Do-it-yourself tax filing is a rewarding exercise for individuals who know how to do it. However, most taxpayers cannot file their own taxes because the rules, regulations, and terminology are difficult to understand. Even if you are careful with the details, there is always a chance of error.
If you are a small business owner or a freelancer, the regulations are more complex and keeping up with the changes in tax law might feel overwhelming. You need to be especially vigilant because false information or even honest mistakes can attract punitive consequences. So, what do you do? Simple! You can hire a tax professional.
Tax Professionals Can Save You Time and Money
Image via Flickr by Pictures of Money
Filing tax returns takes time. If you are a busy individual, you might not have the time to file the returns promptly. If you represent a business, that time spent can very well be income lost. As a result of rushing, you may inadvertently introduce inaccuracies in the forms.
Tax professionals are experts in the laws and regulations regarding taxation. They can handle your tax forms and save you time. They know how to itemize your assets and income thereby reducing your tax liabilities. Tax professionals may even find tax credits or deductions that you might not even be aware of.
Furthermore, a tax professional’s knowledge is current. They are aware of the changes in regulations that happen every year. It certainly beats having to read the economic sections of newspapers or wading through the IRS website.
Tax Professionals Can Help You Avoid Legal Trouble
What happens when the IRS starts auditing your return or asks questions about it? Responses to such formalities require specific formats and language, and the IRS can hold you responsible for any discrepancies.
Tax pros can represent you in these cases and save you from further inquiry. They are familiar with the taxation process and different tax brackets. If you are struggling with back taxes, they can liaise with IRS and help you find tax relief.
Is it Really Worth Hiring a Tax Filer?
This convenience comes at a price, which varies depending on a variety of factors. Of course, you can save some money by filing the taxes yourself if you feel confident. But the time you spend preoccupied with the nitty-gritty can be spent elsewhere to maximize your revenue streams. Your increased revenues can easily recover the professional charges, and you’d still have more than enough money left over. You can also personalize your requirements with any qualified tax consultant, just like you do with your family doctor. What have you got to lose?
However, if you do decide to hire a tax filer, the first thing you should do is to verify that tax preparer has Preparer Tax Identification Number (PTIN) and take a few precautions:
- Do not hire a tax professional promising exorbitant returns in return for a percentage;
- Do not change your tax professional very often;
- Verify the credentials of the individual tax professionals;
- Ask your tax preparer to sign and enter the Preparer Tax Identification number on your returns, and;
- Do not sign on any blank forms.
