If you’ve ever chosen to file your own tax returns, you know it can be one of the most stressful and time-consuming things you’ll ever endure. There are countless laws to consider, and the list of things that are deductible versus things that are not deductible can be confusing and challenging. Often times there are thousands of dollars left on the table in missed deductions and erroneous filings. This is where hiring a professional tax preparer comes in: someone whose sole job is to ensure the most accurate tax filing with the experience and knowledge that most individuals simply do not possess. There are plenty of advantages to hiring a professional, which are listed as follows:
According to the IRS, the average person would spend just under 25 hours (24.7 to be exact) completing their tax returns. To put that number in terms of expected value, if we assume the average person’s time is worth about $25, that adds up to around $1,300 overall. In contrast, hiring a tax preparer to save you those 25 hours would cost less than 10% of the expected value of that time.
Fees associated with tax preparation can be deducted as long as certain requirements are met, specifically if these costs you’ve incurred are at least 2% of your adjusted gross income. For instance, you may be able to deduct the mileage you drove to meet with your tax preparer, as well as the postage you paid to mail documents to your tax preparer (and the postage you paid to mail your tax return to the IRS and state tax agency). These things may seem small, but any money saved can be crucial.
Everybody’s situation is different, with subtle nuances defining what exactly a person is eligible or not eligible for. Electronic solutions like TurboTax are good for basic returns, but by no means are reliable to scour your personal situation and find every deduction possible. Especially important during tax time is ensuring your filings are handled promptly, correctly, and with care. Hiring a professional tax preparer will ensure that the human element will be present, and that the finest details that would otherwise be missed are accounted for. In addition, in the off chance that you are audited (only 1% of taxpayers are audited annually), having a professional tax preparer can help streamline the paperwork and represent you in front of the IRS, which is crucial to fighting whatever issues you may be facing.
In line with finding hidden deductions, a professional’s sole job is to perform their duties to the highest of their ability. Mistakes in filing can be detrimental to your financial security, and failure to file can lead to IRS action and massive debt. Having an accountable CPA or other tax preparer can take the risk out of these complex filings. Having a professional prepare your taxes is also extremely convenient and time-saving (see point 1). This convenience is an underestimated factor, as many young people have never had to sit down and file their own taxes yet. That first experience can be traumatizing, frustrating and overwhelming. The choice to utilize the convenience a professional preparer provides is a prudent one, and one that should be seriously considered.
There are multiple options when it comes to tax time; file your own taxes, use an electronic service and hiring a professional preparer. For those whose tax returns are extremely simple, perhaps an electronic service is a better option, but that is debatable. Overall, hiring a professional tax preparer is the most sensible and safe route to file your tax returns in a timely and efficient manner.
Encompass Accounting wants to be your tax preparer for 2016 and beyond. Schedule an appointment today online now at www.encompassde.com/scheduler
Author: Tyler Nolan, staff writer for Encompass Accounting, Inc. Twitter: T_Nol_