The mere mention of taxes often inspires fear in the minds of taxpayers. Whether you’re an individual or a small business owner, filing a tax return is something you simply can’t avoid. The old days when anyone could fill out a simple return are fast disappearing. This is especially true if you have a complicated return, multiple streams of income or plan to take several deductions. Tax help for business owners is a critical necessity to make sure quarterly and end of the year taxes are files accurately. Familiarizing yourself with the benefits of professional tax preparation will help you decide if it’s the right choice for you.
Using a tax preparation service initially costs more than filing yourself. However, professional accountants can also save you a lot of time and money down the road. Instead of spending hours reviewing tax minutiae and crunching numbers, you get the convenience of having someone else do it for you. Likewise, the best services only use Certified Public Accountants or Enrolled Agents – the most competent tax specialists available. This means your tax return is guaranteed to be as accurate as possible. In contrast, doing your own taxes your opens the door to errors. A simple math mistake or missed deduction can mess up your entire return or even cause you to be audited.
When times are financially tough, every dollar counts. As such, spending money on a tax specialist may seem inconceivable, even if you see the benefit in doing so. However, you may be surprised to learn that the cost of hiring a professional may be tax deductible. The mileage expended to drive to and from your agent, postage for mailing tax forms to him or her, as well as, the cost of the preparation itself can all be deducted if your expenses total 2 percent or more of your adjusted gross income. These types of deductions are considered miscellaneous and should be reported on Schedule A of IRS Tax Form 1040. Be sure to have your accountant itemize your deductions if you want to take advantage of this tax break. Not only that, but accounting professionals generally know about deductions you might not be aware of so they can get increase your deductions, thereby lowering your taxable income.
Auditing support is one of the most important benefits of using a professional tax service. In addition to lowering your chances of being audited, having a CPA or Enrolled Agent in your corner can give you the support and tax expertise you need to successfully pass an IRS audit if one comes up. When facing an audit, it is essential to have someone you trust to help you through the process. Likewise, in the unlikely event that an error is made by your tax professional it can easily be resolved. In contrast, going it alone can often result in pricey litigation. Unfortunately, not all tax professionals are alike so choosing the right person from the start makes all the difference. In addition, the IRS has begun to crack down on many less than scrupulous tax preparation companies so be sure to get references and verify credentials before trusting someone with your most sensitive information.
Ultimately, the decision of how to prepare your taxes is one you must make based on your own needs and circumstances. However, understanding the benefits of working with a professional can make the decision a lot less complicated and even ease much of the apprehension you may have about facing the coming tax season.