There is nothing more intimidating than dealing with the Internal Revenue Service regarding taxes owed. While not all situations require the need for a tax expert, there are some scenarios where you would be well served to consult the advice of a person who is well versed in tax collection. Here, we look at some of those situations that require the help of a tax expert versus dealing with the IRS on your own.
- Self-employed – There are many people who feel comfortable using one of the many tax software programs available to file their own taxes. In most cases, these individuals have very straight forward tax returns with little or no deviation from the “norm”. When you are self-employed, you may want to consider the help of a tax expert when filing your tax return. As a general rule, anyone who receives Form 1099 to report wages, in most cases self employed individuals, freelancers and independent contractors, can benefit from a tax professional to help find deductions to lower their tax bill. In many cases a tax expert can eliminate having to pay a tax bill by finding business expenses that can be used as a deduction, and in some cases you might even qualify for a tax refund.
- Higher earnings – Individuals or couples who have a higher income ($70,000 +) can benefit by using a tax expert to lower their tax bill. Itemizing your deductions can go a long way toward getting the maximum refund and avoid paying additional taxes on your earned income.
- Major life events – Life changing events can often result in changes when filing your tax return. If you married, had a child, bought a house or withdrawn money from your retirement account, your taxes will be affected. These and other life changing events often require the help of a tax expert to ensure you are filing your tax return correctly.
- Canceled debt – If you have filed for bankruptcy or had debt forgiven in the past year, a tax expert can help you avoid paying income tax on the canceled debt. This is not always an option, however having a expert on your side will increase your chances of paying a higher tax bill.
- Back taxes – Do you owe back taxes? Are you filing a late tax return? These situations definitely require the help of a tax professional to avoid paying penalties and fees. Late returns cannot be filed electronically and filing your return manually is often more complicated without the help or guidance of tax software. Owing taxes to the IRS is unlike owing money to your landlord or cell phone service provider. Delinquent taxes are a serious matter and should be handled as such, therefore a tax expert is necessary to avoid making further mistakes which will result in additional financial burdens.
As you can see, there are a variety of situations which would benefit from the help of a tax professional. Finding the right person to help is key to saving money and avoiding additional fees and penalties. If you have decided the time is right to hire a tax expert, take the time to carefully research the person or company handling your taxes. This will give you the peace of mind that your financial future is in good hands.