It is once again taxation season, and you may be struggling between whether you should use tax software or finally hire an accountant to do your busy work. As life goes on, taxes only get more complicated, and the penalties and costs can stack up if you are not critical of the details. What’s more, there are different tax preparers to choose from, and choosing the correct professional is vital. Enrolled agents are specialized in tax law and are given elite status by the IRS, while certified public accountants carry a wealth of qualifications to address a wide variety of accounting issues. There are certain situations that may call for the assistance of a tax or accounting professional, and if you’ve encountered any of the following in the past year, it’s a good idea to start researching a hire.
- You Just Got Married. As of December 31st of the previous year, your marital status determines what your new tax filing status should be. It may seem simple to do on your own, but hiring a tax professional early on can allow them to advise you on the best course of action for the present and the future. An accountant can tinker with your withholding amount and advise on filing status issues.
- You Just Got Divorced. Divorce is an important aspect to address when filing a tax return. A professional can help you navigate child support, facilitate who can claim the children as exemptions, whether you need to sign an IRS Form 8332, review legal fees, and much more. Make the divorce process easier on yourself by having an accountant go through the busy work.
- You Bought a New Home. Whenever you purchase new real estate, you should hire a professional. An accountant can gather all of the financial information on your home, including mortgages, property taxes, insurance premiums, and much more. He or she can then organize it into a comprehensive plan that will maximize your deductions. If you do not know much about tax law regarding property and real estate in your state or county, an accountant will educate you on the changing laws and how you can best navigate them.
- You Have a New Baby. Many people know that each dependent child presents a tax write-off every tax season. However, not everyone knows the ins and outs of preparing for their child’s future. Also, if you are planning to adopt, there is a whole host of other tax credits to consider that a tax professional can outline for you. From the moment he or she is born, a certified public accountant can help prepare a plan for you to ensure the future of your child’s success and financial well-being.
- You Own a Small Business. Unless you are already a tax expert, it is wise to hire a professional when you own a small business. This is especially critical in the first year, when you have already invested many funds into your venture and risk losing valuable returns. A tax professional can sit down with you and help you itemize all deductions and avoid any pitfalls that may create financial repercussions or penalties from the IRS. In fact, it may be wise to hire an accountant before you open your doors to the public. A certified public accountant can help you write your business plan to ensure success from the very beginning, and keep you from making the same mistakes other small businesses can make.
- You are Getting Audited. The IRS has increased the number of times a person gets audited within their lifetime. They want to ensure every square-inch is covered to prevent fraud, mistakes, or other tax-related issues. In addition, if you make over $200,000 a year, your odds of getting audited increase from .9% to 3.7%. This means that there will be a few times in your life when the IRS wants to see all of your taxes and accounts to make sure your tax payments have credibility. A tax preparer can prevent you the worry and energy of scrambling to get all of your documentation prepared. This is especially true for an individual that owes back taxes to the government. The IRS doesn’t take kindly to truant taxpayers that ignore notices, but responding to office notifications can be intimidating. The right accountant can help you determine how to settle your debt. The IRS takes monthly tax payments, but generally this process requires requests and online payment agreements that are best finagled with the help of a professional tax preparer.
Hiring an accountant for your taxes can alleviate stress and improve your financial health. Consider hiring an accounting professional to help streamline your finances and keep you out of hot water with the IRS in one fell swoop.
