tax preparer is the one to make the mistake, the taxpayer is the one held liable by the IRS. That said, some contracts with tax payers do include taking responsibility for errors.

How much money will the IRS fine a tax preparer who has made a mistake filing a client’s taxes caused by lack of due diligence?

Simple mistakes are one thing, but if a professional tax preparer doesn’t follow tax rules, regulations, or laws, they can be penalized financially by the IRS. How much that fine is depends on different factors like how many violations occurred.

Can you report a tax preparer to the IRS?

Yes, it is possible to report a tax preparer to the IRS. It’s important to submit a detailed report to the IRS and to outline any damages suffered.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q125-041

If you fail to pay a debt, your creditor will do everything they can to you to pay them back. Eventually they may even send your debt to a collections agency that will get to work recovering the money you owe. The collections agency may hound you to pay your debt, potentially threatening to garnish your wages until it’s settled.

But what happens if you don’t believe you owe the debt in the first place? You may have already paid it off, and the collections agency did know. Or a scammer may have gotten hold of your personal information and used it to fraudulently open an account that’s now delinquent.

If you don’t believe a debt is yours, this guide can help you take steps to dispute a debt and win.

How to Dispute a Debt

When receiving calls about a debt that isn’t yours, your first step is to collect as much information about the debt as possible. Find out who is calling, the name of the company, the company address, and company phone number. At this point, don’t give out any personal information. Doing so could come back to bite you later, especially if you’re dealing with a scammer.

By law, collectors have to provide a letter with information on the debt and their contact information within five days of the initial call. Once you receive it, contact the original company to which you supposedly owe money to find out more about the debt.

While you’re at it, you may also want to find out what type of collector is calling. Is it in-house collections, a hired collections agency, or a debt buyer? In-house collections departments should have the most information at their disposal about the debt, while the others may have incomplete information, which could signal the potential for mistakes.

If the collector won’t give you information about themselves, it is a red flag that you may be dealing with a scammer.

What Is a Debt Dispute Letter, and How Do I Write One?

Once you’ve got the address of the collector, send a debt dispute letter within 30 days receiving the information. Fail to respond in this timeframe, and the collector can proceed as if the debt is valid.

Debt letters are not necessarily complicated to write. They may simply say that you’re writing about a collection on a debt you don’t think you owe. Ask the company to provide proof that you owe the debt in question and to stop contacting you if it can’t be proven. If there’s any other information you need that you haven’t gotten yet, you can ask for it at this point.

Keep a copy of the letter for yourself, and track the copy you send so you can be sure it was received. A dispute letter alone will sometimes stop the collections calls.

The Consumer Financial Protection Bureau (CFPB) provides a sample dispute letter that you can mail to collectors.

Can a Debt Collector Contact You If You Dispute the Debt?

Once they receive the letter, the collections agency has to stop contacting you until it sends you a debt validation letter that documents that you owe money.

With this letter in hand, contact the original creditor and ask them if they have any record that you’ve taken out a loan and are delinquent. If not, they may decide to stop pursuing the debt.

Regularly monitoring your credit score is one way to keep financial matters from slipping through the cracks. A money tracker app can also help. The SoFi app connects all of your accounts in one convenient dashboard. From there, you can see all your balances, spending breakdowns, and credit score monitoring, and get other valuable financial insights.

Know Your Rights Under FDCPA

The Fair Debt Collection Practices Act (FDCPA) is a federal statute that governs how debt collectors are allowed to act. There are certain things collectors are not allowed to do, including:

•   Collectors cannot call before 8:00 am or after 9:00 pm, and they are not permitted to call you at work if you’re not allowed to take those calls.

•   They are not allowed to harass you with threats of violence, profane language, or by calling repetitively.

•   They cannot present you with false information, including how much you owe and who is collecting the debt.

•   They cannot speak to anyone about your debt besides the original creditor, credit reporting agencies, and your lawyer. That said, they can contact others to try to find you as long as they don’t discuss the nature of your debt.

•   Collectors cannot engage in unfair practices, such as charging more than allowed by your state.

If a collector violates these rules, you may sue them in civil court, where you may win monetary compensation or they may be subject to fines.

Is There a Statute of Limitation on Debt?

Debts can exceed a statute of limitation, becoming too old to collect. Rules will vary by states, but collectors generally have three to six years. Once the statute of limitation is up, the debt becomes a “time-barred” debt. A collector can still try to collect, but they don’t have a legal standing to make you pay it.

When you contact a collector for the first time, be sure to find out when the debt was supposedly incurred. Contact your state attorney general’s office to find out what the statute of limitations is in your state to determine if the debt is time-barred.

What Not to Do When You’re in Debt

It is likely not fruitful to dispute debt that you do actually owe. If you are in debt, do what you can to pay it off, even when it’s been sent to a collector. Unpaid debt will damage your credit score, making it more difficult and expensive for you to seek credit in the future.

Keep on top of your debt with tools like a spending app, which helps you track how you spend and save each month and manage upcoming bills.

Ways to Remove Collections from Your Credit Report

If collections on a debt you don’t owe shows up on your credit report, you may dispute your credit report with the three major credit reporting bureaus: Equifax, TransUnion, and Experian.

You’ll need to send a dispute letter that includes your contact information, a list of mistakes with account numbers, an explanation of how the information is incorrect, a request to have the collections removed, and supporting information about how the dispute should be reported. Note that if information changes on your credit report, it’s possible your credit score may drop after a dispute.

If you pay off a debt and it’s no longer in collections, you may send a letter to the agency asking them to remove the collections from your credit report. The collector may remove the information from your report as a courtesy, though they don’t have to.

Recommended: Closing a Credit Card With a Balance

Check Your Credit Reports Regularly

It’s a good idea to check your credit report regularly. Make sure there are no errors on the report, and be on the lookout for evidence of credit card frauds or accounts that were opened fraudulently. You can receive a free credit report from each of the credit reporting bureaus once a week via AnnualCreditReport.com.

Recommended: Guide to Canceling a Credit Card Payment

The Takeaway

If collectors are asking you to pay up on a debt you don’t believe you owe, dispute it as soon as possible. In some cases, it may be a purchase or debt that slipped your mind, or it may be an error. If the debt is particularly difficult to prove or disprove, you may need to hire a lawyer who can help you settle the matter in court.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

How do you fight a collections agency and win?

If a collections agency is trying to collect a debt you don’t owe, your best course of action is to gather information about the debt and send a dispute letter immediately asking for debt validation. This is sometimes enough to stop the collections process. But if a debt is difficult to prove or disprove, you may need to hire an attorney.

Can I dispute a debt sold to a collections agency?

Yes, you can dispute a debt sold to a collections agency.

What is the best thing to say when disputing a collection?

A dispute letter should say that you’re writing about a debt you don’t owe. It should also ask that the collector prove the debt or cease contacting you.

Photo credit: iStock/PeopleImages

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q125-044

The best age to retire for longevity is different for everyone. It depends on many factors, such as your finances, your health, and what you want to do in retirement. Some workers may want to continue in their careers for as long as they can. That said, most people would like to retire when they are still healthy and active but financially secure enough to continue an energetic lifestyle. The younger the better, for many of us.

Here’s a look at how age affects your retirement — and things to consider when planning your retirement timeline.

How Your Age at Retirement Affects Retirement Savings Income

So you’re looking ahead to retirement and expect to have a significant nest egg. If you retire at 65, your retirement could last 25 years or more. But what if you retire earlier — say, at 55? Your savings will have to last that much longer, but you’ll also have less time to save up. Unless you plan ahead, even a decent sized nest egg might not stretch 35 years.

The age at which you decide to retire also affects your Social Security benefit. If you retire at 62, the earliest possible Social Security retirement age, your benefit will be significantly lower than if you wait. It can be as much as 30% lower than if you claim benefits at your full retirement age of 67.

The Average Retirement Age in America

The original rules for Social Security benefits assumed 65 as the common age for retirement. In 2022, the full retirement age was raised to 66 for those born between 1943 and 1959, and 67 for anyone born in 1960 or later.

The actual average age for retirement for men is 65 and 62 for women. Sixty-two is the earliest someone can receive Social Security, but the longer you wait, the greater your benefit will be (more on that below).

Recommended: Is $1 Million Enough to Retire at 55?

Factors Involved in the Ideal Retirement Age

The best time to stop working depends on your retirement savings, health benefits, and Social Security — factors that vary with age.

Savings

The best way to save for retirement is with a diversified portfolio that can average out your risk over time. Your strategy will depend on your risk tolerance, how long you have to save, and how much of your income you can afford to put away. A budgeting and spending app can help you monitor your income and expenses each month so that you know how much you should set aside.

The goal is to have enough saved up so you can stop working at your desired retirement age and have enough of a nest egg to fund the lifestyle you desire.

One rule of thumb recommends saving around 10 times your pre-retirement salary and living on 80 percent of your pre-retirement income. So if you earn $150,000 before you retire, you will need $120,000 a year to cover typical retirement expenses once you leave the workforce.

Most people have a pension plan or IRA as part of their portfolio. Here’s how age affects these savings vehicles.

Pension Plans and IRAs

Most pension plans impose an IRS penalty for withdrawing retirement funds “early,” which means before age 59 ½. You can delay your retirement as long as you like, but you must start required minimum distributions (RMDs) from retirement plans at a certain age as mandated by law, whether or not you’re retired.

In 2023, the starting age for RMDs was raised to 73 years. The exception is Roth IRAs: In 2024, holders of Roth IRAs and Designated Roth accounts will no longer be required to take RMDs during their lifetime.

Social Security

Social Security is another vital source of income for retirees. You can start to claim benefits at age 62, but at a reduced amount. People who retire at age 66 or 67 will receive full Social Security benefits. If you delay until age 70, you’ll receive even more.

A lot rides on your definition of retirement, too. You can semi-retire at age 65 (or earlier), work part-time, and collect Social Security benefits. However, if you earn more than the yearly earnings limit, your benefits will be reduced. If you are under full retirement age, the Social Security Administration will deduct $1 from your benefit payments for every $2 you earn above the annual limit. That limit was $23,400 for 2025.

Medicare

Individuals are eligible for Medicare, a government-sponsored health plan, at age 65. If you retire earlier, you will have to factor in the cost of out-of-pocket health insurance, which is expensive. The average national cost of health insurance is $456 per month, whereas the Medicare Part B premium is around $165 per month.

Health Benefits

The best age to retire for health is debatable. Going to work provides us with social connections, and mental and physical stimulation, all of which keep us healthy. Many people feel they lose their purpose and identity when they retire and even fall into depression. A recent paper published in the Journal of Economic Behavior & Organization found that early retirement may even accelerate cognitive decline in late adulthood.

What Is the Best Age to Retire?

Considering these factors, the ideal age to retire is different for everyone. It depends on your health, your finances, whether your home state taxes retirement income, and what you want to do in your retirement. Also, as people age, the decision of when to retire can change with their circumstances.

For now, choose a retirement date and start saving. The earlier you start, the more options and bigger nest egg you will have when the time comes.

What If You Don’t Have Enough Money by the Ideal Retirement Age?

Some guidelines recommend having 10 times your annual salary saved by age 67, the age at which people born after 1960 can retire with full Social Security benefits. But what if you fall behind these savings benchmarks?

If your savings fall short, you’ll have to play catch up. Make sure you are maximizing your 401(k) contributions and your employer match. Contribute to an IRA or a Roth IRA, too. And if you receive any windfalls, such as tax refunds or bonuses, put those funds toward your retirement.

Another strategy is to free up more cash for retirement savings by examining your budget and reducing expenses. Can you eat out less? Downsize your home, or sell other assets?

You could also continue working for a few additional years to increase your Social Security benefits. You may work part-time, accept a less demanding position with less pay, or do some consulting work.

Recommended: Average Salary in the US

The Takeaway

Just about everyone wants to retire when they are still healthy so they can enjoy their later years. When deciding what age to retire, consider what it will take to maintain the lifestyle that you want. Possible income streams include withdrawals from retirement accounts, Social Security benefits, and revenue from investment assets, such as rental property. Working part-time might be an option until you are ready to fully retire.

The decision of when to retire can change with your circumstances. The best plan is to set goals as soon as you can and start saving for retirement early. That way, you will have more options and a bigger nest egg when the time comes. And of course, budgeting wisely plays a role in that, too.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is the best age to retire for your health?

Some people thrive in retirement, and some people find themselves at a loss. Work provides social interaction and mental and physical stimulation, so retiring early may not be healthier if the result is a more sedentary and lonely lifestyle.

What is the best age to retire for Social Security benefits?

Retiring at age 70 would give you maximum Social Security benefits. According to the Social Security Administration, if you retire in 2025 at full retirement age, your maximum monthly benefit is about $4,018. However, if you retire early at age 62, your maximum benefit is $2,831. And if you put off retirement until age 70, your maximum benefit rises to $5,108.

What is the most popular age to take Social Security?

According to Mass Mutual, the median retirement age is 62. Full retirement age is 66 or 67, however, depending on the year you were born. Waiting until then can maximize your Social Security benefits.

Photo credit: iStock/Vladimir Vladimirov

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.