The digital influence on the tax industry has made it easier to do taxes. But even with that convenience, there are still plenty of hurdles that make it smarter to hire a tax attorney. If you’re having issues handling the intricacies of tax paperwork, use the tips below to decide when it’s time to throw in the towel. Asking for help isn’t mandatory, but it helps to avoid potential problems with the IRS.
4. When The Software Gets Too Complicated
Tax software is available for free online, and isn’t that much more advanced than the paid versions. Usually, the type of advanced options you see in the paid version requires a tax preparer’s knowledge to even use properly. Depending on which software you use, there will always be an explanation for what a specific feature does. That still might not be enough to fully prepare a person for the consequences of ‘guesstimating’ a feature. If you get nervous and don’t understand a lot of the questions in the software, then it is important to get help.
3. During A Tax Year Where You Had Life Changes
Getting married, moving or having children are all changes that need to be noted on a tax form. What seems like simple checkboxes on a form can turn into lost money over several years. To max out your refund, you need to understand how change of life scenarios impact your taxes. There are millions of people that miss out on important chunks of money each year by not optimizing their taxes for change of life options. All of this money adds up and can easily be the difference between vacation money and paying off a child’s tuition.
2. When Dealing With Income From Out Of State
This is probably the hardest thing to deal with when you do taxes on your own. Out of state income is handled differently than your home state, and it is mandatory to report certain amounts. Even gambling winnings past a certain number need to be mentioned on your tax form, so pay close attention to how much income you bring in from sources not related to your job. If you choose to misremember these amounts, the IRS will have no problem helping you with an audit.
1. During An Audit
The audit is usually the point of no return, and long past when you should have booked professional help. But that doesn’t mean that hiring a tax professional is pointless. During an audit, a tax professional can be the voice of reason that you need to get through the process. Find someone you trust with your finances, and stick with them through the audit and beyond.
Tax attorneys exist for a reason, so don’t ignore their value. Tax software is still the go-to for getting the simple taxes out of the way. But when the paperwork starts to get above your paygrade, it is time to make a time saving switch.