How to Know When to Use a Tax Professional
Every year the same dreaded feeling rolls around when it becomes time to do your personal taxes.
This annual ritual can often be time consuming and confusing, especially when it comes to the decision of whether to do your taxes yourself, or have them done by a professional.
There are many programs on the market that do a great job of helping a person with their individual taxes.
Much of this software can be purchased at your local electronics store or even downloaded off the Internet.
For many people this is the way to go.
If you know you are going to have the basics with gross income, interest income and take the standard deduction, then there is no reason why tax software wouldn't be more than sufficient for your situation.
Although many taxpayers' situations are not that simple, there is still software available to help.
The programs are great when you have deductions like mortgage or alimony payments and can even help if you inherited some money from a deceased family member.
So when is a good time to actually hire a tax professional? Many people become uncomfortable when they do not know how to proceed with large deductions or gains they incur during the year.
This can be a good time to seek help from a knowledgeable tax professional.
For instance, if an individual started a new business or expanded their business in the past year, there are many expenses they can deduct from their income in order to drop them to a lower tax bracket.
Also, tax professionals are a great help when it comes to long-term assets.
Certain assets will be taxed differently from others, and in the case of losses, a knowledgeable tax accountant will help a client deduct as much of the loss as possible.
Another difficult area to tackle by yourself is when you inherit property from a relative and how to account for that, especially if you sold it in the last year.
A tax firm will help you figure out what your basis in the property is and how much of a gain or loss you could take on the sale, which will change your taxable income and liability.
Another situation tax professionals are great at is when you run your business from your home.
They can help you deduct utilities and office expenses from your gross income, once again lowering your taxable income and in the end how much you pay to the government.
This annual ritual can often be time consuming and confusing, especially when it comes to the decision of whether to do your taxes yourself, or have them done by a professional.
There are many programs on the market that do a great job of helping a person with their individual taxes.
Much of this software can be purchased at your local electronics store or even downloaded off the Internet.
For many people this is the way to go.
If you know you are going to have the basics with gross income, interest income and take the standard deduction, then there is no reason why tax software wouldn't be more than sufficient for your situation.
Although many taxpayers' situations are not that simple, there is still software available to help.
The programs are great when you have deductions like mortgage or alimony payments and can even help if you inherited some money from a deceased family member.
So when is a good time to actually hire a tax professional? Many people become uncomfortable when they do not know how to proceed with large deductions or gains they incur during the year.
This can be a good time to seek help from a knowledgeable tax professional.
For instance, if an individual started a new business or expanded their business in the past year, there are many expenses they can deduct from their income in order to drop them to a lower tax bracket.
Also, tax professionals are a great help when it comes to long-term assets.
Certain assets will be taxed differently from others, and in the case of losses, a knowledgeable tax accountant will help a client deduct as much of the loss as possible.
Another difficult area to tackle by yourself is when you inherit property from a relative and how to account for that, especially if you sold it in the last year.
A tax firm will help you figure out what your basis in the property is and how much of a gain or loss you could take on the sale, which will change your taxable income and liability.
Another situation tax professionals are great at is when you run your business from your home.
They can help you deduct utilities and office expenses from your gross income, once again lowering your taxable income and in the end how much you pay to the government.
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