Not sure whether it’s worth your while to hire a tax professional to do your taxes?
Updated: Jul 20
Not sure whether it’s worth your while to hire a tax professional to do your taxes? Thinking that maybe this year you will take a run at it yourself? You may want to think again after looking at a new graphic released by the Taxpayer Advocate Service (TAS). The organization, which is dedicated to helping taxpayers resolve tax problems, puts out a map every year that’s designed to help us all understand the workings of the tax system. One quick look should tell you that if you are feeling confused or overwhelmed.
Your next move after looking at this may be to go to Google and type “Why are taxes so complicated in the US?” Know what you would get for an answer? 35 million different options for pages and websites looking to give you an explanation. Reviewing the top results will make it clear that even though we were promised taxes so simple that we could send them in on a postcard, the Tax Cuts and Jobs Act of 2017 made the situation even more complicated. Even tax professionals are still scratching their heads and trying to figure the whole thing out.
Though the leader of TAS, National Taxpayer Advocate (NTA) Nina Olson’s goal is to “recommend changes that will prevent problems,” her hopes for doing that are as dashed as the average taxpayer’s when she looks at this year’s chart. "Anyone looking at this map will understand that we have an incredibly complex tax system that is almost impossible for the average taxpayer to navigate," she said.
In the face of increasing complexity, what is a taxpayer to do to make sure that their taxes are prepared properly and in a way that minimizes their tax liability? The only good answer seems to be to seek professional help.
Hire a Tax Professional.
It’s always tempting to sharpen your pencil and try to make your way through your tax forms for yourself – especially with the advent of so many off-the-shelf, do-it-yourself tax programs. But considering the mind-numbing maze that the process involves, you’re probably far better off spending the money and getting help from a tax pro.
There is no doubt that you could look up everything you need to know about your particular tax situation – so could every other taxpayer and small business owner – but there’s a real question as to whether doing so is a good choice versus hiring a professional who has devoted themselves to staying on top of every rule change and regulation, as it is issued. Your time is worth more than that, and if you’re not sure that’s true just consider what you’d have to do to get even a basic understanding of the impact of the latest tax reform law: for instance, reading this 14-page document from the IRS. It’s a good sleep aid, but not likely to make things particularly clear or easily understandable.
When you consider the amount of studying you would have to do just to understand the basics — and not even scratch the surface of the extra deductions and credits that you may be entitled to — there’s no doubt that it’s worth your investment to use a tax professional. It’s the decision that 72% of small business owners have made, acknowledging that the money they spend on these services is worth it. According to a CountingWorks SMB survey, these entrepreneurs call CPAs and tax professionals “very important advisors over other professionals like attorneys, business bankers, insurance agents, and computer consultants.”
It’s your decision, but when you take an objective view of the amount of work you’d have to put in to doing your own taxes as compared to the advantages of using a professional, it doesn’t make much sense to put yourself through the headache. If you have any questions or would like to discuss your particular tax situation and planning options, please contact our office.
Contact a local CPA today!