Tax time will arrive before you know it — and with it. the potential for trouble, frustration, and confusion. If you feel the temptation to skip the CPA fees and file your taxes by yourself, you need to realize that the DIY approach isn't equally wise or convenient for everybody. Here are three scenarios in which you should take the extra step of engaging professional tax services.
1. You Have Capital Gains
Capital gains — the money made from investments in the stock market, retirement accounts, or other assets — can greatly complicate your tax calculations. Depending on whether you've held those assets for more than one year, you may have to pay capital gains taxes at varying rates. If you lost money, you might also have the opportunity to lower your tax burden by claiming up to $3,000 in capital losses. Here, too, you're looking at different rates for long-term versus short-term assets, along with some other strictly enforced IRS rules. You don't want to wade into these waters unless you're really fascinated by tax law. A tax preparation specialist can probably do it much more quickly and accurately.
2. You're a One-Person Business
Have you made the transition from 9-to-5 employee to independent contractor or sole proprietor? As exciting and liberating as this move may seem, you'll find that you no longer have the luxury of knocking out your tax preparation simply by filling out a 1040-EZ page. Freelancers and sole proprietors ave additional tax concerns, from the Estimated Sales Tax (which makes up for the portion of your Social Security normally paid by an employer) to Schedule C forms. If you get your health insurance through the Health Insurance Marketplace, you may have claimed a rebate on your premium payments — a rebate that must be figured into your tax bill. These and other complexities call for the skill and expertise of a CPA or other professional tax preparation specialist.
3. You Worry About Getting Audited
Do you bite your nails about the prospect of receiving an audit from the IRS? You can stop worrying by realizing that for the vast majority of Americans, the odds of getting audited are around 0.5 percent, or 1 in 200. Even so, nobody wants to fall into the unlucky side of that statistic. Hiring a tax services professional can help put your fears at rest even further. These experts can ensure that you're making all of the right deductions (and none of the wrong ones) in accordance with the current tax laws. They also know how to avoid any potential "red flags" such as sloppy documentation or omitted forms. Simply having a reputable CPA sign your return gives that return an extra dose of credibility. If you do get audited, the professional who prepared your taxes can explain the documentation, reasoning, and methods used in precise detail.
There's never a bad reason to employ a professional to help you get through tax season. Contact a tax service like Ruben D. Rosas, Inc. Accounting & Tax Solutions in your area and learn more about this kind of service can make your life easier!