Do I Need an Accountant to File My Taxes?
This is a difficult question to answer because it really depends on your situation. Many people find that they save money by going to an accountant each year because their tax refund increases significantly. You need to consider how complicated your situation is. If you are self-employed, then you may consider using an accountant. Additionally, if you have had a big change in the amount you make, if you purchased a home for the first time or you have questions on how to handle your investment income you may consider going to an accountant.
You may also want to use an accountant if you need to amend your tax return.
Times When You Need to Use an Accountant
There are advantages to going to an accountant if you have a complicated situation. The difficulty in doing your own taxes has been reduced by using the software. If you file online, you can receive your refund in about three weeks, if you also use direct deposit. You should check with your accountant to be sure that he offers this service, as well. There is no reason to use a refund anticipation loan because the wait time for you refund is so short now.
- Owning Your Own Business--If you own your own business or you are self-employed, an accountant can help you to file your taxes correctly and keep you from making any mistakes. Your accountant can also help determine how much you should pay for your quarterly estimated tax payments.
- Buying a New Home--When you buy a new home, your tax picture should change dramatically. An accountant can make sure you are taking advantage of every benefit available to you and help you determine how to adjust your withholdings. You may only need to use an accountant the first year you buy a new home.
- Major Life Changes--Any major life changes maybe a good reason to use an accountant. if you got married, had a child or went through a divorce, an accountant can help you adjust the way that you do your taxes. Again, you may just need to use an accountant the year you have these changes.
- Failing to Pay your Taxes in the Past—If you have not filed your taxes in the past, then you should reach out to a professional for help. A tax accountant can help you file several years’ worth of taxes and may know of programs offered by the IRS for people in this situation. The IRS may be willing to set up a payment plan and it helps to have an accountant work on your behalf to make sure everything is filed correctly as you attempt to rectify the issue of failing to pay your taxes in the past. You may also want to contact a tax attorney when you do this. Your accountant may be able to recommend one that work specifically with situations like this.
Times You May Not Need an Accountant
If your tax situation has not changed over the last year or you are single and rent, you may not save any money by using an accountant. If you do not have children or anything that may complicate your taxes, you may not need an accountant. However, if you have any questions, it never hurts to reach out to a professional accountant or CPA about your taxes. Someone who deals with this professionally may be able to help you determine the best course of action. The software programs have been developed to handle most straightforward situations.
Alternatives to Using an Accountant
An accountant can be expensive, which is the main disadvantage to using one. If your situation is fairly simple, you should be able to use one of these alternatives to help you save money on your taxes. Be sure that you have received your W-2 and all of your 1099 forms before you file, so that you do not have to make any corrections after you have already submitted your taxes. Allow around an hour to complete your taxes, unless you have a complicated situation. You can also use state software to complete your taxes, which will save you time.
Filing electronically will speed up the refund process.
- Consider Using Tax Software---Most people can do their taxes at home with the tax software that is available to purchase. In fact, if you make less than $54,000 a year you may qualify for free file, which allows you to access the software at no additional cost. This software is easy to use and asks the questions you may miss if you filled out the forms by hand. The software will ask you questions to help you qualify for any tax credits and deductions. If you are a recent college graduate or a current college student check out these extra tax credits you may qualify for.
- Use a Tax Preparation Business--Many tax preparation places do the same thing and use the same type of software that you can purchase at the store. If you are more comfortable having someone else be responsible filling out your return for you, this may be an option to consider. You need to consider the fees that the tax preparation places charge and weigh that against using an accountant or purchasing software and deciding which one works the best for you.