You’ve probably heard some variation of this: You wouldn’t do your own brain surgery, so why would you do your own taxes if you’re also not a tax expert? Plenty of accountants agree that you shouldn’t do your own taxes, said Dave Du Val, chief customer advocacy officer at tax audit defense firm TaxAudit.
It is true that most people can fill out a tax return on their own or with the help of tax software, Du Val said. But that doesn’t mean there aren’t benefits to hiring a tax accountant to help you.
Click through to learn the signs you really do need professional help with your taxes, and just what you’ll get when you consult an expert.
You Get a Return the IRS Is More Likely to Trust
One of the big benefits of hiring an accountant to do your taxes is the way the IRS will treat your tax return. “The IRS will be more accepting of a return prepared by a professional,” said Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting.
That’s because most tax preparers won’t risk their reputations to claim a questionable deduction for a taxpayer, he said. “The IRS recognizes that and feels more comfortable with a professionally prepared return.” Just make sure you work with a reputable professional with the right qualifications and credentials, such as an enrolled agent or certified professional accountant, Luscombe said.
You Get Peace of Mind
What are you most scared of by filing your own return? Likely, it’s getting something wrong.
By hiring a tax professional, “you get someone who knows tax code, what can and can’t be deducted,” said Eric Nisall, an accountant and creator of Bookkeeping for Bloggers. You get peace of mind that someone with a lot more knowledge about taxes has prepared your return.
In addition to having the right credentials, it’s also important that the person you hire is someone you feel comfortable with, Nisall said. Your tax accountant should have experience working with people in similar tax situations as yours and should be able to speak to you in terms you understand. “If you’re worried, that means that person is not right for you,” Nisall said. “That’s why you’re paying somebody. You’re paying somebody to make sure it’s done the right way.”
You Get Help Maximizing Deductions
Tax software can help pinpoint the credits and deductions for which you qualify. But a tax pro can help you figure out how to get the most out of tax breaks.
For example, if you have a home office, a tax pro knows there are two methods for claiming the home office deduction, Du Val said. The pro will ask questions about your situation to figure out which method is best for you. Or, if you own a business, a tax accountant will help you decide which year you should claim expenses to reduce your tax bill — not just for one year but for years to come. “There’s a bit more we can offer in that area,” Du Val said.
You Get Help Taking Advantage of Tax Law Changes
An accountant will let you know about changes to the tax laws during the year. “They’ll send emails to clients with things you can do before year-end to take advantage of tax law changes,” Luscombe said.
Sometimes changes to tax laws happen after tax preparation software companies such as TurboTax have issued their software for the year. For example, Congress extended several tax breaks when it reached a budget deal in February and made them retroactive for the 2017 tax year. A tax accountant would know about these extensions and likely amend your tax return if it had already been filed this year to take advantage of those extended tax breaks.
You Get Help Taking Advantage of Tax Loopholes
A tax professional can help identify tax loopholes that could save you thousands of dollars. Tax software will likely alert you to deductions or credits you can claim if you’re paying college tuition for a child. However, “using tax software might not alert you to the wonderful benefits of a 529 plan for your kids’ education,” Luscombe said.
A 529 college savings plan lets you save money for your child’s education. Some states will even let you deduct contributions to a 529 plan. The money typically is invested in mutual funds or other interest-earning investments. You can then withdraw that money tax-free to pay for qualified education expenses. A tax pro will point out tax loopholes like this that will help reduce your tax bill for years to come.
You Get Someone Who Knows Exceptions to the Rules
A good accountant or tax preparer knows there are exceptions to tax rules that you or your tax software might miss when doing your return. For example, the 2017 tax reform law put a limit on the amount of state and local property, income and sales taxes that can be deducted by individual taxpayers. However, Luscombe said that if you have a business — even if it’s a side gig such as renting rooms through Airbnb — state and local taxes are fully deductible. A tax pro would know as much and be able to help you take advantage of this and other exceptions to the tax code.
You Get Year-Round Support
One big benefit of hiring an independent accountant is that you get support 365 days a year — not just assistance as you file your return, Nisall said.
Tax software companies such as TurboTax and TaxAct provide customer service and support. But it’s not the same as calling an accountant who knows your name and your individual tax situation. “You get that personal service,” Nisall said.
You Get Proactive Advice
Another benefit of working with a tax accountant is the proactive advice you get throughout the year — not just when you file your return, which might be too late to make tax-saving moves. “Rather than waiting until after complicated financial matters take place, hiring a tax professional as you consider options is a great way to get on top of your tax situation,” said Megan Brinsfield, a CPA and director of financial planning for Motley Fool Wealth Management.
For example, if you’re thinking about opening a business but concerned about the costs, a tax professional can help choose the right business structure for tax purposes and let you know which documents you’ll need to maintain and what deductions you can claim. “The same proactive planning could come in handy if you are thinking of renting out your home, improving your home, relocating to a different state or even buying a car,” Brinsfield said.
You Get Help as Your Tax Situation Changes
When you have a major life event such as a marriage, birth of a child or divorce, it’s a good sign you need professional help filing your taxes. Your tax situation will likely change, and an accountant can help you plan for and deal with those changes.
For example, if you are divorced, it can be confusing figuring out which parent can claim the children as dependents. “There’s some tax planning that can go on in those situations that can get complicated,” Luscombe said. “A software won’t necessarily ask you all of the questions. A professional can’t always ferret out everything, either. But a professional is more likely to see the person before them and discuss the family and know more about them.”
More Details: Here’s How Divorce Impacts Your Taxes
You Get Help During an Audit
Just because a tax professional prepares your return doesn’t mean you won’t get audited. Of you do get audited, however, tax preparers can help if they are authorized to represent you before the IRS. You’ll want to ask if they are.
A tax professional might charge between $2,000 and $5,000 to represent you in an audit, Du Val said. It can be worth the money, though, because the professional will understand the process and help you avoid sabotaging yourself. “You’ll find most seasoned tax pros go to an the audit without the client so the client doesn’t ramble and get themselves in trouble,” Du Val said.
Click through to learn the ways you can prevent an audit.
About the Author
Cameron Huddleston is an award-winning journalist with more than 18 years of experience writing about personal finance. Her work has appeared in Kiplinger’s Personal Finance, Business Insider, Chicago Tribune, Fortune, MSN, USA Today and many more print and online publications. She also is the author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances.
U.S. News & World Report named her one of the top personal finance experts to follow on Twitter, and AOL Daily Finance named her one of the top 20 personal finance influencers to follow on Twitter. She has appeared on CNBC, CNN, MSNBC and “Fox & Friends” and has been a guest on ABC News Radio, Wall Street Journal Radio, NPR, WTOP in Washington, D.C., KGO in San Francisco and other personal finance radio shows nationwide. She also has been interviewed and quoted as an expert in The New York Times, Chicago Tribune, Forbes, MarketWatch and more.
She has an MA in economic journalism from American University and BA in journalism and Russian studies from Washington & Lee University.