Now that tax season is upon us yet again, it’s time to start gathering all of the necessary information and paperwork required to complete our annual filings. We all have to deal with taxes whether we are self-employed or wage earners with W-2 forms.
And, while most of us would love nothing more than to avoid them altogether, that’s not an option.
So, are you about to do your taxes? If so, you might be wondering if you need any help. It can be tough to do them on your own, and if you’re not sure about what you’re doing, then you could end up making a mistake that costs you money. That’s where tax advisors come in. But, how can you tell if you need one and who you should hire? Keep reading for advice on choosing the right tax advisor for your needs.
Who is a Tax Advisor Anyway?
A tax advisor helps people save money on their taxes. They are experts in the tax code and know all the deductions and credits you might be eligible for. Tax advisors can also help you if you’re self-employed or have other complex financial situations.
Professionals with a Master’s of Accountancy Degree or Certified Public Accountants (CPA) are the most qualified to provide tax advice. However, many other professionals can help you with your taxes, including Enrolled Agents (EA), Tax Consultants, and Certified Financial Planners (CFP).
How Do I Know Which Tax Advisor Is Right For Me?
When looking for a tax advisor, you want to ensure that they are qualified and experienced. You can check the National Association of Tax Professionals website to find a list of qualified professionals in your area.
You should also ask the advisor about their experience with different types of taxes, such as individual income taxes, small business taxes, or estate taxes. They should also be aware of any tax code changes.
Are There Types of Taxes?
There are three types of taxes that you will likely encounter during your lifetime: federal income tax, state income tax, and local/city income tax. Depending on where you live, you may also have to pay property taxes or sales taxes. So you see, that’s a lot of taxes! That’s not even including the taxes on your investment income, self-employment earnings, or pension payouts.
Why Do I Need Help?
There’s no such thing as a one-size-fits-all solution when it comes to taxes. The type of tax help you need will depend on your circumstances. That said, there are certain situations when it pays to get professional help.
Hello, I’m Self-Employed:
With the perks of self-employment come a few extra tax challenges. For starters, you may be responsible for paying both the employer and employee portions of Social Security and Medicare taxes. You also may owe additional taxes on your income because you’re not sharing it with anyone else. And don’t forget about the home office deduction!
In fact, the rules for self-employed taxpayers are so complex that many people hire an accountant just to make sure they’re doing everything correctly.
Yay, I’m Finally Retired:
If you’re like most people, you’ve been looking forward to retirement for years. But did you know that your tax situation can change dramatically once you stop working? For example, you may no longer be able to deduct certain expenses, and your income tax rate may go up.
So, just because you’re retired doesn’t mean you can coast through tax season unscathed. If you have earned income from a retirement system, you may be required to pay taxes on it and use any deductions or credits available to retirees to the maximum.
All this is why it’s a good idea to sit down with an expert before you hang up your work gloves for good.
Sigh, It’s a Divorce:
A divorce may be emotionally and financially devastating, especially if children are involved. And on top of all the other challenges, you’re facing, there’s also the task of untangling your finances from those of your ex-spouse. It is where a tax expert can help.
They can help you figure out who gets what deductions and how to file your taxes going forward. It’s an uncomfortable topic to address, but it’s also necessary.
Getting the Most out of Tax Advice
When you work with a tax advisor, there are a few things you can do to ensure you’re getting the most out of the experience:
Starting from Square One:
First, be clear about what you want from your advisor. Do you need help filing your taxes? Are you looking for someone to give you advice on long-term planning? Before you get started, double-check that you and your advisor are in agreement about what to anticipate.
Here are My Documents:
Provide your advisor with all the information they need. It includes not only your financial information but also any documentation related to your taxes, such as receipts and records of any deductions or credits you’ve claimed in the past. The more information your advisor has, the better equipped they’ll help you.
Be Open to Their Suggestions:
An experienced tax advisor will have a wealth of knowledge and experience. They may be able to suggest strategies that you’re not aware of. Be open to their suggestions and give them serious consideration. Remember, they are there to help you.
Don’t Be Afraid to Ask Questions:
If you don’t understand something your advisor says, don’t be afraid to ask questions. It’s better to get clarification than to make a mistake on your taxes. Also, if there’s something you’re not sure about, such as whether or not you should claim a certain deduction, asking an expert is the best way to get the answer you need.
So, you see, the tax advisor guy is a real money-saver! If you have any queries regarding your taxes or if you’re simply seeking someone to assist you with them, give him a call. You won’t regret it!
The bottom line is that getting tax advice from an expert is a smart move, no matter what your situation may be. So don’t try to tackle taxes on your own this year; get some expert assistance. We promise that you will thank yourself when you have time to reflect on this decision.