The tax code gets more complex every year. If you think it’s time to hang up the pencil and let experienced tax professionals do the work, you’ll be in good company. Here are 5 signs it may be time to find an accountant to prepare those forms for you.
5 Indicators That You Should Hire an Accountant
You own a business.
If you must do a business tax return as well as your individual return, it makes good sense to use a tax accountant. Business returns can be very complex, and any mistakes you make can carry over onto your personal return, doubling the headache of getting penalized or having to file an amended return.
You have more than one job.
In today’s ‘gig economy’ it’s common for people to have more than one job. You may have a full-time job plus a side gig, or you may piece together a number of side gigs to make your living. If so, you may be able to take deductions that employees cannot, and you may be able to claim additional expenses. A tax accountant will know all the right questions to ask.
You have recently retired/have other significant changes in income or assets.
If you’ve retired, your income may change dramatically and so will your tax burden. If you’ve reached age 70 ½, you have to begin taking distributions from your IRA or other retirement account. If you have received an inheritance, there may be tax consequences you should be aware of.
You have given a large gift.
If you have given a gift to another person that is larger than a certain amount ($14,000 in 2017) you have to file a gift tax return. No tax is due, but the return has to be filed because it will be factored into your estate after you pass away.
You don’t want to pay as much next year.
There are lots of legal ways to minimize the amount of income tax you must pay, but very few of them can be done in April to impact the taxes due from the year before. A tax accountant can help you plan for next year and beyond.
What You Should Keep in Mind
If you decide to engage a tax accountant to prepare your income tax return, there are two issues you should be aware of.
It will cost you.
A tax accountant, particularly a CPA, is not cheap. The National Society of Accountants estimated that in 2014, the average cost to have a professional prepare a Form 1040 with Schedule A (Itemized Deductions) and state income tax return was $273. While not an outrageous sum, it’s somewhat higher than the $40 or so you’d pay for tax preparation software.
You’ll need to be timely.
It may take some time to find a CPA that you like. Once you do, you’ll need to get your information to them promptly. You can sit at the dining room table with your shoebox of receipts at 11:00 pm on April 14th if you’re doing your own taxes, but a tax accountant will need a little more lead time.
Consider all these factors when deciding if you should hire a tax accountant to prepare your returns.
|Larry L. Bertsch, CPA & Associates, a top certified public accountants firm, has been offering quality accounting and tax preparation services to entire Las Vegas market since 2003.|