Tax audits are an intimidating experience to navigate, especially when big money is on the line. The IRS handled over 600,000 tax audits on tax returns in 2022, and a poor approach to filing taxes could put you in a position to face an audit. Attempting to file taxes without outside help opens the door to tax problems that could impact your finances for decades.
Hiring a tax specialist might seem like another expense you don’t wish to pay, but it’s the only safe approach when paying taxes to the government. Your tax professional knows all the changes in the tax code to help you get the most deductions and keep more of your hard-earned cash.
Fortunately, you’ve discovered this helpful guide to the nine signs you should hire a specialist to help you next tax season. Continue reading to save money when filing taxes!
1. You Own a Business
Paying taxes gets much more complicated when you own a business or rental property as your primary source of income. You’re likely caught up in the daily tasks required of a business owner or landlord, so the minute details could fall between the cracks. Business owners need more time to monitor the changes in tax law year after year.
A tax advisor with the proper experience can help you organize your tax documents when tax season arrives. They’ll keep up with the tax code changes, so you don’t have to. Focus on what you need to do and avoid taxpayers common problems.
2. Earning More Than $200,000
Another sign that you should hire a tax professional to assist with filing your taxes is when you’re making more than $200,000 annually. You’ll face steeper taxes when making over $200,000 since your tax bracket jumps to 32 percent. You can save money when paying taxes if you structure your income in a specific way.
Your tax specialist has the skills and experience to help you with your finances to save money during tax season. The benefits are even more significant if you’re self-employed, thanks to the many deductions you can use. Your tax advisor will help you write off certain expenses and deductions to cut into the money you owe when filing taxes.
The more deductibles you claim, the lower your taxable income becomes. You could save tens of thousands of dollars with help from an experienced tax professional.
3. Selling Short-Term Investments
Your taxes get much more complicated when selling short-term investments, and a tax specialist is the best person to seek help from. Avoiding capital gains tax on assets you bought and sold within a year is possible, but you’ll need an expert on the job. Using that money on a different investment rather than paying taxes is possible.
Your tax specialist will help you navigate the situation to avoid paying additional taxes or penalties. Hire help for tax season to put more money in your pockets.
4. Life Changes
Significant life events and changes are other reasons to hire a tax specialist to help you manage your finances. Weddings, births, and divorces are expensive events you’ll need to navigate, and each event changes your taxpayer status. You’ll likely lose some of your savings due to additional expenses, and your tax burden will change.
Your tax expert will help you navigate each of these situations. Their knowledge will help you keep your finances in a stable spot for the future.
5. Future Financial Concerns
Hiring a tax specialist is an excellent way to gain peace of mind and move past your future financial concerns. Knowing where your finances will go when you pass away is crucial; a tax expert can help you arrange your finances to help your beneficiaries. Estate taxes and lawyer fees eat away at the money you leave to the people you love most.
A tax expert is qualified to assist with estate planning so you can ensure your money goes where it’s supposed to. Help your beneficiaries avoid probate court by hiring a tax specialist.
6. Paying Too Much
Paying too much in taxes is exhausting and frustrating. It feels like the IRS is eating away at the money you’ve worked so hard to earn. Hiring a tax professional to assist with filing taxes is an excellent path to choose if you feel you’re paying too much annually.
Inform your tax advisor of your financial, living, and business situations. Your location will also significantly affect how much you pay each tax season. Your tax expert will help you make the best of your life situations to help you pay less in taxes.
7. Time Savings
Another clear sign that you should hire a tax specialist is when you feel you’re putting too much time into organizing and filing your taxes. Taxes are confusing, especially if numbers aren’t your strong suit. A tax professional will handle every aspect of filing taxes, so you have time for friends, family, and vacations.
8. Your Business Keeps Growing
A growing business is challenging to manage before accounting for paying taxes. Increased revenue is excellent for your business but only sometimes equates to increased profits. Navigating the taxes you owe and the profit decrease is stressful, but a tax expert can help you find your footing.
9. You’re Getting Audited
An audit is the worst news you can receive as a taxpayer. It’s a helpless feeling that feels like a deep dive into your operations, though your tax specialist can help if it’s unrelated to illegal activity. Your advisor will help you organize your business records from the past seven years to prepare for a potential audit.
Hire the Best Tax Specialist Today
Hiring a tax specialist is an additional expense that is worthwhile if you want to save money and avoid audits during tax season. Your tax professional will keep up with changes to tax codes and help you maximize your deductions to avoid higher tax brackets. You’ll save time and gain peace of mind since you’re not organizing and filing taxes.
Are you ready to kick up your feet and relax this tax season? Read more of our personal finance and blog content to make your money go further!