www.taxprofessionals.com - TaxProfessionals.com
Posted by Tiffany Gaskin

When Not to do Your Own Taxes

When Not to do Your Own Taxes

Money is a big part of humanity because it causes more problems than work, family, and health. In addition, the IRS expects you to file your annual tax between March and April. While you are yet to decide if you're doing them or hiring someone. Hiring someone is easier but comes at a cost. 

However, it reduces the complexity of the situation. Your part as a taxpayer will be to gather the documents for the form. Why you're contemplating what to do, here is when not to handle your tax duty, instead hire someone.

You're Self-Employed

Filing taxes as self-employed is tricky. A self-employed person needs to file the taxes themself since there is no employer to withhold the tax from their monthly paycheck. It is not easy to track all income and deductibles at the same time, calculating quarterly taxes. You must understand deductible expenses, account for inventory, estimate taxes, and calculate stock depreciation; hiring someone is better.

You've Had a Significant Life Event

Some situations that put you in complex tax matters are things like getting married, divorced, having a child or children, relocating, running a startup business, buying or selling your property or inheritance. They alter your tax filing status, deductions, credits, forms, and other parts. This is a good time not to do your own taxes; instead, hire a professional.

Do You Have Foreign Bank Accounts, Investments, or Income

Suppose you operate in international banks; investments for income and tax filing requirements are complex. In addition, they attract higher penalties of up to $60,000 plus other criminal charges like failing to display documents. This is another issue that requires a tax professional instead of doing them yourself.

You Want to Save Money 

You may be scared of the cost of getting a professional but think of the interest you can make. These people can save money by analyzing each situation, planning, opportunity, and gaps to make gains. However, the chance of saving money depends on your tax situation and complexity. Your chances are low if you earn interest from a savings account or your job's income. But if you have a complex problem, avoid doing your own taxes to save money.

Uncle Sam Will Audit You

When you get a message from the IRS about an audit, it is best not to do your own taxes. The notice usually involves Uncle Sam asking for more money through penalties and interest or needing to revisit your unreported taxable income. Either way, this situation requires someone with experience and knowledge to coach you. If not, you may end up paying more fines than expected.

You Invest in Crypto

Cryptocurrency transactions are gaining attention, and the IRS has breached the anonymity padlock. Presently, digital coin traders pay taxes, and the filing and record keeping is complex. The IRS mandates traders to give tax forms to people they transact in crypto for goods and services. Many trades and transactions in the blockchain are considered taxable. When you're in the crypto sphere, it is difficult to keep track of tax liability, making it a good scenario to hire someone. 

Do You Run A Small Business, Or Are You A Gig Worker

Running a business and remaining up-to-date on tax liability is a hectic task. Every activity in a company has tax implications, even as an independent contractor. With this in hand, it is time not to do your own taxes; instead, hire a professional. Many factors affect your tax amount and liability. In addition, they have different rules to account for expenses and tax liabilities for employees, spouses, or kids. For your small business to succeed without drawing tax attention, you need not do your own taxes.



Tiffany Gaskin
Contact Member