The fear of being audited by the IRS is a deep-seated one for many Americans—and is probably a reason why 21% of taxpayers would be willing get an IRS tattoo if it meant never heaving to deal with the agency again.
What’s your biggest monthly expense? Your house payment? – Not even close. Rent? – Nope. Car Payment? – C’mon are you driving a Lamborghini or something?
Preparing your tax return can be a confusing and time-consuming process. Although hiring a certified public accountant (CPA) is not cheap, the amount of time you will save and the possible tax savings found could make it worthwhile.
1. CPAs are considered the best in their profession. An accountant must fulfill certain college and on-going education and experience requirements and pass a comprehensive accounting exam before being certified. Ask how long your CPA has been practicing, what other experience your CPA has, and the quality of the staff. Beware of offices that are not open year round.
2. CPAs are helpful if you have a difficult tax return, own a business or have had major life changes, such as buying a house or having children, in the last year. The laws change every year. This year, in particular, with a new administration and a struggling economy the tax laws were drastically changed. CPAs are required to have annual training and keep up with the new laws.
3. Because they remain up-to-date on changes in tax laws and accounting policies, CPAs are able to find deductions and credits you may not be aware of to lower your taxes. Your CPA should not cost you money, your CPA should save you money! You should walk away from your CPA thinking thoughts such as “no one ever asked me that before, I didn’t know you could deduct that and now I know what will help me in the next year”. If you are not thinking that way, maybe you should think about changing CPA’s.
4. If your return is not difficult, you may think it may be cheaper to use a chain tax preparer or to prepare your own return on one of the many on-line sites. Beware. Anyone, and we mean ANYONE can take a chain providers class, and start preparing your return. There’s a lot at risk to have a part-time, unskilled, non-professional, seasonal person with other career or life aspirations preparing your return. Chain providers are NOT necessarily less expensive then CPA’s. Never go to a provider that charges based upon your refund, and never apply for a refund anticipation loan (RAL). RAL’s can cost significant amounts of money, when e-filing can get you a refund in a maximum of two weeks. Some CPA’s are “generalists”. That is, they prepare returns and offer advice. Some CPA’s over a variety of products and services. Either way, your CPA should be able to point you in directions for advice on retirement, financial planning, insurance etc.