For many tax filers, April 15, 2010 is coming up too quickly for comfort. If the thought of preparing your tax return is already giving you nightmares, there are ways to ease the pain by hiring a tax professional.
However, before you start asking around and interviewing people for the job, you need to evaluate your situation and see if you can justify the expense of hiring one. If you can identify with any of the things listed below, chances are you should be hiring a professional to do the work.
1. Panic Attacks and Stress
No one likes having to pay taxes, but if you find that the forms, documents and all the paperwork needed to do the job might make you physically ill, finding the money to pay a professional is worth the expense.
Bonus: As long as the cost of the form preparation exceeds 2% of your adjusted gross income, the preparation fee can apply as a miscellaneous deduction.
2. Fear of Commitment
If you are a procrastinator or just refuse to make the time to fill out all your tax paperwork, then hiring a tax preparer might be for you.
3. Partying like it is 1999
If you are caught in a time warp and still think a loaf of bread costs 99 cents, a professional tax preparer may be in order. It is their full time job to educate themselves on new tax laws, deductions, applicable credits and news, and chances are you do not have the comprehensive information needed to file correctly on your own.
4. Inability to Follow Directions
Are you able to follow instructions well and independently? Or do you need constant reassurance that you are doing things right? If you answered the latter, get help.
5. Complicated Investment Taxes
Smart investors know not to put their eggs in one basket. If you are one of them, then your taxes may be especially complicated.
Those with international investments, a large variety of income, massive charitable contributions or income generated from real estate investments, can certainly benefit from the expertise of a professional.
6. Writing Off Losses
2009 certainly provided a roller coaster ride for investors. Whether you made a killing or took some hard-hitting losses, a professional can offer you tips and advice on your best tax preparation strategy.
7. Long List
For those who have simple, financial affairs, completing their own taxes should be a breeze. However, if you have a long list of deductions that need to be itemized, a knowledgeable professional should be on the case.
When the time comes, you must conduct your due diligence in hiring the person who will be handling your confidential information and completing your tax return. Ask your friends, check the preparers references, and make sure to inquire about their rate. Remember, not all tax professionals are created equal.