The American tax code is arguably the most complex system in existence worldwide. With so many deductions, exemptions, credits and other assorted loopholes in places, knowing when to pay – and how much – is an exercise that can eat up copious amounts of your time. When factoring in all of the effective tax brackets and other rules that govern how we file, deduct and pay, the process can be an absolute nightmare for some.
Especially true if you own a business or have multiple sources of income, handling the process of preparing your taxes can result in countless hours of work each year. On top of that, one small mistake can cause an avalanche of scrutiny to be placed on your taxes by the Internal Revenue Service, resulting in even more work on your end to solve the problem.
Many people are resorting to the assistance of professional tax preparers and accountants in order to successfully file each year. If you have been considering doing this, then you’ll want to keep reading to find out some of the biggest reasons why this is a good idea.
Depending on your specific tax situation and how complex this year’s filing may be, the use of a professional tax solution may ultimately save you money. This can be a shock to some, considering that the straightforward process of completing your taxes costs nothing and many professional tax preparation solutions can cost hundreds of dollars.
Where the savings are often found is in more complex filings. Whether you own a small business, have numerous deductions or otherwise fall into a special tax circumstance, professional tax preparers know the laws and loopholes. Through their comprehensive knowledge of the tax code and professional tax software, these professionals are able to efficiently file on your behalf while achieving the greatest benefits.
On the flip side, it’s important to remember that any potential mistakes leading to an audit or increased scrutiny of your filings can cost you additional time and money. Most tax professionals offer some form of guarantee that ensures you won’t be personally responsible for sorting through such a mess if they file taxes on your behalf.
So, while paying more upfront to have a professional do your taxes may seem more expensive, it can actually be the more cost-effective option for those with more complicated returns to file.
As we touched on previously, there is no guarantee that the IRS will accept your tax return. If there are any red flags or potential snafus in your filing, then you are liable for correcting the return and potentially may be liable for expenses. With a professional tax solution, much of this changes.
For starters, professional tax preparers usually offer a guarantee to handle audit problems resulting from an audit or IRS rejection of the tax return. As long as you honestly provide the preparer with all relevant information, this guarantee is usually provided by the vast majority of professional services.
This means that you won’t be spending additional hours sorting through your returns and receipts, lawyering up to fight any potential charges from the IRS, and can rest assured that the problem will be handled in a timely and thorough manner.
Because tax code is so complex, it is nearly impossible for an average person to know all of the ins and outs of the system. This means that while filing your taxes can be straightforward in some situations, you may be missing out on valuable deductions or savings that only few know about.
If you trust your taxes to a professional, then you can use their knowledge and expertise to extract as much benefit out of the filing as possible. Especially true if you are meticulous with cataloging your receipts and expenditures, a professional tax preparer can sort through the papery mess and determine which unique and special tax exemptions and deductions you qualify for in your filing.
While it can cost quite a bit more to enlist the services of a professional in this area, many people do so because of the efficiency in this particular department: spending a few hundred extra dollars may not be a big deal if it results in your filing producing thousands in additional savings for you.
The use of professional tax preparation services can be a great way to avoid the complexities of the filing process. When considering how much time the tax preparation process can take, many opt to use these services for their own sanity.
As long as you have kept all of the relevant data and information surrounding your earnings and expenditures each year, you can easily drop these off with a tax professional for them to sort. This means that you’ll save a few hours of time almost immediately – and that’s before the actual filing even begins.
Another crucial point to remember is the amount of time saved in the event something goes wrong. Since your tax professional will likely guarantee assistance in the event of an audit, you’ll save time if anything goes wrong during the filing process as well.
All of this can add up to many hours saved. Depending on how much you value your time, the cost of a tax professional may be next to zero when weighed against the time you’d spend doing it yourself.
Professional tax preparation solutions may not be the best choice for every individual or business. Depending on the complexity of the process, how many deductions or exemptions you’re seeking and how much you care about maximizing returns, the service may not be necessary. Most average individuals may not find the benefits outweigh the associated costs.
However, if you want to save time, increase your return, avoid liability and minimize stress, then using their comprehensive knowledge and skill may be worth a great deal. Now that you know why so many use professional tax preparers, you can make the right decision for yourself in time for your next filing.