Prepare for Impact: Signs That You Need to Hire a Professional Tax Preparer
It’s better to be safe than sorry when it comes to tax preparation. Here are some signs you need to hire a professional tax preparer.
Tax season is coming, and it turns out that a whopping 52% of Americans feel stressed or dread about filing their taxes.
There’s no doubt that understanding tax code can be daunting. Furthermore, nobody wants to spend more on taxes than necessary. But when do you decide to hire a tax preparer to help you out?
Let’s get into what you need to know!
What To Expect When Hiring a Tax Preparer
Tax preparers can be incredibly helpful and supportive in navigating your taxes and personal financial situation.
Filling out your own return can be a time-consuming hassle. Moreover, it’s easy to gloss over certain sections or risk making mistakes. This is especially true if you have a complicated tax situation.
A bank product is a disbursement option for a client’s tax refund. In other words, tax preparers use the best software and research to ensure you receive the maximum bang for your buck.
Tax preparers are convenient. In the event of getting audited, they are required to help you organize necessary paperwork and documentation.
While the chances of getting audited are slim, you still want to be protected to make sure you can streamline your situation.
When hiring a tax preparer, you may have several meetings with him or her. It’s normal to sit down and review your tax situation. This includes combing through your income sources, deduction options, and even your long-term goals.
While it does cost money to hire, there’s a good chance you’ll end up saving more money in the short and long-term. That’s because the professionals can locate deductions you may have otherwise missed on your own.
Ideally, you shouldn’t wait until April to find your preparer. Consider starting your search in the previous fall. Most accountants are jam-packed with clients once winter and spring roll around.
By securing a professional early, you can also receive a ballpark of what your tax situation will look like come the next year.
Do you freelance or consult? Run your own business? If so, taxes can be a nightmare for the self-employed individual.
Self-employment refers to any employee who receives income outside of the traditional W2. That means you aren’t getting your taxes withheld from your pay. In other words, you need to report all your income come tax season.
You’re responsible for paying federal income taxes and self-employment taxes.
That said, you’re also responsible for identifying all the tax deductions you qualify for in a given year. This can include everything from your home office to equipment to marketing supplies.
The deduction process can get complicated, and that’s where a tax preparer comes in. The professional can help you decipher what does and does not qualify. Furthermore, they can provide you with the best tips for lowering your taxable income throughout the year.
You Buy Or Sell Property
Real estate can be one of the most lucrative financial investments you can make. However, it can also be one of the most complicated when it comes to taxes.
Whether you bought your personal home or you’ve become a landlord, the tax strategizing can be challenging to understand.
Tax preparers can help you claim the right expenses. They can also help you take advantage of certain deductions you may not already know about.
You Are A Heavy Investor
Are you a pro in the stock market? Or, on the other hand, have you lost a lot of money in the stock market?
Either way, the taxes associated with multiple investments can be confusing. You need to sort out different rules about everything from capital gains to tax loss harvesting.
Furthermore, there are other implications to consider if you use tax-advantaged accounts. These can include 401(k) accounts, ROTH IRA accounts, and health savings accounts.
You Recently Inherited Money
Inheritances can evoke a variety of intense feelings. Maybe you received a surprise windfall you didn’t anticipate. Maybe it was planned, but now you’re dealing with the sudden death of someone important to you.
That said, many people struggle to manage their inheritance. Even if they have the best intentions, it’s easy to ‘blow through it’ quickly without thinking about the repercussions.
The professionals can help you plan out the tax details regarding your inheritance. The risk of underpaying can devastate you financially. A tax preparer will fine-comb all the details and make sure that you are able to use your money to its fullest potential.
You Want To Provide a Monetary Gift
Like inheritances, monetary gifts or charitable donations have tax implications. Your tax preparer will guide you in how to best provide this gift without an extraneous tax problem.
Sometimes, this requires just a quick consultation. That said, it can be worth the peace of mind, especially if you anticipate donating regularly.
You Live Or Work In Multiple States
Do you live in one state and work in another? Or have you moved to a new state recently? If so, your tax situation can quickly become confusing.
Fortunately, a tax preparer can assist you with navigating the various states’ tax rules and sort out potential residency issues.
Final Thoughts on Hiring a Tax Preparer
Even if the thought of taxes evokes a sense of dread, they’re an inevitable part of living in modern society. After all, they say death and taxes are the only two guarantees!
A tax preparer can handle your situation with ease. No more scratching your head trying to understand complicated laws,
Are you interested in learning more about your taxes? Click here to review the basics!