To See, or Not to See, a Tax
Professional
According to the
National Taxpayer Advocate, nearly 60 percent of taxpayers hire paid preparers to
do their taxes. With all the tax software programs out there, why do so many
people turn to a professional?
“Some fans of over-the-counter
tax programs would never dream of hiring a professional, but it really depends
on the situation,” says Holly Gunnette, EA, an enrolled agent in California. “Young,
single adults with one or two W-2s can probably do fine with tax software, but
what if you’re married, own a home, have kids, are going to college or have
kids going to college? There are plenty of confusing tax traps just waiting for
you.”
A
knowledgeable tax pro should actually save you money because he or she will
interview you in-person and ask a lot of questions to determine what deductions
you may qualify for. Tax laws change
every year, and if it’s not your full-time job, it’s hard to keep up. Here are
just a few areas where you could be missing out on saving money on taxes.
Education and child care. The IRS publication
explaining the variety of education credits alone is 94 pages long. How about
child care expenses? That publication is a quick read at only 19 pages! Those
publications cover only two line items on most 1040 forms.
Volunteer expenses. Gunnette points out
that if you are a Scout leader, volunteer in your church or local food bank, deliver
books to a hospital or meals to seniors, many of your volunteer expenses,
including mileage, may be deductible.
Job related expenses. Perhaps you’re a
traveling nurse. Do you wear a uniform? Do you carry protective gloves and a
stethoscope that you are not reimbursed for? Do you have to renew a license or
take continuing education courses to maintain a license? Job-related expenses
may also be deductible on your tax return.
Filing status. Married people don’t
always file jointly. There are as many reasons filing separately might be a
good idea as a bad one.
Are
you paying off student loans? Wondering
if you should contribute to a Traditional IRA? Paying alimony? You don’t even
have to itemize deductions, these items can reduce your income and that reduces
your tax bill. All of these are questions that impact the amount of taxes you
will pay and a wrong answer can cost you money. Tax professionals such as
enrolled agents are licensed and required to take continuing education courses
every year to stay up-to-date on all the latest tax changes.
About Enrolled Agents
Enrolled agents (EAs) are America’s tax experts®. They are the only
federally-licensed tax practitioners who specialize in taxation and also have unlimited rights to represent taxpayers
before the IRS. While attorneys and certified public accountants are also
licensed, only enrolled agents specialize exclusively in taxes.
go to http://hgifinancial.com/ for additional information.
