For the 2020 tax year, filing your Federal tax return was opened by the IRS on Feb.12, 2021. Your tax return for 2020 is due by April 15, 2021. The question that comes up annually for many people is do you want to prepare your tax return yourself or do you want a professional tax preparer to prepare your return for you?
When your mission is to get your taxes done and pay as little as possible, completing your tax return on your own can be one way to go. Many people that are seeking to save money on tax return preparation file their taxes at IRS.gov Free File. Other people will file their income taxes with the free version offered by one of the giant tax preparation companies offering free tax filing for basic 1040EZ tax filers. This method is generally a good choice if your tax return is simple.. However, even if your tax return is not complicated, it may payoff to do some research on different tax preparation services to see which businesses have the best reputation and then check with them to see if they may be able to help you save money on your income taxes or get you more money back than you anticipated.
There are more multiple online platforms offering free self-service tax filing today than even last year. However, another option is to hire a professional . You will be happy you made the choice to employ one of them instead of doing your income taxes yourself or going with one of the free filer online platforms. An Enrolled Agent is a person whose licensure is issued by the US Department of Treasury and is licensed to practice before the Internal Revenue Service. Most Enrolled Agents are degreed accountants and have earned the privilege to represent taxpayers in tax disputes with the IRS.
Prior to working on your own taxes or using a free online tax filer option, look below at the top considerations why it makes good sense to employ a Enrolled Agent instead.
You Do Not Have Simple or 1040 EZ Tax Picture
When your tax picture is straight forward and totally uncomplicated you can successful file your own taxes very easily in most instances. According to most EA’s (Enrolled Agents), in general if a person’s income is solely W-2, they do not have dependent children or deductible expenses that they can claim, preparing taxes and filing them by themselves is the top option.
However, if you are business owner, you have dependent children, and you earn 1099 income or you have a more complicated intricate tax picture, more than likely you will improve your tax preparation and filing greatly by employing a tax professional to prepare your tax return.
When It Comes to Preparing and Filing Taxes, The Ultimate Goal is to Save Both Time & Money
No matter if your tax return is a basic 1040EZ, or it is an incredibly complicated tax return, if you make the decision to prepare and file your personal or business tax return yourself, there is a possibility you may make one or more errors doing so. The bottom line about taxes and your finances is that it is the one place you should never ever make a mistake.
Enrolled Agents amend tax returns for the self-preparer tax crowd on a regular basis. When a DIY tax preparer receives a notice from the IRS, they normally stop their short-lived tax preparation career right then and make an appointment with an Enrolled Agent to address the problem in the notice they got in the mail. When a person that did their own taxes owes thousands of dollars due a mistake they made when they prepared their tax return, they often tell their Enrolled Agent, “I just did not understand the questions in the IRS booklet I read that explained how to complete my tax return”. Hiring an Enrolled Agent to prepare your personal and business tax return is the wise way to go for several good reasons.
Tax Laws Are Law for a Reason
There is a straight-forward, compelling factor why a tax preparer charges the fees they charge to complete a person’s personal Federal and State tax return and a business’ owners Federal and State tax returns and it is because tax laws are complicated, difficult to comprehend and hard to comply with if you do not know how to prepare your tax return correctly. Each year there are changes to the tax code and this fact along with the complexities of tax preparation make it difficult for the average person to prepare their own personal or business tax return the right way.
Enrolled Agents are required to keep up their proficiency in tax by completing a minimum of 24 hours of continuing education annually. The fact of the matter is if a professional tax preparer does not maintain their competency on annual basis, they will produce tax returns that are not worth the paper they are printed on.
You Demand the Finest Attainable Tax Return Preparation with Zero Mistakes and the Minimum Amount of Tax Due Possible
Everyone naturally desires perfect tax return preparation with zero errors and the least amount of tax due allowed by law. When a tax refund arrives via ACH in your bank account it screams possibilities that include paying off bills, adding to savings or perhaps a nice vacation.
A person’s tax return is the basis for several potential tax credits, and it is the base document for several important financial transactions in life including a home mortgage application, general loan applications and student financial aid. If you do not file your income taxes and file them the right way, all those needs and requirements when it comes to financial transactions a person does year in and year out are not possible. The best possible move you can make when it comes to filing your income taxes is to hire a professional tax preparer that has a good reputation.
You Desire Personal Tailored Guidance for Long Term Tax Planning
If you have a basic tax return now, it does not mean your tax situation is static. It is worth the investment to employ a Enrolled Agent, particularly if you anticipate your tax status is going to change next year.
In the coming year if you are going to change jobs, purchase a new home, planning for retirement or there most likely will be some type of other critical financial matter that may impact your tax return next year, a tax professional can assist with tax planning now so you are ready for your future.
People that do not use a tax professional to do their tax return miss out on the chance for excellent guidance and help with long term tax planning. A taxpayer may have the basic tax return but does not know about the potential long term tax benefits of saving for retirement with a 401(k) savings plan, for example. An Enrolled can demonstrate the positive impact a 401(k) savings plan would have had on their current tax return if they had been participating in one and discuss the benefits of a 401(k) on their tax return for the coming year.
Doing your own tax return might be more expedient and cost less, particularly right now, but it just takes one big mistake to turn handling it yourself into a financial disaster that could cost you far more than the cost of a tax professional’s tax preparation fees.