Five Reasons to Use a CPA to File Your Taxes
You've probably have come across commercials advertising commercial tax software companies that offer platforms where you can cheaply file your own tax return. As accountants, we support anything that saves you from needlessly spending your hard-earned money.
Sometimes, filing your own tax return is the best value for many taxpayers.
If you and your spouse are a W-2 wage earner, or a retiree with only a social security check, oftentimes your tax return will have minimal complexity. Basically, "You've got this!"
However, as we have seen countless times over the years, as people progress into their working careers, they get married, have children, and/or start a business. Then, suddenly, you get into tax situations that have you feeling that you're in over your head. Because of situations like this, here are the five reasons to use a CPA to File Your Taxes:
It’s taking you significantly more time to file your returns.
Are you up all night working on your tax returns? Did you have to miss your Tuesday afternoon pickleball game? These are probably indications that you should have a CPA prepare your taxes. Your time is valuable, and because filing your own taxes can be a frustrating and daunting task, we would recommend turning it over to a CPA.
You own a business
Business owners typically have more complicated tax returns and greatly benefit from a CPA preparing their tax returns. Besides, there is a chance that you could miss out on valuable deductions or unintentionally increase your chances of an IRS audit, which nobody wants. According to Buddy McLean, Partner in our Lumberton office with over 30 years of tax experience, “Many times, you will hear misinformation out in the public about what you can or cannot do from a tax perspective. It’s easy to fall prey to misinformation.” A CPA can help guide you through the “noise”.
You have income in multiple states
Most states' tax returns vary greatly. Different tax software can also differ on how accurately they manage these inconsistencies. Also, recent history tells us that tax legislation isn’t finalized until February...when we are already into tax season! Some of these changes create “grey areas” and you're best-served letting a professional navigate these waters with you. States also will often require apportionment calculations if you receive income in more than one state, increasing the complexity that much more.
You are selling a property
Depending on the specific situation, any time you sell a property we recommend working with a CPA. The main reason is the tax consequences are typically significant depending on the taxable gain or loss triggered by the sell.
Establish a relationship with a CPA…before you need to.
Much of the value of working with a CPA is the relationship cultivated. A long-time relationship can develop and the CPA can begin to know your individual situation as well as you do. This knowledge can be extremely valuable when certain situations arise in your life that require you to bounce ideas off sometime, for example. And who better to bounce ideas off of than a CPA?
This information is courtesy of S. Preston Douglas & Associates, LLP. In business for over 80 years and with three office locations, SPD&A offers a wide array of individual and business services in both North and South Carolina. You can contact us directly at (910) 739-7523.
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