Tax Season: When to Bring in a Pro
Doing your taxes can be a daunting task, especially when you have multiple income streams or experience significant life changes. While DIY options are available, there are situations where hiring a tax professional is well worth the investment.
Multiple Income Streams: A Recipe for Complexity
When you receive money outside of your primary job, such as from selling a home or owning a business, it’s essential to consider seeking expert help. According to Erica James, a certified public accountant and certified financial planner, having a conversation with a tax professional can help you navigate the complexities of tax laws and maximize your savings.
Business Owners: Don’t Go It Alone
After opening a business, it’s crucial to work with a tax professional to ensure you’re taking advantage of all eligible deductions. A savvy tax pro can help your business retain more of its profits, says Maria Castillo Dominguez, a CFP and founder of Valoria Wealth. With a business, managing deductions can get complex, and a tax professional can save time and money by ensuring accuracy and maximizing deductions.
Freelancers and Side Hustlers: Don’t Miss Out on Deductions
If you have a side hustle or work as a freelancer, work-related expenses are often deductible, but the rules surrounding these tax breaks can be tricky. A tax professional can help you navigate these complexities and ensure you’re not missing out on opportunities to reduce your tax liability, says Jorie Johnson, a CFP and founder of Financial Futures.
Life Events: When Professional Help Can Be a Lifesaver
Certain life events, such as inheriting money or selling a home, can significantly impact your tax situation. A tax professional can help you navigate these complexities and ensure you’re maximizing deductions or credits while staying compliant with tax laws, says Ashley Folkes, a CFP and financial planner with Farther. Investing in expertise can often be worth the cost when it adds value and fits your budget.
When to Seek Professional Help
In general, hiring a tax professional will cost you at least $400, but the expense can be deducted from your business’s income. If you’re unsure whether you need professional help, consider the following scenarios:
- You receive money outside of your primary job
- You own a business and need help with deductions
- You have a side hustle or work as a freelancer
- You’ve experienced a significant life event, such as inheriting money or selling a home
By seeking professional help in these situations, you can minimize your current tax bill, avoid costly audits, and ensure you’re taking advantage of all eligible deductions and credits.
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