You no longer need the 1040 EZ tax form. You are self-employed, or you are earning a substantial income from various locations. You have deductions to consider and other factors, like home ownership, stocks and bonds, and property, that influence your taxes. Now maybe a good time to stop filing taxes on your own and hire a CPA. Here are seven reasons you should consider.
1. Tax Law Is Complicated
State, local, and federal tax authorities all have their own rules. These rules are constantly updated and amended. An accountant stays abreast of these changes, so they can make decisions that are in harmony with changing laws and that align with your personal situation.
2. You Started Your Own Business
From a tax perspective, being self-employed is an entirely different beast than working for someone else. You have your home office and any other properties that you might be using to run your business. Now, you have to keep track of expenses, including travel, Internet connection, and the purchase of new equipment. There are several tax advantages to having a small business, but you need an accountant to help you navigate the complicated world of tax write-offs.
3. You Hate Math
CPAs have been trained to do the math. They have passed a rigorous CPA exam preparation. They understand the math equations that are used to get your taxes right. What is eligible for interest? How much money do you have in your bank accounts? How does all of this information relate to your taxes? A qualified CPA is the type of person who enjoys math, understands math, and can do tax-related math equations accurately. They are better at understanding math than a person who hates it.
4. You Have Multiple Side Hustles
You may have your permanent employment, but you also have a couple of rental properties. Or maybe you have a side business. It’s great to have multiple streams of income. But it makes your taxes a lot more complicated. There may be a lot of nontraditional or additional tax savings that you qualify for. It would help if you had a tax professional to show them to you.
5. Hiring a Professional Saves Time
You would not try to fix your car if you are not a mechanic. You know that going on YouTube, looking at some tutorials, and trying to figure out how to repair your vehicle will take a lot of time and energy. The same thing is true when it comes to your taxes. Having a professional do your taxes saves you time, prevents errors, and has the potential to save you a ton of money.
6. Plan Year-Round for Taxes
If you are like many people, you put off anything tax-related until close to the tax payment deadline. On the other hand, a tax professional is constantly thinking about your financial situation and your taxes. They are constantly there to offer you options that can help you lower your tax liability throughout the year. This gives you peace of mind knowing that there is a professional who is constantly monitoring your financial situation and will help you avoid mistakes that will increase your taxes.
7. Online Software Can’t Help You When There Is Audit
Few things can be as terrifying as being told that the IRS is auditing you. You know that an audit could mean loss of money, fees, and even criminal penalties. As soon as you get the notice, you wonder if you made a mistake or accidentally omitted something. The online software you used promises to be thorough, but it can’t help you during an audit. Conversely, when working with a tax professional, you know that your taxes were prepared accurately. If there are any questions, there is a real person who can answer questions and assist you during an audit.
If you hire a tax professional, gather and organize your records for them. It is better to set up a system where you can continually scan receipts and other pertinent information throughout the year. This will make your life and the life of your CPA easier.