Why Use a CPA for Filing Taxes
Many people dread tax time. Even if they’re getting money back, it’s still difficult to figure out everything needed to file a state or federal tax return, it can take quite a bit of time, and there’s the potential to lose out on money because of seemingly small mistakes. Instead of taking a DIY approach to filing taxes, it might be a much better idea to work with a CPA. They provide assistance that can help just about anyone who needs to file taxes and can help filers save money.
What is a CPA?
A CPA, or Certified Public Accountant, is someone who is highly trained in accounting, which includes tax preparation. A CPA must complete a five-year business degree that includes at least 150 hours of education. Then, they have to pass the CPA exam. After this, they must go through at least 120 hours every three years of continuing education. A CPA is adept at helping with accounting, tax prep, and tax planning, and can help just about anyone who needs help with filing their taxes.
When is a CPA Needed?
CPAs aren’t usually needed when someone has a very simple tax return. A simple tax return is generally a single person or couple with one or two W-2s and minimal interest earned during the year. For everyone else, a CPA might be beneficial. CPAs can work with those who have multiple jobs, who are self-employed, who are high earners, or who otherwise have complications that make filing taxes more difficult. Right now, the tax code is more than 73,000 pages, so when someone has a complicated tax situation, it’s far better to have an expert take a look before filing.
1) Save Time on Taxes
One of the biggest benefits of having a CPA handle the taxes is that they can help the filer save time. With more complicated returns, it can take quite a while to go through all relevant tax documents and figure out what needs to be included, what does, what deductions are applicable, and more. A CPA can handle all of this for the filer, saving them a significant amount of time. Depending on the complexity of the taxes, the time saved can add up quickly.
2) Make Sure You’re Saving Money
One of the biggest reasons to work with a CPA is to save money. Every year, thousands of filers miss out on potential tax breaks simply because they don’t know about them. CPAs are very familiar with the tax code and know how to find the most deductions and tax breaks for their clients. Those who do use a CPA will find out they can save money when they file, sometimes a lot more than they might have expected.
3) Minimize Potential for Mistakes
Even a small mistake can lead to extra money being sent to the IRS, an audit, or other issues. When a filer works with a CPA, however, they don’t need to worry about mistakes like this. The CPA knows how to spot potential mistakes and how to fix them, so there’s less of a chance of any mistake being on the final forms that are filed. Additionally, if the IRS does decide to do an audit, the CPA can help their client through this process.
4) Understand Tax Law Changes
With more than 73,000 pages of tax laws, it’s hard to keep on top of all of them. Plus, taxes are constantly changing, so keeping up with all of the laws and the changes can be incredibly difficult for most people. The changes mean it’s easy for a filer to miss something important that could have a large impact on their taxes. When they work with a CPA, the filer doesn’t have to worry about keeping track of all the changes that might impact them. The CPA stays on top of the latest changes and can help the filer know what changes might impact them.
5) High Income Levels
Top earners are more likely to make mistakes and more likely to end up being audited by the IRS. Those who earn more than $200,000 per year may want to look for an accountants office near me so they can have someone help with filing taxes. A CPA can provide the help they need to minimize the potential for mistakes that could be very costly or the chance of an audit. If the filer is audited, they’ll have the help they need to handle it.
6) Multiple Sources of Income
Some filers may have multiple sources of income due to having a couple of part-time jobs, a full-time job and self-employment gigs, or any other combination of work. While they may receive a W-2 for each job, they will still want to get help from a CPA before filing taxes. Multiple jobs can be more complicated to handle when it comes to taxes, so having an expert look over everything before filing is a good idea.
7) Own a Small Business
Small business taxes can be incredibly complicated. Small business or restaurant accountants understand the taxes relating to these businesses and can help filers make sure they are accounting for the business in their taxes properly. Especially in the first year of owning a small business, it’s a good idea for filers t look into finding a small business CPA near me so they can get the appropriate help and minimize mistakes. This could help them save a significant amount of money.
8) Self-Employment and Taxes
Those who are self-employed will definitely benefit from looking into taxation services near me. Many who are self-employed do not take enough deductions when they’re filing taxes, which means they’re giving the IRS more money than they should be. Instead, a CPA can go through all of their financial records for the year and ensure the filer is saving as much money as possible. This could help the filer significantly lower their tax burden.
9) Dealing with an Inheritance
Inheritance taxes depend on the type of inheritance, the amount of money received, and where the money came from or how it’s being used. This means the taxes filed after inheriting a large amount of money can be incredibly complicated, even if the filer can generally use the basic forms to file their taxes. A CPA can help the filer understand the impact the inheritance will have and what can be done to minimize the impact.
10) Handle Real Estate or Rentals
Real estate investments can be lucrative, but they can be difficult to deal with during tax times. There are many deductions available for filers, but they may need to meet specific requirements to claim the deductions. A CPA can go over all of the real estate owned by the filer to ensure they get any tax benefits that might be possible. Depending on the type of real estate investments and the amount invested, this could lead to huge savings.
11) Self-Directing Retirement
An IRA or 401k can be self-directed to help maximize the returns during retirement, but this can be complicated to handle when it’s tax time. It’s often a good idea for those who are self-directing their retirement funds to ensure they have help from a CPA. This can help minimize the potential for any costly mistakes and help the filer ensure they’re getting as much as possible from their investments.
12) Moving to a New State
There may be tax benefits when someone sells their current home and purchases another one. However, if the filer is moving to another state, taxes can get a little more complicated. They may need to file a state tax return in the new state, even if they didn’t have to file one in the previous state, or they might find out they no longer need to file one. In some cases, they might need help determining which state to file a state tax return in, depending on when they moved. CPAs can help clarify these potential issues.
13) Major Life Changes
Anyone who is going through a major life change can benefit from a tax preparation service or a CPA. Major life changes include getting married, getting divorced, having children, or retiring. When any of these happen, the filer’s tax situation will change and can become more complicated. Having the right help ensures the filer can handle the tax changes without issue and can help ensure they take advantage of any tax benefits the new situation may offer.
Unless you have a very basic tax situation, you could likely benefit from working with a CPA in Atlanta. Taxes can be incredibly complicated, especially if you have more than one job, are self-employed, a small business owner, or you’re going through a major life change. If you don’t feel confident filing your own taxes because of potential complications or you just want to save as much money as possible, talk to a CPA today. They can help you file taxes for the upcoming year, ensure mistakes are minimized, and work on saving you more money.
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