3 Reasons To Hire An Accountant To Prepare Your Taxes
During the past decade, it has become commonplace for people to prepare their own income tax returns. Not only can it be much cheaper to do your own taxes, it has also become easier with the help of various free, and legitimate, tax preparation programs online. However, there are times when you aren't better off doing your taxes on your own. Here are three reasons to hire an accountant to prepare your taxes.
1. Your income is from self-employment.
When your wages come from regular employment, you are given a W-2 from your employer that details how much you earned and how much you paid out in taxes, to retirement accounts, etc. However, if you are self-employed, you won't have such a document.
Hopefully, you have kept detailed records about how much you earned each month, how much you paid for health insurance, if you contributed to a 401(k) account, and how much you sent to the IRS each quarter for taxes. Without all of this documentation, filing your taxes can be virtually impossible.
An accountant can help you go through all of your documentation to find what is relevant and what isn't. A good accountant can also find tax breaks for you that you likely wouldn't be able to find for yourself. Those tax breaks can be the difference between owing the IRS more money for your self-employed income and actually getting a refund.
2. You think you would benefit more from itemizing your deductions.
Most people take the standard deduction when they file their income taxes. Even if they try to itemize their deductions, the tax preparation software will usually determine the standard deduction is better. If you think your itemized deductions should give you a bigger tax break, then have an accountant look at your return.
It could be that you have more deductions that you can itemize and get the better tax break. Conversely, the accountant could find that you are including things in your deductions that you shouldn't and possibly save you from being flagged for an audit.
3. You have a lot of investments and assets.
Most people don't have much in the way of investments or assets, other than paying into a 401(k) and owning a home. However, if you have a lot of investments and own a lot of property, it can make filing your taxes a more difficult task. Your tax accountant can determine how your investment income should be classified on your tax return, which can help reduce the amount of taxes you owe on it.
For more information about working with a tax preparer, contact a company like Knowledge Integration Solutions.