Taking the DIY approach could cause you to make errors or miss out on valuable tax deductions and credits.
If you’re not sure whether you gotta hire a tax professional, keep reading.
We’ll also give you a few tips for finding the right tax professional.
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When should you consider hiring a tax professional?
Not everyone needs to hire a tax professional to prepare their return.
But there are many circumstances where professional assistance is probably worth the cost.
You may also qualify to deduct some significant expenses if you dogig workor have self-employment income.
In this case, getting professional tax assistance is worth it.
Often, a big life event will affect your tax bill for subsequent years, according to Adams.
Your gains aren’t taxable as long as you keep the money in the account.
But many other types of investments can complicate your tax situation.
If you’re a landlord, you’ve got the option to typically deduct many of your expenses.
A professional tax adviser can help you navigate the complexities of tax law in these situations.
Say a stray baseball shatters your window.
You replace the window, along with a few others.
“People may not think of those things because all they remember is the baseball broke their window.”
Adams said that he sometimes works with clients who had an unexpected hospital stay or major dental work.
You’re allowed to deduct unreimbursed medical expenses above 7.5% of your adjusted gross income if you itemize.
But itemizing may not occur to you if you’re in the habit of taking the standard deduction.
Which tax professional should I use?
There are four basic types of tax professionals.
Who you should hire will likely depend on how complicated your tax situation is.
Enrolled agent:Enrolled agents are professionals who can prepare tax returns and represent you before the IRS.
EAs must pass a three-part IRS-administered exam, though some former IRS employees can have this requirement waived.
Enrolled agents also undergo a background check and are required to complete regular continuing education.
Tax attorney:A tax attorney is an attorney who specializes in tax law.
They can prepare tax returns and represent you before the IRS.
Uncredentialed preparer:This is a broad term for anyone who has a Preparer Tax Identification Number.
A tax preparer who hasn’t done so can’t represent you before the IRS in any circumstance.
you’re able to vet the person’s credentials by searching their name on thisIRS directory.
