- Have any questions?
- (302) 648-5488
- info@encompassde.com
Top 4 Reasons to Hire a Professional Tax Preparer
The Top 3 Benefits to Outsource Your Payroll
February 12, 2016
The 4 Best Tax Benefits to Marriage
February 19, 2016Top 4 Reasons to Hire a Professional Tax Preparer
If you’ve ever chosen to file your own tax returns, you know it can be one of the most stressful and time-consuming things you’ll ever endure. There are countless laws to consider, and the list of things that are deductible versus things that are not deductible can be confusing and challenging. Often times there are thousands of dollars left on the table in missed deductions and erroneous filings. This is where hiring a professional tax preparer comes in: someone whose sole job is to ensure the most accurate tax filing with the experience and knowledge that most individuals simply do not possess. There are plenty of advantages to hiring a professional, which are listed as follows:
1.Filing Taxes can be Extremely Time Consuming
According to the IRS, the average person would spend just under 25 hours (24.7 to be exact) completing their tax returns. To put that number in terms of expected value, if we assume the average person’s time is worth about $25, that adds up to around $1,300 overall. In contrast, hiring a tax preparer to save you those 25 hours would cost less than 10% of the expected value of that time.
2.Tax Preparation Fees can be Deductible
Fees associated with tax preparation can be deducted as long as certain requirements are met, specifically if these costs you’ve incurred are at least 2% of your adjusted gross income. For instance, you may be able to deduct the mileage you drove to meet with your tax preparer, as well as the postage you paid to mail documents to your tax preparer (and the postage you paid to mail your tax return to the IRS and state tax agency). These things may seem small, but any money saved can be crucial.
3.Finding Deductions That Would Otherwise be Missed
Everybody’s situation is different, with subtle nuances defining what exactly a person is eligible or not eligible for. Electronic solutions like TurboTax are good for basic returns, but by no means are reliable to scour your personal situation and find every deduction possible. Especially important during tax time is ensuring your filings are handled promptly, correctly, and with care. Hiring a professional tax preparer will ensure that the human element will be present, and that the finest details that would otherwise be missed are accounted for. In addition, in the off chance that you are audited (only 1% of taxpayers are audited annually), having a professional tax preparer can help streamline the paperwork and represent you in front of the IRS, which is crucial to fighting whatever issues you may be facing.
4.Avoiding Mistakes and Convenience
In line with finding hidden deductions, a professional’s sole job is to perform their duties to the highest of their ability. Mistakes in filing can be detrimental to your financial security, and failure to file can lead to IRS action and massive debt. Having an accountable CPA or other tax preparer can take the risk out of these complex filings. Having a professional prepare your taxes is also extremely convenient and time-saving (see point 1). This convenience is an underestimated factor, as many young people have never had to sit down and file their own taxes yet. That first experience can be traumatizing, frustrating and overwhelming. The choice to utilize the convenience a professional preparer provides is a prudent one, and one that should be seriously considered.
There are multiple options when it comes to tax time; file your own taxes, use an electronic service and hiring a professional preparer. For those whose tax returns are extremely simple, perhaps an electronic service is a better option, but that is debatable. Overall, hiring a professional tax preparer is the most sensible and safe route to file your tax returns in a timely and efficient manner.
Encompass Accounting wants to be your tax preparer for 2016 and beyond. Schedule an appointment today online now at www.encompassde.com/scheduler
Author: Tyler Nolan, staff writer for Encompass Accounting, Inc. Twitter: T_Nol_
9 Comments
In your article, you stated that according to the IRS, the average person would spend just under 25 hours (24.7 to be exact) completing their tax returns. To put that number in terms of expected value, if we assume the average person’s time is worth about $25, that adds up to around $1,300 overall. My sister has been having a lot of issues with getting all of her tax documents together since her husband died this past year. I wonder documents would be needed in order to receive help from a tax preparer.
Hi Derek,
Thanks for your comment and sorry to hear about your sister’s husband. Your sister should get all of her tax documents together that she received for 2016 as well as her 2015 tax returns. The amount of documents will depend on each person’s different tax situation. A tax preparer will be able to give your sister an exact list after speaking with her about her exact 2016 income tax situation.
The most common forms that show income would be W-2, 1099’s, and any business income. Then, the most common forms for deductions would be 1098’s (including mortgage interest statement), charitable donations, and any business expenses.
If for any reason your sister lost or cannot easily obtain these forms a tax preparer can request a Wage and Income Transcript from the IRS as well as a transcript of prior year tax returns if needed.
I appreciate that you point out that one of the benefits of hiring a professional tax preparer is that they can find deductions that a program might over look. I can see why this would be important to have if you have a complicated financial situation. My wife and I recently invested in a a duplex and aren’t sure how to do our taxes for next year. I’ll have to recommend that we use a professional to help us out.
I really like how you mentioned that using a tax preparation service can help you find deductions that you would have otherwise been aware of. I’ll admit that I don’t know much about taxes, so this would be a huge benefit to someone like me. It even seems like you might be able to qualify for a deduction that is larger than the fee you pay your tax preparer thus saving you money overall.
My husband and I aren’t the best at doing taxes and it took us a very long time to get them done. I like that with a tax preparer, it can save you a lot of time by giving the task to someone that has more experience. We will definitely be using this kind of service for this coming tax season so we don’t have to stress about the time it’ll take.
I like how you said that hiring a tax preparer will add the human element to what you are doing and helping you find all of the deductions that you actually deserve. Considering how much money you pay to the government it makes sense that there would be a lot that you could qualify to receive if you are willing to spend some time looking for it. Having somebody do it for you would be even better!
Thanks for going over some benefits of getting a tax preparer. It’s good to know that the fees for the preparation service can actually count as a deductible if you meet some requirements. I’m interested to learn more about this and some factors that could be taken into account depending on what the process was like.
Thanks for sharing the information with us. Among the 4 reasons I personally think #1 and #4 are most important. No doubt filling tax is time-consuming, moreover, if you made mistakes then you are in more trouble. So I think it’s wiser to hire a professional tax preparer. It will save both time and money.
Hiring a tax preparer sounds like a great idea. I love the idea that they could help me find every deduction possible for my personal situation. We are hoping to get some extra money next year, so maybe this is a way to do that.