With the wide variety of options out there for self-preparing your tax returns, it may be easier than ever to forego your annual visit to the accountant and save some money by simply flying solo for tax season. But opting against having a licensed professional in your corner can just as often wind up costing you money or lead to you landing in hot water with the IRS.
How does one know when they should take the safe route and hire a CPA and when their return is simple enough that they can handle it on their own? Fortunately, if you’re careful about understanding how your circumstances could affect the complexity of your return, you can know when you’re in a situation where it’s worth hiring an accountant.
So before you file, make sure you’re in the know about your tax situation.
Plenty of people will ultimately file with one source of income and opt for the standard deduction, skipping out on itemizing and taking the path of least resistance. And, in many if not most cases, these people would be right in assuming that self-preparing is their best option. However, many other Americans have much more complicated circumstances with a tapestry of income sources, dependents, and potential deductions that they are struggling to navigate. For them, it’s well worth the money to simply hire someone in the know and rely on their advice.
Here are five signs that your situation is complex enough that you really should get professional help in filing your taxes:
You Don’t Have the Time or Patience
If you’re overwhelmed by adding your taxes to an already packed to-do list, it may be worth it to pass the entire task over to an accountant.
You’re Going to Have a Major Life Event
Getting married, having a child, starting a new job or buying a home can all complicate your taxes considerably. An accountant can help you understand how things have changed for you.
You Bought or Sold a Home
There are a lot of deductions surrounding home sales, and you wouldn’t want to overpay, so it’s usually worth consulting a CPA to be sure you aren’t missing anything.
You Got Divorced
Ending a marriage means a very different tax situation moving forward, so check in with a professional to make sure you’re filing an accurate return.
You Started a Business
With new sources of income and expenses, not to mention a bevy of potential deductions, it’s worth making sure your business’s returns are handled by an accounting professional.