For most people, taxes are fairly straight forward, and with the advent of user-friendly tax software like TurboTax or HR Block Online, most people can do their taxes themselves without a hiccup. There are, however, times when you may want to enlist the help of a CPA. Here’s when you might want to ditch the tax software and hire a professional accountant:
1.Major Life Changes
When someone goes through a major life change, their tax situation can change drastically. Whether it’s marriage, a birth, an adoption, a new job or even a move, there are a variety of things that can impact how an individual or couple files their federal and state taxes. While many of these life changes don’t make filing incredibly difficult, it can be very easy to miss deductions and, in turn, hundreds of dollars in refunds.
Whether working from home or heading a business, those who are recently self-employed should use an accountant for at least their first filing. An accountant can provide advice on incorporating, which business expenses can be deducted, and which expenses are the responsibility of the business owner. Hiring an accountant can help to ensure that the correct articles, amendments and forms are filled out and filed the right way.
Speaking of deductions, people who have multiple deductions may find the knowledge of a professional CPA helpful. If you are married, have dependents, go to school, give to charity and have stock options, for example, you can overlook a deduction or two quite easily. While some people benefit from taking a standardized deduction, others benefit greatly from itemizing deductions; an accountant can tell you which group you fall into.
There are people who are transferred overseas to perform jobs for their companies. These transfers are wrought with rules and laws when it comes to taxation. In the cases of people who are conducting work for their companies on another continent, it’s always better to hire a professional accountant at tax time. It’s not uncommon for professionals to be double-taxed when they attempt to complete their own taxes in these situations.
Whether you’ve reached the age of retirement or pulled out of your retirement early, there are laws that you may not be aware of. For example, the IRS will typically take ten percent off of the top, and expect you to pay another ten percent come tax season. If you aren’t prepared for this, you can end up owing thousands of dollars to the government. If you are planning to retire, or are withdrawing money from your account, an accountant can make you aware of the tax ramifications of your decision.
Most people don’t need the assistance of a CPA, but for those times when you do, you can save yourself tons of money, far more than you would pay in fees. Are there other situations when you’ve hired a CPA and gotten good, money-saving advice? Let us know in the comments below.
About the Author: Tara Daines writes for finance blogs. Like numbers? If you’re interested in pursuing a degree in accounting, check out the program at online.nec.edu.