If there is a single yearly event that every adult person can relate to, it’s having to file your taxes. Once you have become an adult, there is no way to avoid having to deal with this phase of adulting in some capacity!
And filing your taxes is intimidating for a lot of us. There are tax laws, deductions, paperwork, audits, and the ever-present IRS looking to drop the hammer if you ever make a mistake.
Obviously, there are tools to help. The ability to e-file your taxes has allowed tax assistant software (think TurboTax and the like) to give people an easier way to do their taxes. Instead of having to read booklets of information to determine what you need to fill out, the software simply asks you questions and gives easy-to-fill blanks.
But here’s the deal: sometimes this software isn’t enough. There are times you need to go to a tax professional, like a Certified Public Accountant (a.k.a. a CPA), for help. So when do you need to call in the big guns?
Here are some situations when you could use a CPA’s help…
If You’re Doing Your Taxes for the First Time
That first time doing your taxes is scary. Many schools don’t prepare students on how to file taxes and what they need to have prepared. Even more problematic, college students having to file for the first time might have tax-related circumstances they don’t know about.
This can include:
- Student Loans
- Being claimed by a parent as a dependent
- Education tax credits
When filing taxes for the first time, it’s worthwhile to meet with a professional, even if it’s just a consultation. A CPA or a tax accountant can fill in the knowledge gaps you might have, and provide tips on doing your taxes the right way.
If you do choose to file your taxes with a professional, have them walk you through the different steps. Just because somebody else is doing the work, understanding what to do can give you an edge if you need to file by yourself in the future.
If You Have A Business
Filing taxes for a business is a different beast from filing for yourself. It’s a much more involved process, requiring much more paperwork, different tax codes, and can differ depending on what kind of business you are running.
Hiring a tax accountant could assist with those differences and help keep you on the good side of the IRS. Businesses have a wide range of deductions normal people don’t qualify for, but you have to learn about them.
Another benefit of working with an accountant, especially for the long term, is that they could help keep your many required records organized and prepared for tax season. If you don’t want to hire an accountant for year-round help, keep track and organize important files yourself, so you aren’t scrambling when it comes time to file.
When You Don’t Have the Time
Doing your taxes takes time, and sometimes, you might just be too busy to bother with it. To file your taxes, an accountant just needs copies of important tax information (like W-2s), investment forms (like 1099s), student loan info, and personal information (like your SSN or a driver’s license).
Now, there is a difference between not having the time to do your taxes and doing them at the last minute. Many tax accountants get busier and busier as the submission deadline draws closer. If you wait for the day before, you won’t be able to get help. Plan ahead if you want to get help.
After Big Life Events
Some life events can have a major impact on your taxes. For example, the birth of a child, getting married and filing together, buying a home, or moving are all deductions you might not be used to getting.
Consulting or working with a tax accountant can help you through getting the most out of these kinds of deductions. Some, like birthing or adopting a child, are automatic deductions, while buying a home will only have an impact if you have other tax write offs.
Picking the Right Solution
Don’t feel rotten for seeking help with your taxes! Tax accountants aren’t just for the rich and famous. They can help everybody navigate local and national tax laws, and help you get the biggest return you can.
But, if it’s not your first rodeo, you feel confident in your abilities and–most importantly–you have the time, go ahead and file your own taxes. Let us know how it goes and the most helpful thing you learn in the process!