Why Hire a Tax Professional? (2024)

FAQs

Why is it important to hire a tax professional? ›

A tax professional can look at your past returns to see if any deductions were missed and, if so, amend them for you. You can reduce your risk of an audit. And, if you are audited or the IRS starts asking questions you can't easily answer, a professional tax preparer knows how to deal with the IRS.

Some of the leading advantages of preparing and filing your taxes with the help of a tax professional include: Time savings: Even the simplest of tax returns can take hours to prepare, especially for a non-professional. But with the help of a professional tax preparer, returns can be completed much more quickly.

With so much change, you might have a lot of tax filing questions. That might be when you decide you should pay someone to do your taxes. The good news is by having a tax professional prepare your return, you can leave those questions to someone who knows the ins-and-outs of tax preparation.

Helps You Avoid an Audit

Since a tax pro is less likely to make mistakes on a return and is more likely to know which deductions and credits you're eligible for, hiring someone to prepare and file your tax return can make you less likely to be audited.

Tax Preparers help clients file their taxes and ensure the accuracy of various tax forms. They prepare their clients to be able to pay any needed fees and review financial records. They also calculate tax returns, managing communication between clients and tax authorities.

By evaluating your circ*mstances through an expert lens, a tax professional can make more informed tax planning recommendations. In many cases, this can reduce your tax burden for years to come. Tax prep software is incapable of providing this long-term view and making detailed, personalized recommendations.

For complex issues, such as dealing with the IRS on serious matters, criminal tax matters, or handling tax litigation, the legal knowledge of a tax attorney is preferred over that of a CPA. Their advanced training in tax law and litigation provides the necessary skills in these challenging situations.

The Bottom Line. Individuals with a single employer and few investments may save money by preparing their taxes. Those with business income or rental properties will find hiring an accountant worth their peace of mind and potential tax savings.

What percentage of people use a tax preparer? ›

Nearly one-third (31.4%) are going it alone, while 44% are relying on programs provided by H&R Block or TurboTax. Nearly 22% use a certified public accountant (CPA) to help with their tax returns, while a small percentage (3%) rely on a tax lawyer.

If you have "a complicated tax situation with dependents, investments, or significant assets or charitable contributions," then hiring a professional might be helpful, said Business Insider. That is because "the more transactions you have, the more things you need to take into consideration."

Tax preparers focus on communicating with tax authorities, reviewing tax codes and filing tax paperwork. The primary difference between these careers is that CPAs offer a wider range of services outside of tax preparation.

CPA's Experience and Reputation

Experience and specialization also play crucial roles in determining the average cost of tax preparation by CPA. A CPA with a robust track record or specialized knowledge in areas like international tax law or estate planning may command higher fees.

Tax accountants keep up with legislative changes and help an organization remain in compliance. With in-depth knowledge of how to maximize deductions and minimize tax bills, you save money.

Tax preparers with unlimited representation rights can take new clients regardless of who signed their tax returns. These professionals can also handle audits and appeals for their clients. To hold unlimited representation rights, tax preparers must earn certification as EAs, CPAs, or attorneys.