• Business
  • Pros and Cons of Hiring a Tax Professional

    The excitement of New Year’s Day can quickly become dampened with the thought of tax season being right around the corner. Some Americans loathe this time of year because they either have to pay back taxes or locate and organize receipts and other financial documents. The frustration of completing one’s taxes can be greatly reduced by recruiting the services of a tax professional.

    There are a number of advantages if you decide to hire a tax professional.

    1. Allows you to save time

    According to reports, it can take about 24 hours to complete an individual tax return. This amount of time can be saved in the event that a tax professional is hired. A tax professional is able to complete returns in a timely manner because they have been trained and educated on various forms and tax laws. Also, with the help of a tax professional, time can be saved when trying to organize receipts and other financial documents. A tax expert can help you to save time by informing you of exactly what documents you need to retrieve, instead of you taking extra time to collect unneeded documents.

    2. Find deductions and credits

    There is a plethora of tax preparation software on the Internet or that you can purchase in stores. Such software is able to locate a number of deductions and credits as you go through the process of completing your taxes. It is possible for software to fail at giving you all the deductions and credits that you qualify for especially if the software needs to be updated and all tax laws have not been loaded into the software. An expert of tax preparation services is knowledgeable on all credits and deductions and is able to complete your tax return so that you are able to receive the biggest refund possible or it can lessen what you owe.

    3. Fees can be deductible

    Some taxpayers find it more beneficial to itemize instead of taking the standard deduction. In the event that you itemize, you have the ability to deduct tax preparation fees on your Form 1040.

    4. Find help during an audit

    Each year a number of taxpayers are chosen by the IRS to receive an audit. An audit letter from the IRS can send fear into anyone, regardless if you are not doing anything fraudulent. If you prepared your own tax return then it is highly possible that you will be going through this audit alone. But in the event that you hired a professional tax preparer to complete your taxes, then he or she can guide you through the process so that it will be easier.

    Though there are quite a few advantages of hiring a tax professional during tax time there are some disadvantages.

    1. Cost

    Professionals do not come with a cheap price tag. The price to hire a professional can go well above $300, depending on the complexity of your federal tax return. In addition to the federal tax return charges, if you live in a state where state returns must be filed, then you can expect to pay a fee of $150 or more.

    2.Inadequate tax experts

    There is a list of requirements for individuals to open up a tax office and e-file returns. These particular individuals must pass competency exams and complete mandatory continuing education. These requirements help to prevent certain people from opening a tax office. Though there is a requirement to open a tax office, almost anyone can receive a PTIN (preparers tax identification number). Just complete a PTIN application on the IRS website and in about 15 minutes you have a PTIN. With a PTIN, anyone can prepare your taxes and get paid to do so. It is possible that you may visit a tax office and have your return completed by an amateur.

    3. Appointments

    A major disadvantage of hiring a tax professional is that in many cases you will have to make an appointment to meet with the professional. This could be frustrating, especially if your schedule does not permit you enough time to attend such a meeting. Also, it should be noted that tax professionals are very busy during the tax season. They have other clients to see so setting an appointment with a tax expert can become a difficult task.

    Whatever you decide, making sure your taxes are done correctly and in a timely manner is what is important. Consider what will be better for you as you think about tax preparation.

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