Is it time to hire an accountant to prepare your tax returns?

Many taxpayers do their own (DIY) tax returns using commercially available or online tax software. If you’ve 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 tax returns? Am I preparing 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 having an accountant may be to your advantage.

1. You are making more money. The more money you make, the more likely your chances of being audited increase. If your income is less than $200,000, then your chance of being audited is about 0.9%. But if your income is over $200,000, your odds are 3.7% and if your income is over $1 million, they increase to 12.5%. Wouldn’t you rather have an accountant on your side if the IRS contacts you?

two. You own a business, are self-employed, or have rental properties. Most commercial and rental properties have an expense called capital equipment depreciation. Most people don’t know what a “capital asset” is or the depreciation rules. A tax accountant will know how to handle capital assets and depreciation. A good tax accountant will help you minimize your taxes.

3. Anticipates the sale of shares or other capital assets. An accountant can help you plan to have the gain taxed at a lower rate than your ordinary income and help you find other ways to minimize taxes, such as tax loss collection.

Four. You want to provide for 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 to save for college or setting up a trust for your children and grandchildren.

5. He’s too busy to do his own taxes. Having an accountant prepare your returns will allow you to perform your other duties. 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 good relationship with an accountant so that he or she understands your family’s financial situation and your future goals. According to a CPA in South Jordan, Utah, who has been preparing taxes for more than 20 years, “a tax accountant can often recommend valuable tax savings that a software program simply can’t anticipate.” The value of this advice can certainly outweigh 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 any other time 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 your time? A tax accountant is so familiar with the tax system that he can quickly and effortlessly complete tasks that can take taxpayers hours of research. For busy taxpayers who are not tax professionals, your time can generally be better spent making money in your area of ​​expertise. Even if your tax situation is simple, 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, 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 cost of hiring an accountant is worth the cost. grief. mind and potential tax savings.