Approximately 38.8% of taxpayers opt to utilize the services of certified public accountants (CPAs) for their tax preparation requirements. This figure highlights the trust placed in CPAs to navigate the often complex and nuanced tax landscape. Certified public accountants are not only experts in tax laws and regulations but also possess the skills to optimize tax returns, ensuring that taxpayers can maximize deductions and credits available to them. Their role extends beyond mere tax preparation; they offer strategic advice that can have a significant impact on an individual’s financial health, aiding in long-term financial planning and decision-making.
However, the fact remains that a large segment of the taxpayer population does not seek the assistance of accountants for tax purposes. Many individuals might be unaware of the comprehensive benefits that come with professional tax preparation services. The expertise of a CPA can be invaluable, particularly for those with complex financial situations, such as owning a business, having multiple sources of income, or dealing with investments and rental properties. Professional accountants can help navigate the intricacies of tax laws, potentially uncovering savings and strategies that the average taxpayer might overlook. Moreover, the peace of mind that comes with knowing one’s taxes have been thoroughly and accurately prepared by a professional cannot be overstated. There is a clear need for greater awareness and education regarding the benefits of enlisting a CPA for tax preparation, which could lead to more taxpayers making informed decisions about managing their tax obligations efficiently and effectively.
“The best times to hire an accountant are when you have a more complicated tax year,” explains Finance Coach Jeannie Dougherty.
Here are five ways your taxes can become complicated:
- When you are buying or selling a home or property
- your investments or inheritance
- A new addition to the family
- Additional medical expenses
- Not understanding the tax questions
If your taxes are complicated, an accountant could help you and alleviate the stress of tax season.
“Another reason to hire an accountant is if you have been audited and know an accountant is a good practice for you or if you are about to be audited. Additionally, an accountant could be beneficial if you run a side business or have side hustles and need tax support. Lastly, if you don’t like doing your taxes because it causes more stress and hassle, an accountant exists to take that burden off your back,” Jeannie says.
Finance Coach Jeannie Dougherty emphasizes the pivotal moments when hiring an accountant becomes particularly advantageous. This insight is crucial for taxpayers navigating through periods of significant financial changes or complexities. The landscape of one’s financial obligations can drastically shift, warranting professional guidance to ensure accuracy and optimization of tax outcomes. Complexities in a taxpayer’s situation can arise from various life events and financial decisions, making the expertise of a certified public accountant invaluable.
Dougherty outlines five scenarios that significantly complicate one’s tax situation: buying or selling a home or property, managing investments or dealing with inheritance, welcoming a new addition to the family, incurring additional medical expenses, and not understanding the tax questions posed during tax preparation. Each of these circumstances introduces a layer of complexity to tax filings, potentially affecting deductions, tax credits, and overall tax liability. Navigating these situations without adequate knowledge can lead to missed opportunities for tax savings or, worse, errors that could prompt audits or penalties. An accountant’s role is to steer taxpayers through these complexities, ensuring they meet legal obligations while maximizing their financial benefits.
Dougherty points out other critical circumstances where an accountant’s expertise is indispensable. For individuals who have experienced audits or anticipate one, an accountant offers not just preparation but a defense strategy, ensuring that taxpayers are represented accurately and fairly. Entrepreneurs with side businesses or individuals engaged in side hustles also stand to gain from professional tax support, as accountants can offer advice on tax deductions and strategies specific to their business activities. Beyond the tactical advantages, the emotional and mental relief of handing over tax responsibilities to a professional cannot be overstated.
For those who find the process of tax filing overwhelming or stressful, an accountant acts as a safeguard against this stress, providing peace of mind and freeing up time and energy for other pursuits. Jeannie encapsulates this sentiment, highlighting the accountant’s role in alleviating the burden of tax season, thus allowing individuals to focus on what matters most to them.
