It’s that time of year again, when individuals and business owners become swamped with the all-consuming task of tax preparation. With the newly changed tax timeline for 2016, there are many new filing deadlines to keep in mind this year. When trying to determine whether to hire a CPA (Certified Public Accountant) this tax season, here are a few considerations to keep in mind.
Know The Value of Your Time
Your time is valuable and should not be overlooked when deciding to hire a CPA or filing your own taxes. Oftentimes, your taxes become more complicated the busier you are. Significant life events such as buying a home, having children, transitioning jobs, getting married or retiring can have time consuming ramifications on your tax return.
With so much on your plate, it can be difficult to keep track of the deductions to claim, worksheets and forms to complete and deadlines to meet. It can be reassuring to know that a financial professional will be handling the paperwork so that you can get back to business (and enjoy your weekends, too!).
Expert, Up-to-date Knowledge
Each year there are new changes to tax rules, regulations, laws and deadlines.
For example, the deadline change which will go into effect this upcoming tax year will have an impact on the due dates of several common tax return documents. This revenue provision was attached to a highway bill, Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, P.L. 114-41. Busy business owners and individuals do not have the time to research all recently passed legislation to understand the effects on their taxes.
Hiring an accountant is a good way to stay ahead of the curve and keep up with these ever changing rules. CPAs must annually renew their license, meaning that they stay up to date on all changes to tax rules, regulations, laws and deadlines.
Put Your Best Foot Forward
An accountant can help you maximize your deductions, take advantage of appropriate tax credits and manage contributions to your retirement accounts. Familiar with the ins and outs of the tax return process, CPAs can strategically use that knowledge to look out for your best interest. If you are uncertain as to whether you are capitalizing on all of the possible, legal ways to save money, a CPA can help.
Tax Software: Pros and Cons
For some, personal tax software such as TurboTax or H&R Block can be adequate for filing tax returns. These options are simple, easy to use, relatively quick and inexpensive. If you have a simple tax return, using personal tax software to file your own taxes is a straightforward process.
However, if you are unsure of what deductions to take, then personal tax software may not fully guide you. Some may not know how to maximize savings without unknowingly claiming a deduction for which they do not qualify without assistance. There are also fewer opportunities to catch a mistake when filing your taxes using personal tax software.
When you know what deductions to claim, you can maximize your savings and avoid pitfalls. Since you are on your own when filing through personal tax software, there is no one else checking your work to catch your mistakes. In contast, with a CPA, a tax professional reviews your return.
The True Advantage of a Hiring a CPA
While the time you save and expertise you receive are significant benefits of hiring a CPA, the greatest advantage is the professional relationship that you build. When you work with a CPA, they can help you with both your current tax preparations and strategic planning.
The real return comes in the form of a strong relationship with a CPA that will have your best interest in mind for years to come, taking a large piece of the burden off of your shoulders!