Determining when should you hire an accountant can be a hard decision to make. I know that I put off hiring an accountant. I thought that I could continue to do all of the work myself. I soon found out that I was missing the skills and time needed to do the job right.
Hiring an accountant or a tax professional can be a tough decision because chances are you are like me and have been doing your own taxes for quite a long time. However, hiring a professional can make a lot of sense in certain situations. The money they save you in taxes could potentially make up for their costs. You could receive a larger income tax refund in many cases by hiring an accountant to help you during tax time. Here are some reasons when should you hire an accountant to help you with your taxes.
When Should You Hire An Accountant – Several Instances
Here are a few instances where you may want to consider finding someone like an accountant to help you with your taxes.
Multiple Income Streams
When you start developing multiple income streams, that may be a great indication when you should hire an accountant. Multiple sources of income could trigger when it would be a good idea to hire a tax professional. When you are just working 9 to 5 and you only get a W-2 each year, your taxes are pretty simple to figure.
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But, if you start layering in investment income, real estate rental income, and a possibly a side business, your taxes can start to get very complicated in a short amount of time. Hiring a tax professional can help you streamline your taxes and make sure you have everything covered. They can also make sure that you are getting back everything that you deserve in your income tax refund.
When You Earn A Windfall
If you have come into money from an inheritance or other windfall like winning the lottery, there are a lot of potential tax implications. Before you do anything with the money, you need to call a tax professional to help you setup a plan.
A common scenario is someone wins the lottery, but then goes bankrupt because they didn’t plan for taxes. A tax professional can also help you make sure that you keep as much of the money as possible.
Screwing Up Your Taxes
I am embarrassed to say that I have messed up my taxes a time or two. The worst case was when I received a letter back from the IRS that said they owed me more money than I had received with my income tax refund. Honestly, who gets a letter from the IRS that says they owe ME more money?!?!
That’s when I knew that I should not file my own taxes. They are obviously too complicated. I’m obviously wasting money with credits and deductions that I could have been taking. That’s when I knew that I should hire an accountant to help me.
A Lifestyle Change
If you’re thinking about a big lifestyle change, you should consider getting tax advice from a professional. This could be retirement, starting a business, or even having your wife stay home with the baby.
Whatever the scenario, it can be a good idea to get a tax professional so that you know what to expect and you’re not surprised a year later when you’re actually filling out your tax return. Many scenarios could involve you having to pay expected taxes rather than having taxes withheld, so make sure that you consult with someone who can help you plan accordingly.
If you choose to continue doing your taxes on your own, you can get many of the popular tax software programs such as Turbo Tax to check your work for you and double check that you are earning the right amount for your income tax refund. Get your biggest tax refund, guaranteed. Download TurboTax® for Mac now.