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Why You Shouldn’t Do Your Own Taxes Anymore

·7 min read
RichVintage / Getty Images/iStockphoto
RichVintage / Getty Images/iStockphoto

You’ve probably heard some variation of this: You wouldn’t do your own brain surgery, so why would you do your own taxes if you’re also not a tax expert? Plenty of accountants agree that you shouldn’t do your own taxes, said Dave Du Val, chief customer advocacy officer at tax audit defense firm TaxAudit.

Be Prepared: All the New Numbers You Need To Know for Planning Ahead on Taxes

It is true that most people can fill out a tax return on their own or with the help of tax software, Du Val said. But that doesn’t mean there aren’t benefits to hiring a tax accountant to help you.

Learn the signs you really do need professional help with your taxes, and just what you’ll get when you consult an expert.

Last updated: Jan. 28, 2021

Finishing calculation for tax form on April 15 concept, with calendar in front of an accountant.
Finishing calculation for tax form on April 15 concept, with calendar in front of an accountant.

You Get a Return the IRS Is More Likely To Trust

One of the big benefits of hiring an accountant to do your taxes is the way the IRS will treat your tax return. “The IRS will be more accepting of a return prepared by a professional,” said Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting.

That’s because most tax preparers won’t risk their reputations to claim a questionable deduction for a taxpayer, he said. “The IRS recognizes that and feels more comfortable with a professionally prepared return.” Just make sure you work with a reputable professional with the right qualifications and credentials, such as an enrolled agent or certified professional accountant, Luscombe said.

Man relaxing in his chair and enjoying the view from office window.
Man relaxing in his chair and enjoying the view from office window.

You Get Peace of Mind

What are you most scared of by filing your own return? Likely, it’s getting something wrong.

By hiring a tax professional, “you get someone who knows tax code, what can and can’t be deducted,” said Eric Nisall, an accountant and creator of Bookkeeping for Bloggers. You get peace of mind that someone with a lot more knowledge about taxes has prepared your return.

In addition to having the right credentials, it’s also important that the person you hire is someone you feel comfortable with, Nisall said. Your tax accountant should have experience working with people in similar tax situations as yours and should be able to speak to you in terms you understand. “If you’re worried, that means that person is not right for you,” Nisall said. “That’s why you’re paying somebody. You’re paying somebody to make sure it’s done the right way.”

See: Tax Mistakes Everyone Makes — and How To Avoid Them

Business Communication Connection People Concept.
Business Communication Connection People Concept.

You Get Help Maximizing Deductions

Tax software can help pinpoint the credits and deductions for which you qualify. But a tax pro can help you figure out how to get the most out of tax breaks.

For example, if you have a home office, a tax pro knows there are two methods for claiming the home office deduction, Du Val said. The pro will ask questions about your situation to figure out which method is best for you. Or, if you own a business, a tax accountant will help you decide which year you should claim expenses to reduce your tax bill — not just for one year but for years to come. “There’s a bit more we can offer in that area,” Du Val said.

Check It Out: Most Popular Things To Do With Your Tax Refund — and How To Do It Smarter

A 2018 Federal income tax laws W9 form.
A 2018 Federal income tax laws W9 form.

You Get Help Taking Advantage of Tax Law Changes

An accountant will let you know about changes to the tax laws during the year. “They’ll send emails to clients with things you can do before year-end to take advantage of tax law changes,” Luscombe said.

Sometimes changes to tax laws happen after tax preparation software companies such as TurboTax have issued their software for the year. A tax accountant would know about these extensions and likely amend your tax return if it had already been filed this year to take advantage of those extended tax breaks.

Stay Safe: How To Protect Your Tax Refund From Being Stolen

Mature woman sitting at table with financial advisor.
Mature woman sitting at table with financial advisor.

You Get Help Taking Advantage of Tax Loopholes

A tax professional can help identify tax loopholes that could save you thousands of dollars. Tax software will likely alert you to deductions or credits you can claim if you’re paying college tuition for a child. However, “using tax software might not alert you to the wonderful benefits of a 529 plan for your kids’ education,” Luscombe said.

A 529 college savings plan lets you save money for your child’s education. Some states will even let you deduct contributions to a 529 plan. The money typically is invested in mutual funds or other interest-earning investments. You can then withdraw that money tax-free to pay for qualified education expenses. A tax pro will point out tax loopholes like this that will help reduce your tax bill for years to come.

Find Out: 9 Legal Tax Shelters To Protect Your Money

Just put your signature here! Confident young man in shirt and tie holding some document and pointing it while sitting together with cheerful young couple at the desk in office.
Just put your signature here! Confident young man in shirt and tie holding some document and pointing it while sitting together with cheerful young couple at the desk in office.

You Get Someone Who Knows Exceptions to the Rules

A good accountant or tax preparer knows there are exceptions to tax rules that you or your tax software might miss when doing your return. A tax pro would be able to help you take advantage of this and other exceptions to the tax code.

Beware: 15 Secrets You Should Never Keep From Your Tax Accountant

Shot of an investment advisor businesswoman consulting with her clients.
Shot of an investment advisor businesswoman consulting with her clients.

You Get Year-Round Support

One big benefit of hiring an independent accountant is that you get support 365 days a year — not just assistance as you file your return, Nisall said.

Tax software companies such as TurboTax and TaxAct provide customer service and support. But it’s not the same as calling an accountant who knows your name and your individual tax situation. “You get that personal service,” Nisall said.

What’s Yours? Here’s the Average IRS Tax Refund Amount

Couple on meeting with financial advisor.
Couple on meeting with financial advisor.

You Get Proactive Advice

Another benefit of working with a tax accountant is the proactive advice you get throughout the year — not just when you file your return, which might be too late to make tax-saving moves. “Rather than waiting until after complicated financial matters take place, hiring a tax professional as you consider options is a great way to get on top of your tax situation,” said Megan Brinsfield, a CPA and director of financial planning for Motley Fool Wealth Management.

For example, if you’re thinking about opening a business but concerned about the costs, a tax professional can help choose the right business structure for tax purposes and let you know which documents you’ll need to maintain and what deductions you can claim. “The same proactive planning could come in handy if you are thinking of renting out your home, improving your home, relocating to a different state or even buying a car,” Brinsfield said.

You Too? Here’s the No. 1 Thing Americans Do With Their Tax Refund

Mid adult couple of African descent talking to a man in a suit who is talking about finance plans and insurance.
Mid adult couple of African descent talking to a man in a suit who is talking about finance plans and insurance.

You Get Help as Your Tax Situation Changes

When you have a major life event such as a marriage, birth of a child or divorce, it’s a good sign you need professional help filing your taxes. Your tax situation will likely change, and an accountant can help you plan for and deal with those changes.

For example, if you are divorced, it can be confusing figuring out which parent can claim the children as dependents. “There’s some tax planning that can go on in those situations that can get complicated,” Luscombe said. “A software won’t necessarily ask you all of the questions. A professional can’t always ferret out everything, either. But a professional is more likely to see the person before them and discuss the family and know more about them.”

Don’t Throw Them Out: These Are the Receipts To Keep for Doing Your Taxes

Business meeting with financial advisor.
Business meeting with financial advisor.

You Get Help During an Audit

Just because a tax professional prepares your return doesn’t mean you won’t get audited. Of you do get audited, however, tax preparers can help if they are authorized to represent you before the IRS. You’ll want to ask if they are.

A tax professional might charge between $2,000 and $5,000 to represent you in an audit, Du Val said. It can be worth the money, though, because the professional will understand the process and help you avoid sabotaging yourself. “You’ll find most seasoned tax pros go to an the audit without the client so the client doesn’t ramble and get themselves in trouble,” Du Val said.

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This article originally appeared on GOBankingRates.com: Why You Shouldn’t Do Your Own Taxes Anymore