Tax season is stressful for most Americans. It can cause feelings of anxiety about what you might owe and whether you have all the documentation you need. It can bring about frustration at how complicated the filing process is and about unfairness in the tax system. It can also take time away from other important aspects of your life, such as work or spending time with loved ones.
The more complicated your financial situation and tax obligations are, the more concerns you may have. Hiring a tax professional can help alleviate a lot of these concerns by taking pressure off of you during tax season. It also offers a variety of other benefits that can not only save you from overpaying on your return, but can also set you up for financial success in the future.
What is a Tax Professional?
Tax professionals specialize in preparing and filing tax returns. They offer expertise, qualifications, and practical experience in managing taxes for clients, including independent taxpayers and businesses.
A reliable tax professional has comprehensive knowledge of tax laws and stays up to date on codes and regulations. There are a number of job titles and credentials that tax professionals can hold. Most commonly, tax professionals may be:
- CPAs (Certified Public Accountants)
- Tax Attorneys
- EAs (Enrolled Agents)
- Tax Preparers
1. Potentially Save You Money
Many individuals are wary of hiring a tax professional due to out-of-pocket costs. However, tax professionals are generally able to identify each and every available deduction and credit, help you avoid costly fines, and provide year-round guidance to reduce your overall tax burden.
The cost savings associated with hiring a professional are usually greater than the cost to employ them, meaning that hiring a tax professional is a beneficial investment.
2. It Can Save You Time
Doing your own taxes takes time. In fact, the IRS estimates that nonbusiness taxpayers – i.e. those filing an individual return that doesn’t include income from a business, pass-through entity, rental property, or farm – need an average of about 8 hours to prepare their return. If a portion of your income comes from a business or rental property, this estimate jumps to 21 hours.
Tax professionals know the tax code like the back of their hand, and they can prepare an accurate return much more quickly than the average taxpayer. You can save yourself a significant amount of time by leaving it to a professional.
3. It Helps You Avoid Costly Errors
For most Americans, one of the main reasons to hire a tax prep professional or CPA is to avoid mistakes. Even small tax-time errors can cost you significant amounts of time and money, not to mention confusion and stress. Common mistakes taxpayers make on their returns include:
- Simple math and entry errors
- Missing or inaccurate Social Security numbers
- Incorrect filing status
- Misspelled names
- Inaccurate credits and deductions
- Incorrect bank account numbers
- Unsigned forms
Hiring a professional tax preparer significantly reduces the risk of these and other errors and ensures you take all deductions and credits to which you’re entitled.
4. It May Reduce Your Risk of Being Audited
Hiring an experienced tax professional can help avoid errors and inaccuracies that can lead to an audit from the IRS.
In the unlikely event that you are audited, you’ll already have access to a tax professional who is familiar with your return and financial situation and will be able to help you navigate the process.
At Chatterton & Associates, we offer comprehensive IRS audit representation in the event that you end up facing an audit.
5. It Can Take the Stress Out of Tax Season
Let’s face it, tax season can be extremely anxiety-provoking. Hiring a professional who is well-versed in the tax code and in your individual situation can significantly reduce any stress that comes with the process.
When Should You Hire a Tax Professional To Do Your Taxes?
If your tax situation is relatively simple and/or you have the necessary time and skills to complete your own return, then you may not need the help of a professional. Anyone can do their own taxes! But in most cases, hiring a tax professional can save you time and money while also reducing stress and the risk of errors.
If your tax situation is more complex than the average nonbusiness taxpayer, it may be even more advantageous to hire a professional. Here are some situations in which seeking the help of a professional may be warranted:
- You’re self-employed
- You own rental property
- You own a business
- You’re an active stock trader
- You own foreign investments
- You’ve experienced a major life event during the tax year such as getting married or divorced
- You’ve received an inheritance or other substantial sum of money during the tax year
- You moved to a new state during the tax year
In addition to preparing your individual and/or business return, our tax experts are here to work with you throughout the year to reduce your tax burden, grow your wealth, and plan your estate and financial legacy.
Can You Do Your Own Taxes?
Doing your own taxes is absolutely doable, especially if your situation is relatively straightforward. However, if your taxes are particularly complex, or if you simply want to ensure you’re getting the most out of the process and don’t know where to start, hiring a professional with years of experience and specialized knowledge is one of the best decisions you can make come tax season.
Professional Tax Services & Planning for Long-Term Financial Security
As tax season approaches, it’s easy to become overwhelmed with the process. The experienced and knowledgeable tax professionals at Chatterton & Associates can provide you with the management and guidance you need to get the most out of your returns.
Whether you need help with individual or business taxes (or both!) or you’re looking for ways to reduce your overall tax burden and plan your financial future, we can work with you and any financial advisors you employ to make the process simple and efficient.
Contact us today to get started.
The Team at Chatterton & Associates