CPA: 5 reasons to hire an accountant to do your taxes

As my own business grew and changed, I started entering into different arrangements with other business owners. On top of that, I began segmenting some of my own business activities, creating different entities for various activities. Hiring an accountant to help manage all of the different expenses made a lot of sense, especially because business filing deadlines are different from personal filing deadlines. For example, let’s say it takes you 10 hours to do your taxes, and your time is worth $100 an hour.

The tax structure of your small business can also determine the complexity of your accounting needs. Additionally, as your business grows, so do the scope and complexity of your financials. An accountant can be by your side during this time to ensure everything remains compliant and accurate. As a trusted professional, a good accountant will be able to answer important questions that arise not just during your annual consultation, but at other times during the year. Professional tax firms usually offer assistance in case you are audited.

How To Find a Tax Accountant

But when your return is more complex, you might find it’s worth hiring a professional — someone who can save you not only time and stress but also money. CPAs can advise you on whether the event has tax implications, help calculate the value of the business, or prepare financial statements for a sale. CPAs can prepare tax documents, file tax returns, and strategize ways to minimize your tax liability for the following year.

These more advanced programs have the ability to quickly scan your information and organize line items and forms correctly. By automating much of the data entry and organization, there’s less chance for human error to hurt your tax return. Good tax preparation software walks you through the process very quickly and easily. For those who have only a few deductions, sources of income, or investments, there is little need to sit down with an accountant to sort it all out. During tax season, you may see large accountancy firms advertising a low cost to help you file your income taxes. However, this low costs generally applies only to a basic return, and you will be charged more if you have any complexities such as interest income or stock dividends to report.

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As with everything about income taxes, however, some taxpayers might find the program to be complicated. In order to offer free tax filing, the IRS relies on the Free File Alliance, a consortium of private providers, including TurboTax and H&R Block, and income requirements vary by provider. But if you hire an accountant before you need one, your audit may turn out a lot better, especially if the accountant you hire offers audit insurance. If you can get audit insurance, how to hire an accountant all the fees you would have to pay the accountant for helping you during the audit will be waived, and your books will be better prepared to make the audit go smoothly. An accountant using modern accounting software that includes audit trail functionality will be able to provide the IRS with all the information they need. If you don’t have a lot of time to spend on tax preparation or your situation is complicated, hiring a tax professional is generally the way to go.

This may not, however, cover specific fees for certain services and consultations. An accountant can help you look into the tax advantages of the different possibilities, including using your retirement plan as a source of funds or setting up a donor advised fund. If you expect to owe more than $1,000 in federal taxes (beyond what’s already being withheld), consider working with an accountant to make sure you avoid penalties.