With the end of the year approaching, many Americans will be collecting their receipts and preparing to file their tax returns. With the advent of new software, such as TurboTax, which can help you file your tax returns yourself, doing the job is now pretty easy for most people. But, that is not the case for everyone. There are many cases where you should consider hiring an accountant or tax professional to help you file your taxes.
Your Comfort Level. Deciding whether or not to file your own taxes is a very personal decision. A lot of your decision making should focus on your comfort level. Do you feel comfortable handling your own taxes? What if you make an mistake? Everyone’s situation is different and those specifics will determine your comfort level as well. Do you only have one W-2 from only one employer? You might feel more at ease then filing yourself. Are you a homeowner? Renting property instead of owning it makes it easier for completing the income tax returns yourself. Many people who own a home or vacation property choose to hire a professional to file their taxes because of the many deductions that can be claimed.
Complex Investments. When you have complex investments such as a partnership, a trust, extensive stock holdings, or claiming a lot of losses from investments, doing the work yourself may not be a great idea. It is always a good idea to make sure your work is complete and correct and does not require any amendments. Hiring an accountant to file your returns would help you achieve that.
You’re Horrible At Math. Even though the tax software now is incredible, a lot of people do not feel comfortable messing with the numbers and the forms. So, if you are not very fond of numbers in the first place, maybe it is a good idea to outsource the filing of your returns.
Back Taxes. You should consider hire help filing your taxes if you have to file back taxes or complicated amendments to your returns from previous years. Late returns that you must file for passing the due date without furnishing your returns should be taken to an accountant.
Getting Audited. Many professional tax preparers and accountants have a service that they will accompany you to a hearing if you get audited by the IRS. This service alone might be worth an accountant’s weight in gold. It is always great to have a knowledgeable person in your corner when doing battle with the government. Also, an accountant and tax professionals keep track of all the annual changes to the tax code.
I personally like to gauge how much money I am getting back in the form of a tax refund by computing the math myself with online filing software, and then I take all my documents to a professional who double checks my math. Despite being pretty good with numbers, even I have made mistakes in the past (luckily in my favor for more tax refund money). Hiring help makes the entire process so much easier. When you get your taxes right the first time, it saves you time and money from filing amendments to your returns and helps in keep you within compliance of the law. You should always seek the advice of a competent professional if you have any questions about your situation. Everyone’s situation is different, and you shouldn’t hesitate to ask for help if you need it.