Do you need a CPA to help with your tax preparation? Not necessarily, but you do if you fall into one of these categories.
Getting your taxes done is a ritual most people follow some time between the end of January and the middle of April. Some will attempt to do the job on their own,
but others will choose to have it done for them. For some, going to a chain tax preparation store is the ideal option, particularly if their return is fairly simple. Others may need the help of what is known as an Enrolled Agent. The final tier of the help available to individuals and businesses is a Certified Public Accountant. Here are some times when you would be best off using a CPA.
First, this is the best option if you inherit a large sum of money. There can be significant tax penalties for this, but you can also get into a lot of trouble if you do not file correctly. Someone who understands the laws must reckon with all of the issues that a large inheritance brings. A CPA can help you with more than just tax preparation in this case. He or she can also help you set up an estate plan to protect that money from taxes as much as humanly possible.
You also need a CPA if you start or run a small business. In fact, if possible, meet with one before you start the business to make sure you have all of your ducks in a row when it comes to taxes. Once you have started your business, you should use a professional when the time comes to prepare your taxes. Taxes for a business, even a small one, are incredibly confusing, and one small mistake could cost you thousands of dollars or put you in line for an audit.
For business owners, a CPA also gives the benefit of preparing for audit. While you hopefully will not be audited, if you are, properly maintained records are vital. This is where an accountant can help. With the right records and properly prepared taxes, an audit is a huge hassle, but not a catastrophe.
If you have back taxes that you have not prepared and filed, you may be best off with the help of a professional. After all, you want to make sure that those taxes do not come back to haunt you, and that you pay the minimal amount of penalties.
A CPA is also the place to turn if you have errors on your past tax preparation. Sometimes, if you take the effort to make amends for these errors before they are caught, the IRS is going to be a bit more lenient. However, filing all of the proper forms in a timely way is sometimes difficult, thus lending itself towards a professional.
As you can see, not everyone needs an accountant for tax preparation. However, those that do need one really stand to benefit from the expertise of this type of professional. So, evaluate your current situation to determine if you need a CPA, and, if you do, build a relationship with one sooner rather than later.
