When Should You Hire A Professional To Do Your Taxes?

If you’re not sure whether you have a simple tax return you can do yourself, or you wonder about missing significant tax advantages or are concerned that you might be making mistakes, use the checklist below from the American Institute of Certified Public Accountants to help you decide whether you should hire a certified public accountant to help you prepare your tax return.

You may want to consult with a CPA if you:

• Bought or sold a home. You’ll want to take all allowable deductions and make sure you qualify for the personal residence exclusion.

• Got married, divorced, or your spouse died. Only a competent tax professional can guide you through the complex tax rules that pertain to assets passing through estates.

• Had a baby or adopted a child. A CPA can explain in plain English the sometimes dumbfounding array of investment options for saving for a child’s college education, as well as details about the child credit, child care credit, and earned income credit.

• Have a retirement plan, such as an IRA, 401(k), Keogh plan, a pension or an annuity.

• Recently bought or started a business, own a business, or work from home. A CPA can advise whether you should operate as a corporation, partnership, or sole proprietorship.

• Acquired rental property or have rental income. A CPA understands the complex tax rules that apply.

• Have needs for estate planning and understand all the ramifications of property taxes.

Like your doctor, your tax preparer knows a lot about your personal situation, so continuity of service is also essential. That’s why, for many individuals, a CPA is a right choice.

CPAs are college-educated, licensed professionals certified by the states in which they practice. They have passed a rigorous licensing exam and are required to adhere to strict ethical standards and stay current with evolving tax laws and regulations. They are not part-timers who took a crash course in a few basic tax rules, operating out of a storefront. Finally, if a dispute arises about your tax return, only CPAs, attorneys, or enrolled agents are authorized to represent you before the IRS.