It’s tempting to rely on TurboTax or another tax software package when it comes time to file your taxes for the year. Doing it yourself seems more convenient and less expensive, but most filers will miss out on legitimate deductions unless they have a deep knowledge of tax law and its yearly changes. When deciding between hiring a professional CPA or using automated online software, your financial situation should be taken into consideration along with your level of knowledge of IRS guidelines.
If you are single, have a single employer and few or no investments, you may be a good candidate for using a low cost tax software. However, if you hold retirement accounts, are married, have a family, own a business, work freelance, receive an inheritance, bought or sold a home, or receive rental property income, you may want to hire an accountant for your peace of mind and to help you save money on taxes. Although TurboTax and other programs are user friendly, each has its own limitations. If your financial situation becomes complex, spending the additional money to hire a professional can save you a lot of money in the long run.
What is A CPA’s Duty?
CPAs assist in numerous accounting areas, including taxes, financial accounting and reporting, tax and accounting audits, and financial planning. Here are some of the most typical ways in which a CPA can assist you with your tax and financial needs:
- They give guidance and help with tax forms and filings. When dealing with tax issues that are particularly difficult or time consuming, it is generally beneficial to hire an expert.
- They notify you of your tax obligations and available tax deductions. Certified public accountants are experts at determining your taxable income, calculating deductions and credits, and reporting all of your income streams.
- They can communicate with the IRS on your behalf, including managing audits. CPAs are familiar with the questions the IRS may pose and can supply the needed information.
- They separate your personal taxes from your corporate taxes. Whether you want to organize a partnership, an LLC, or an S-corporation that will be taxed as a C-Corporation, a certified public accountant can help you structure it.
Benefits of Hiring a CPA for Tax Planning & Tax Preparation
Evaluating the Options For Your Retirement Account
When deciding how to save for retirement in a tax-efficient manner, it may be beneficial to consult with a CPA. This is particularly true when you consider the variety of investment options available for growing your retirement savings. You will want to utilize your retirement options to the fullest extent possible if you are self-employed and likely have even more choices than employees.
Adapting to a Tax Adjustment Caused by a Life Event
Life events like marriage and having children can have a major impact on your tax liability. You may need to modify your tax strategy when a major life event occurs. A CPA can also provide guidance during major personal transactions, such as the sale of your home or the purchase of a new home.
Helping Freelancers & Small Business Owners Make the Most of Tax Deductions
When you choose a CPA firm to prepare your taxes, they can work with you to optimize your tax deductions. If you freelance or are a small business owner, you are likely missing out on many tax deduction opportunities. A seasoned CPA possesses extensive tax knowledge. They will work with you to identify and optimize as many business deductions as allowed under the law. When you hire a professional accountant, they will actively look for ways to reduce your tax liability, allowing you to save money in the long run.
CPAs can also assist you in prioritizing your business objectives by performing administrative tasks such as budgeting, bookkeeping, financial accounting and reporting, tax planning, and tax preparation.
Dealing with Complicated Tax Matters More Efficiently
If you are a business owner, you may find yourself entangled in complex business and investment matters requiring a deep understanding of tax laws. A CPA is proficient in tax law and tax codes and will be able to advise you on even the most complex tax situations for your business. A CPA can quickly and easily complete tasks that would require an individual taxpayer hour of fruitless research in an attempt to find the correct information.
Should You Rely on Tax Software or a Tax Professional?
Online tax filing software like TurboTax can seem like a good option, but unless you have an extremely simple tax situation, the one-size-fits-all approach usually fails to maximize an individual’s potential return.
Need Professional Tax Preparation & Filing? Contact Us Today!
If you need an expert to help prepare and file your taxes, contact us at Steven Lissner & Company today. Our experienced tax professionals will handle your tax preparation and tax filing and assist with other tax-related matters. We’re proud to serve clients right here in our community of Mountain Lakes, as well as all across New Jersey, New York, and Pennsylvania. Call us today to learn more about our tax preparation and tax planning services.