Many taxpayers do their own (DIY) tax returns using commercially available tax software or online. If you spent more than a few hours on your taxes this year, it’s time to ask yourself if it makes sense to outsource this task to an accountant. Ask yourself these questions. Do I enjoy preparing my own taxes? Will I have time to gather documents and prepare my tax returns? Am I preparing my tax returns correctly or am I overpaying my taxes? Do I know what will trigger an audit?
The following 5 items may be indications that you may find it advantageous to have a counter.
1. You are making more money. The more money you make, the more likely you are to be audited. If your income is less than $ 200,000, your probability of being audited is approximately 0.9%. But if your income exceeds $ 200,000, your odds are 3.7% and if your income exceeds $ 1 million, it increases to 12.5%. Wouldn’t you rather have an accountant on your side if the IRS contacts you?
2. You own a business, are self-employed, or have rental properties. Most commercial and rental properties bear an expense called capital asset depreciation. Most people don’t know what a “capital asset” is or the rules for depreciation. A tax accountant will know how to handle capital assets and depreciation. A good tax accountant will help you minimize your taxes.
3. Anticipate the sale of shares or other capital assets. An accountant can help you plan for earnings to be taxed at a lower rate than your ordinary income and help you find other ways to minimize taxes, such as collecting tax losses.
Four. You want to take care of the future of your children or grandchildren. Accountants can be instrumental in helping you choose which vehicles to use for tax-deferred or tax-free savings, whether you’re considering a 529 plan for college savings or forming a trust for your children and grandchildren.
5. You are too busy to do your own taxes. Having an accountant prepare your returns will allow you to do your other tasks. You will still need to find time to gather your forms and other information.
These are some of the advantages of hiring a tax accountant.
Human touch. Like a reputable family doctor who knows your medical history, you can cultivate a relationship with an accountant so that you understand your family’s financial situation and your future goals. According to a certified public accountant in South Jordan, Utah, who has been preparing taxes for more than 20 years, “a specialist tax accountant can often recommend valuable tax savings that a software program simply cannot anticipate.” The value of this advice can certainly exceed the additional cost of consulting with a tax professional.
Available all year. Most accounting offices are open year-round and will be able to answer important questions that come up not only during tax season, but at other times of the year as well.
Save time. Taxpayers with complicated business and investment matters may have the ability to prepare their own taxes, but is it worth their time? A tax accountant is so familiar with the tax system that they can quickly and effortlessly complete tasks that could take taxpayers hours of research. For busy nontax professional taxpayers, your time can generally be better spent earning money in your area of expertise. Even if your tax situation is straightforward, hiring a tax accountant will save you time and stress.
The bottom line is this: the decision to do your taxes yourself with software or hire a tax accountant is a personal decision. Your comfort and knowledge of the tax code will be part of your decision, but the complexity of your finances should be the key determining factor. If you only have a few W2s and own a residence, then you can save hundreds of dollars by preparing your own tax returns, while those with business income, rental properties, and other investments will find that the expense of hiring an accountant will be worth it. the sorrow. mind and potential tax savings.
