There are plenty of taxpayers that prepare their own individual returns each year. This is not always a bad thing, but when you make just one small mistake, you may risk owing more to the IRS than when you started.
Many taxpayers start out doing everything themselves, whether it’s starting a new business, selling rental property or preparing their returns, and then end up regretting their decisions. Avoid making big mistakes and obvious errors on your return by having a CPA prepare the necessary forms. These mistakes may end up costing you; they might raise that red flag with the IRS and the possibility of an audit. The professional can steer you in the right direction, make sure your returns are done properly, and also advise you in maintaining adequate records. Their advice should save you money.
Here are a few good ideas that hiring a qualified professional might be helpful with:
• Make sure you are maintaining adequate records
• Tax saving strategies
• Up to date with the IRS laws and regulations
• Save you time and provide peace of mind
• Help with structuring a new business
• Maximize your tax deductions
• Represent you in an audit
• Prepare financial statements
• Avoid penalties and interest on late payments
Keep in mind that a good tax professional is essential to filing an accurate return. Make sure the person is licensed, reputable and knowledgeable in his field. Remember though, that whoever prepares your tax return, ultimately it is your responsibility to review your return and to make sure that the information is accurate and that the numbers are what you provided to your accountant.
ACTION ITEM: Ask friends and family or business associates to refer you to their CPA.
Thomas F. Scanlon, CPA, CFP®