When to hire a tax professional?

During my morning reading I ran across Why Hire a Tax Professional? on Gina’s Tax Articles, which made me realize that I’ve gotten a lot of questions on this topic, but haven’t addressed it yet on my blog.  Thanks for the reminder Gina!

As Gina’s post explains, there are many software and online filing options; plus there is a ton of information available on the internet if you want to prepare your own tax return.  So why would you need to hire a pro with so many options to file your own return?  Here are just a few reasons:

1. The tax code is huge, and it changes frequently, making it hard for CPAs and tax pros to keep up with it, much less the average taxpayer.  CPAs are required to earn 30+ hours of continuing education each year - much of this is used to keep up with the tax law!
2. Tax software can’t discuss your tax situation with you.  Yes, it’s designed to ask questions to help you complete your tax return, but that may not be enough if you have a unique situation. 
3. In addition, you may have tax questions arise during the year, either due to a change in your tax situation, or due to a notice from the IRS.  It helps to have a tax pro on your team when this happens.

Because of the complexity of the tax code, I think everyone can benefit from a tax pro.  If you’re a business, I would recommend that you hire a tax pro from the very beginning.  The cost of hiring a pro is more than worth it if they can identify deductions/credits or other  areas of the tax law that can save you money.

Tags: income tax, tax savings, tax deduction, tax professional