ax laws are becoming more complex each year, and an increasing 60% of taxpayers are relying on professionals to prepare their returns. In the last season, 84 million taxpayers actually paid for tax professionals’ services.
However, with tax calculation software gaining more recognition, many people still prefer to file their returns on their own. But what are the limitations of using software and where can a tax professional add value, and potentially a few more hundred dollars to your refund?
Firstly, we want to point out that you should check the IRS recommendations before choosing your tax preparer, we will go through the advantages of working with a preparer, which could be your starting point when deciding whom to work with.
Tax Policy Awareness
Tax news is in the press almost every day, but how much do you know about the latest policies, what are miscellaneous deductions, or the tax credit conditions? Most people qualify for a $5,000 credit but they don’t know it exists or how to get it. Also, under miscellaneous deductions there are lesser known expenses, like cab fare to the doctor’s office, or the money you lost gambling, that help get you a bigger refund during tax time. A professional tax preparer knows all these “tricks” and will help you optimize your return, while doing all the paperwork for you!
Also, a tax professional’s help could save you from IRS penalties that may result from you incompletely or erroneously filling in your return, as a result of not having enough information about the current tax regulations.
Specialized Tax Advice
Depending on the type of return you need to file, you can always access tax advice tailored to your needs, rather than learning tax accounting on your own. You may need to work with a tax professional specialized in small business returns (Schedule C), S Corporations, C Corporations, investment income, rental deductions, or your individual tax return. Unlike volunteer tax preparers or tax software, licensed professionals are able help you with audit or interface with IRS for collection issues. The IRS recognizes Enrolled Agents (EAs), Certified Public Accountants (CPAs) and attorneys to represent you at audits and collections. Some people may argue these services cost money, but here is the good news: these are deductible expenses!
Expertise, Reduce Time, and a High Refund!
Working with the right tax preparer will ensure your tax returns are prepared with expertise, reduce the time required to file, and result in a potentially higher tax refund check.