Each year, individuals and corporations are required to submit tax returns to the federal government as well as to many state government tax agencies. While it is possible for an individual or business owner to do his or her own taxes, it may be worthwhile to get professional help with a return. Why may it be worthwhile to get help on a tax return?
1) It Can Be Most Costly to Make a Mistake
One reason why people don’t get tax help from a professional is because they think it costs too much. However, paying hundreds or thousands of dollars in late fees because of a math error or because an improper deduction costs much more than paying $200 for a tax preparation expert to do it for you.
2) Ignorance Isn’t a Defense Against a Mistake on a Tax Return
If the IRS or the federal government sends you a notice that your return has been audited, they will not accept ignorance of the law as a defense even though the tax code is tens of thousands of pages long. They will expect that you know that your return is accurate before you send it in. Additionally, it is important to know that interest and penalties apply from when the return was filed regardless of when an audit is sent out.
3) You May Not Know About All Available Tax Credits or Deductions
A professional tax expert may know of deductions or credits that an individual or a business is allowed to take that you don’t about. New business owners may not be aware of all the expenses that they can deduct from their taxable income or why a corporation may save them more money than a sole proprietorship. It is also not known by many that you may not need kids to qualify for the Earned Income Tax Credit as long as you make less than $13,000 a year.
4) Do You Know When Your Taxes Are Due?
For individuals or sole proprietors, their state and federal tax returns are due by April 15 with returns due by October 15 if an extension is filed for and granted. For corporations on the calendar year, the corporate return is due by March 15 with an extension of September 15 available for those who apply for it. However, if you are on a fiscal calendar, your return may be due by February 1 or October 1 or November 1 depending on when the fiscal calendar ends. Therefore, it may become difficult to remember when documents need to be filed or when w-2s may need to be sent out to employees.
5) You Might Not Have Time to Do it Right Yourself
If you are the owner and sole employee of your company, you may not have time to worry about doing your taxes. Instead, you want to spend as much time creating products or dealing with customers. Having to dedicate time to filling out tax forms that you may or may not understand takes time away from finding investors or landing a huge client that could take your company to the next level. If you don’t have time to commit to doing your taxes correctly, it is certainly worthwhile to hire a tax preparation expert.
We talked with Bowman & Company CPA who added, “For individuals and business owners, finding help completing a tax return could save money regardless of how much a preparation expert costs. Instead of having to deal with the IRS or a state tax agency questioning your return, you can go about your life or running your business in peace. That peace of mind is something that you cannot easily put a price tag on.”
