Monday, December 22, 2014

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.


 

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