5 Reasons to Hire a Tax Advisor
Did you know that 33% of taxpayers use commercial software to do their taxes? Free tax software options are an attractive option to many, but are they the best option?
In most cases, hiring a tax advisor is the best method. Not sure if this method is right for you? If you fall into one or more of the following five categories, consider getting help from a tax expert.
1. You Own a Small Business
Owning a business or having your own side hustle comes with its own tax implications. A tax advisor can help you with tax write-offs and more.
For example, if you work for Uber or sell products on Etsy or similar sites, you might need special help during tax season. These side hustles require a 1099 tax form.
2. The IRS Contacts You
Getting contacted by the IRS might mean you need tax advising. The IRS could audit you or ask for substantiation of expenses related to one of your purchases.
Even something as simple as a substantiation can cause a big headache if you handle the process wrong. When you opt for tax help, you’ll avoid the risk of giving the IRS the wrong information.
A great tax advisor understands how the IRS operates and can help you navigate their language.
3. You’re Planning for Your Child’s Future
Hiring a tax advisor can do more than help with tax preparation. For instance, if you’re planning for your child to go to college, an expert can help you fill out the Free Application for Federal Student Aid (FAFSA).
Your child mustn’t have income or unwanted assets in their name when filling out this application. Although it is good for tax planning, it can affect how much financial aid your child receives.
4. You Own Rental Properties
Tax filing can get a little tricky when you own rental property. You might be entitled to deductions that you aren’t aware of in which a CPA can help.
It is recommended that you opt for tax advice for at least the first year of owning rental property. If you own more than one piece of real estate, you should visit a tax advisor at least once a year.
You’ll need to know how to choose a tax advisor that can work with you in the short-term and long term.
5. You Self-Direct Retirement Savings
There are traditional methods of saving for retirement and self-directing options like real estate and cryptocurrency investments. Tax filing with these investments is better off left to the professionals.
Don’t Wait Until It’s Too Late to Hire a Tax Advisor
Hiring a tax advisor comes with a lot of advantages. If you wait until it’s too late to hire one, you could be left with income losses and tax problems.
The last thing you’ll want is to get in trouble with the IRS. To avoid this issue and file your taxes correctly among other things, hire a tax advisor now! Personal finance is not an easy topic to understand. Check out our other blog posts for more informational guides like this.