With so many options available now, it’s often unknown or misunderstood why one hires a CPA for tax preparation. Hiring a CPA can save you time and money, and is the right choice for filing responsibly. The best thing to do if you are wondering if you’ll benefit from the services of a CPA is to contact one directly. A local CPA like Mitch Heifler of Miami, Florida, will assess your situation and let you know if hiring a CPA is the best choice for you.
The main reason to hire a CPA is that they provide a level of professionalism and responsibility that ensures your unique situation will be taken into account. Software programs that allow for self-filing follow a series of basic questions that are meant to guide you in the right direction. However, if your life isn’t basic, neither are your taxes. Tax laws and credits change every year, and although this type of service may be aware of the recent changes, a computer cannot ask the necessary follow up questions that will determine whether you are entitled to a large deduction due to a recent addition to the credits available, or that you are in danger of misfiling because of a serious alteration in tax law and an unusual living situation. Alternatively, there are tax professional services that hire non-CPAs to prepare taxes. While most of these employees do take a course on tax preparation, they are typically temporary, part-time employees with little to no tax filing experience. You may be lucky, and end up with one that has done the research and understands the law, or you may unfortunately lose money or professionalism due to a lack of experience and knowledge of when to ask the right questions.
Owning a small business, for example, allows for some deductions and benefits from the IRS, but reporting your business finances should be treated carefully. Small businesses may be required to fill out numerous forms, and knowing which one applies to you is crucial to filing correctly. The IRS also has qualifications for small businesses, both financially and structurally, so having a professional who can advise you is extremely important. If you are deducting expenses, but the IRS comes back and decides that you do not fall into the small business category, you could end up owing money even though you saw a loss. Being an independent contractor, for example, means that you receive a 1099-MISC from your employer, and expenses are itemized in a very different manner. However, independent contractors typically work multiple positions throughout the year, and it is important to be advised as to what you are allowed to deduct so that you are not left owing more than you should to the IRS. Having multiple jobs or being independent can result in large charges at the end of the tax season if you are not aware of how to handle your records and filing. Additionally, there are occasions where an employer may not file a 1099. In this case, your preparer can advise you on the steps to take so that you may file your income and not be penalized for the oversight or negligence of the employer that hired you.
In the case of small businesses, States also have their own guidelines, which need to be followed correctly. A CPA like Mitch Heifler, who is familiar with the Florida regulations, will be able to better assist you than a national software. If you are in business, filing your expenses correctly and with the proper proof is also a concern. A CPA will know what records are required to support expense information that you can write off, and can help you be prepared for the next year as well. Statistically, small business owners are more likely to be audited than the average American.
A CPA also holds a level of responsibility and audit protection, which means that they communicate with the IRS during audit investigations for you, and take responsibility for supplying supportive documentation to your claim. Think of this as audit insurance that you receive from hiring a professional. Although many non-CPA companies claim they will assist you in the case of an audit, the ever-changing status of employment means that you may have an entirely different individual, one not familiar with your particular situation, trying to advise you on your taxes when the IRS investigates. CPAs are long-term professionals who have studied and made a career out of this type of assistance, so they will likely be there when you have questions in the future.
Another circumstance that can open you up to close investigation is simply having children. There are home situations that lend themselves to the large credits and deductions available. Because of the amount of credits and deductions available for these, and the high number of taxpayers that they apply to, the regulations for these statuses change annually, and have many stipulations attached to them. If you are separated or divorced, you could be in one of the most complicated filing situations one could come across, especially if there are children involved. Custodial questions are a common mistaken or fraudulent issue, and tend to be investigated under the most innocent of circumstances. Claiming Earned Income Credit or Head of Household status can result in the IRS withholding your refund, or taking a very large portion of it back. It could also result in the return of your refund, garnishment of wages, investigation or audit by the IRS, and/or seizure of your return for the following year. If the other parent files falsely, but files before you do, you will automatically be denied and will have to use a different method of filing to dispute their claim. This could take up to three months longer than regular tax filing, and requires proof and documentation that a tax professional will be able to help you organize and support. Not applying for this credit can result in losing large amounts of money in your refund that you may be entitled to. Knowing the laws and having protection from your CPA will allow you to apply for all the credits and deductions you deserve safely and without worry.
A CPA like Mitch Heifler is going to provide you with exceptional service, protection from investigation, ensure that you get the most out of your refund, and only owe what you are absolutely entitled to pay.
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