Certain things in life are guaranteed, and taxes are one of them. For a lot of individuals and business owners, tax season can be a stressful and overwhelming time. Some individuals and business owners spend an ample amount of time preparing their tax returns, while others choose to hire a tax expert.
There are different types of tax experts with varying qualifications, expertise, and licenses. There are notable benefits of hiring a CPA (Certified Public Accountant) come tax time. The CPA designation is widely recognized as licensed accounting professionals that are committed to protecting the public interest. CPAs are respected and highly trusted professionals who are bound by strict qualifications, experience, licensing requirements and standards. These standards ensure quality services are being offered that can be trusted.
There aren’t many disadvantages to hiring a CPA, although one that is commonly noted is the cost. However, for many individuals and especially business owners, the cost is well worth it.
Why Can’t I Just Do My Taxes Myself?
When it comes to tax time, people often ask themselves, “should I hire a professional or should I do my taxes myself?”
Taxes are like do-it-yourself projects, they seem easy until you get started. Depending on your situation, they can be complex with significant room for error. Individuals who own a business, have a trust, require wealth management services, own rental property or have multiple sources of income and investments could benefit the most from hiring a CPA.
With that said, there are several benefits associated with hiring a CPA that anyone, regardless of their tax situation, can experience.
Keep reading to learn about the benefits of hiring a CPA for your taxes.
10 benefits of hiring a CPA
1. Saves time
Time is a valuable commodity and it can take a lot of time and resources to prepare a tax return. By hiring a CPA to handle your individual or business taxes, you can focus on the things that are important to you knowing that your tax return is in good hands. When hiring a CPA, all you need to do is provide them with your tax-related documents (e.g. receipts) and they handle the rest.
In addition to filing your taxes, a CPA will ensure you are getting the most out of your tax return by applying for all relevant deductions and credits.
2. Eliminates stress
Preparing your own tax return can be stressful!
There is tax software that can be used but they are only as good as the information provided. It can be overwhelming to know what credits and deductions you can apply. If you aren’t familiar with the tax filing process, it can be easy to unknowingly make a mistake.
When hiring a CPA, all of this stress goes away. No need to spend hours thinking about your tax return or wondering if you made a mistake along the way. The benefit of hiring a CPA is that they will handle everything from preparing your tax return to submission and even help with an audit.
Read our complete article, “Can I just file my taxes myself using a software program?”
3. Saves money
One of the disadvantages of hiring a CPA is the cost. However, in many cases, hiring a CPA can save you money in the short and long term.
CPAs are tax professionals with expertise in everything from credits and deductions to penalties. The benefit of hiring a CPA is that they will ensure that you are in the best situation, while also advising you on how to plan for the future.
4. Knowledge of tax law
Tax laws and legislation for individuals and businesses are constantly changing from year to year. While there are many unofficial guides published on the internet, it can be hard to know if those are accurate.
CPAs are trusted experts when it comes to tax laws as they are required to stay up-to-day with all requirements and relevant legislation.
Hiring a CPA is beneficial as it can help to mitigate any issues, confusion or uncertainty that you may have when it comes time to file your taxes. CPAs can prepare and file taxes per local, state and federal laws.
5. Maximize your credits and deductions
When it comes time to file your taxes, there are several credits and deductions that individuals and businesses can claim. In fact, there are so many that it can be overwhelming to know which ones apply to your situation.
The benefit of hiring a CPA is that they are not only familiar with all the different credits and deductions but they can then use that knowledge to apply it to unique and individual circumstances.
This allows CPAs to help maximize the credits and deductions on your tax return in a way that generic tax software or individuals aren’t able to do to the same extent.
CPAs can become intimately familiar with your specific situation. The benefit is of course that the more deductions and credits you are eligible for, the more you can reduce your tax burden.
6. Avoid Tax Penalties
Depending on your situation, you may be vulnerable to tax penalties and not even realize it.
The most common tax penalties are failure to file taxes, failure to pay taxes and failure to submit taxes on time. Those are not the only penalties, there are more related to certain circumstances. Hiring a CPA can help you stay organized and ensure that your taxes are filed on time and done right the first time.
Avoiding tax penalties saves you money!
7. Personalized Planning and Advice
Another benefit to hiring a CPA is that they can provide tailored and strategic tax planning advice that is beneficial for current and future tax returns.
Certain things can be done at specific times of year that can help you save come tax time. A CPA will know what those are and when they need to happen. A CPA can also help individuals and businesses get organized in a way that eliminates the stress associated with tax season.
A CPA can also help new business owners or individuals who have experienced a life-changing event with strategic planning expertise. This can help ensure that credits and deductions are being maximized and all required documents are being filed.
CPAs are experts in all aspects of tax returns, which makes it easy for them to know exactly what individuals and businesses need regardless of the situation.
8. Get ahead of the next tax season
A CPA can help you get ahead of the upcoming tax season and plan for your tax obligations.
This is especially important for small business owners or individuals who are self-employed. A CPA can provide advice and guidance so that you are not only better organized but more prepared for the upcoming tax season. The benefit of this is that it will not only save you time in the future but it can potentially save you money.
9. Stability
Hiring a CPA Cedar Rapids can provide a lot of stability, especially since taxes are something that comes around every single year.
There is a lot of value in having someone you can trust ready to handle your taxes when the time comes. Another advantage of CPAs over other tax experts is that they are available year-round since they often provide a diverse range of financial services. This is beneficial as tax questions can arise at any time, meaning you will always have someone to go to when you hire a CPA.
10. Reassurance during life changes
As the saying goes, life happens. In today’s fast-paced society, people’s lives rarely stay the same year-to-year, from changing jobs, getting married, having kids, getting divorced or buying a house.
All of these exciting and stressful life events can impact your tax return. The benefit of working with a CPA is that they can provide reassurance during life changes. They will ensure that you aren’t missing anything when it comes to tax time and make sure that you aren’t vulnerable to any tax penalties.
People also ask…
What are the advantages of using a CPA?
The advantages of using a CPA are plentiful. As professionals, they are tax experts. They file hundreds of tax returns every year for a wide variety of individuals and businesses with varying circumstances. The advantage of hiring a CPA is that they handle the complexity and chaos associated with your tax return while saving you time and money. They are available year-round to answer questions and help you plan for tax season.
What are the disadvantages of using a CPA?
There are few disadvantages to using a CPA. However, hiring a CPA is more expensive than doing your taxes yourself. Keep in mind, hiring a CPA is an investment, one that often saves individuals money in the long run.
Is a CPA actually worth it?
Hiring a CPA is worth it as it takes all the stress away from taxes. All you need to do is provide them with your documentation (i.e. tax slips, receipts) and they take care of the rest. Working with a CPA will ensure you never miss a deadline and remain in good standing with the IRS.
When should I hire a CPA?
Anyone can benefit from hiring a CPA, regardless of their situation. The more complex your tax situation becomes, the more advantageous it is to hire a CPA. For example, individuals who own a business, have a trust, require wealth management services, own rental property or have multiple sources of income and investments could benefit the most from hiring a CPA.
Contact John Freeman CPA at 319-396-5660 to discuss the benefits of hiring a CPA for your situation.