Who needs an accountant for their tax return?
If you own a business, hiring an accountant is crucial. A professional can not only help you take advantage of all tax breaks available for business owners, but can also prepare other IRS forms that are required for running your business. Tax deductions such as business travel, vehicle expenses, and home office can flag your business for audits, so it is important to be diligent and detailed when reporting these expenses on your return. A professional will ensure that no mistakes are made so you know that you have maximum deductions with maximum peace of mind. Running a business come tax-time comes along with filing required forms such as 1099s and W2s, which a professional can handle for you, saving you time and energy. Being self-employed also comes with self-employment taxes. You may also need to make quarterly estimated tax payments, which a professional can assist with.
Those Buying or Selling Their Home
Buying a home comes with expenses that are tax-deductible, such as interest on your mortgage, points on your loan, and real estate taxes. These deductions can be difficult to navigate due to the need to itemize versus taking the standard deduction. New homebuyers will also have a new tax form to deal with - Form 1098 (Mortgage Interest Statement) - which adds an additional layer to filing your return, so having a professional on hand to take care of this for you lessens your tax burden. If you are selling a home, there are capital gain and loss implications to be aware of, as well as Form 1099-S (Proceeds From Real Estate Transactions). Some costs during the closing can also increase the basis of your home and reduce your capital income, which a tax accountant can help you navigate correctly.
Those Selling Stocks, Businesses, or Other Assets
Selling stocks, bonds, and other capital asset transactions during the year can bring a slew of tax issues such as tracking capital gains or losses. Where you report these gains and losses on your return varies depending on the type of asset, amount, and how long you have owned it, so a professional can make sure you are utilizing the correct locations. Along with reporting issues, it is important to note that your tax bracket can increase based on stock market earnings and you may also have to worry about any dividends, which are taxed at a different rate than your regular income.
Those Claiming Dependents
If you are claiming dependents, such as children, on your tax return, a professional will ensure that you are utilizing the correct tax credits that you are owed. New tax laws have changed tax credits for dependents such as the child tax credit, so your savings could be more. An accountant will also help you determine who qualifies as a dependent for your tax return and avoid mistakes in filing that can cause delays and IRS issues. Some people cannot be claimed as a dependent, and there are certain IRS rules and requirements regarding filing and exemptions with dependents that can be complicated to navigate, so consulting professional advice is a smart idea when looking to claim and qualify exemptions on your tax return.
Those Who Have Not Paid Past Owed Taxes
If you owe back taxes, a tax accountant can help you take control of the situation and file your returns from years past as well as your current return. Tax professionals can offer insight into any potential actions that are being taken against you by the IRS and help you navigate your situation. They will explain the process in detail and certain qualified professionals can help represent you to the IRS if need be and help you negotiate a payment plan to pay off any tax debt owed.
Those Who Have Gone Through a Major Life Change
Big changes in your life can bring big changes in your tax situation. Marriage, divorce, a new job, having children, receiving an inheritance, and retirement are all reasons why you should be looking for an accountant this tax season. These large life changes have effects on your financial situation and thus could bring a headache when it’s time to file. An accountant will help you file your taxes correctly and offer crucial tax planning advice to take advantage of any newly available deductions and make sure that there are no errors in your new return.
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Why should I hire a tax professional?
Get a Bigger Return
Without using a professional, you may be missing out on valuable deductions that you may not even realize. An accountant can help you maximize all of the savings that you can get on your tax return. Professionals know tax secrets and all have insights into how to get the most out of deductions and can see opportunities for more savings that you may miss. The tax preparation fee itself may even be deductible! Take advantage of their knowledge so that you can take advantage of more savings.
Get Help With Audits
An IRS audit can be a stressful, nerve-wracking experience. If you are subject to an official audit, a tax accountant can guide you through the audit process and then ensure that your business is not breaking tax laws post-audit. Professionals know the ins and outs of US tax laws, codes, and regulations so that you don't have to. These complicated rules are ever-changing and professionals keep up to date with the latest year’s iterations. Some tax accountants also offer audit insurance which helps cover fees in case your business is audited by the IRS.
Save Valuable Time & Avoid Frustration
Filing taxes can be a time-consuming process. The IRS estimates that business taxpayers spend about 24 total hours preparing their yearly tax returns, and that number can grow even higher if you have a complex return. By simply providing information to a professional, an accountant can take the stress out of your tax season. It is also worth weighing the cost of your own time that you would spend preparing your own taxes versus the cost of hiring an accountant. Most of the time, hiring an accountant winds up being cost-effective in finding more deductions for your return and freeing up more of your time.
Have a Professional Ally Year-Round
Working with a professional opens the doorway to a year-round partnership that can benefit you and your business for the long haul. An accountant is a great tool to have for your business. You can refer to your new professional companion for financial questions, advice, and future years’ tax filing. They will also keep a record of your taxes for next year, allowing you peace of mind that your information is in good hands when you need it.
Amend Your Previous Returns
Working with a professional this year can also help with previous years' returns. If there were deductions that you missed or mistakes made on your prior tax returns, an accountant can make necessary adjustments for you. In general, you are able to claim a refund up to three years after you have initially filed your original return, so taking a second look can be beneficial for more savings.
Get Help With Tax Planning
While filing yourself can certainly get the tax job done, a professional can provide insight into important tax decisions that can make a big difference. These decisions can make big changes in how much tax you will pay over time, so it makes sense to consult with an expert who can tell you. Being thoughtful with your tax planning is a process that will pay off in the long haul.
What types of accountants can help with taxes?
While any accountant can help you with your tax return, certain professionals hold specialized qualifications that may be beneficial to your situation.
A CPA, or certified public accountant, is a licensed professional that has passed a comprehensive CPA examination. These experts have a license through their state and need to take continuing education classes in order to maintain their status. CPAs will typically be required to have a degree in accounting or a relevant field. All CPAs may not necessarily specialize in taxes, but they can still be a great help in filing your tax return. A CPA can also represent you to the IRS if you are summoned due to debt issues or auditing.
An Enrolled Agent, or EA, is a tax professional with official certification from the IRS. This position does not require a degree, but it does certify that the person in question is up to date with US tax laws and is an expert in taxes. While a CPA may not specialize in taxes, all EAs specifically specialize in taxes and tax issues. Enrolled agents can represent you to the IRS in case of issues such as unpaid or unfiled taxes or audits.
What documents will I need to bring to get my taxes prepared?
When bringing your return to get professionally prepared, it is important to bring the necessary information so that your accountant has everything they need to file your return correctly.
Basic information - Your Social Security Number and your spouse/dependent’s name date of birth, and Social Security Number
- Your previous year's tax return
- Tax forms such as 1099s, W2s, 1098s, 940s, and 941s
- Receipts, documents, and reports for assets bought or sold during the year
- Income and expense records - these are especially important for maximizing your deductions, so make sure you keep a detailed list of mileage logs, travel info, charitable donations, and payroll information
- Bank statements
- IRA contribution records
- Balance sheets
How do I find a tax accountant?
Searching online can bring up numerous results for accountants, but can leave you with a burdensome amount of work. You then need to look at reviews, browse websites, and contact each professional you are interested in separately. In the end, you cannot be 100% sure if the accountant will be well qualified for your specific tax situation so you may wind up needing to search again, leaving you with even more frustration.
You can also find an accountant by calling around to different firms. This can be a time-consuming process and is often frustrating due to dealing with the need to repeat your situation to multiple people again and again. It may also be difficult to find an accountant who has open availability or who is accepting new clients.
Using Ageras to find an accountant allows you to compare 3 professionals at once - 100% free and non-binding. When you submit a request for accounting help, we personally review your case and match you with experts from our nationwide network according to your needs and preferences, so you get the help that is perfectly suited to you at the best competitive prices.