For a lot of people filing taxes yourself it’s just fine, but there is a group of other individuals that use professional tax filers or CPAs. Why is that? Well, we are going to explain if you should file taxes yourself or if it’s time to use a professional, and what the differences are.
Filing Taxes Yourself: What to Know
There are many reasons why people file their taxes themselves. The main reason is due to the cost of hiring a professional. Still, surprisingly many people don’t realize that a professional isn’t much more expensive than using an online software program.
Other people like the control aspect of filing their taxes themselves. They can get their tax return completed earlier than using a professional and can avoid back-and-forth conversations.
There are a few drawbacks though. If you file taxes yourself using an online program, then the only one looking at your taxes is the software and yourself. This is where a professional comes in and can use their expertise. A professional is more likely to understand your whole tax picture versus software. After all, they do have a brain.
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When to Hire a Professional for Taxes
Frankly, there are even more reasons to hire a professional than to do your taxes yourself if you can. Here are just a few of the reasons why you might want to hire a CPA.
- It can save you time not having to file your own taxes.
- It could save you money depending on the situation.
- You have someone that will understand whole your tax.
- You can ask specific tax questions to a CPA.
- Professionals can tackle more complex tax situations.
- Professionals can also be engaged for tax advice.
- CPAs are not just for individual returns, but can also help with companies and partnerships
That’s just the tip of the iceberg. A good CPA is someone you can meet with during the year to improve your personal or business tax plan for the future. They are listeners, researchers and critical thinkers. To evaluate if you should hire a professional for your taxes, ask yourself the following questions:
- Am I stuck on my personal or business taxes?
- Do I have questions on my taxes?
- Do I feel the need to talk to a qualified professional?
- Am I looking to plan ahead for my taxes?
- Does my business require any tax decisions now or later?
- Do you want to free up your time instead of completing your return?
- Will you need an extension?
- Do you file in many states?
If you answered yes to any of these then it is probably time to hire a tax professional i.e. a CPA. Is a CPA going to be a bit less stressful and less time-demanding than doing your own taxes? Most likely. If money is an issue then think about getting your refund, if you expect one and paying your fees from it.
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Other Services Tax Professionals Can Provide
Once you make a relationship with a CPA, keep in mind, it’s not just taxes they can offer. They are so much more integral than that. You can work with them for tax planning, compilations, reviews, audit, and budgeting and some even offer valuation work or financial planning.
Unlike online tax software where you file yourself and are done, a CPA can offer a much wider range of services. For solopreneurs and businesses, a good CPA can be the support that your business needs. At the end of the day, hiring a CPA for taxes is like delegating a function of your business so you can spend more time generating sales.
Filing Taxes Yourself vs Professionals: The Verdict
Think of filing taxes yourself or using a professional as a question that you should use a flow chart on. If you check off any of the questions that would make you need a CPA, go with that route. If your tax return is simple and can be completed by the likes of Turbotax or TaxAct, pick a software and get going. It’s really up to you to decide if doing your own taxes is right for you.
Final Thoughts on When To Hire a Tax Professional
The last thing to keep in mind is that your tax situation can be dynamic. One year you might be using an online tax software and be just fine but the next year your tax situation could change dramatically and you might need a CPA. Just because you do your taxes yourself now, doesn’t mean you shouldn’t use a CPA in the future. Assess your tax situation and know when to get help. It will save you time, money and a headache.
