Some employers have simple tax solutions. If you’re employed, you only need the W-2 your employer and then you can use the simplified tax form to complete your tax filing.
But not all people have it that easy. Many source their income from other means. Some own rental apartments and properties. Professionals, such as doctors and lawyers, file their taxes differently, too.
They said that the most constant things in life are change, death, and taxes. That couldn’t be truer. Even in ancient times (in the Bible, if you believe it), the government has been collecting taxes from the people. Still, people are far from excited to prepare the documents needed for their taxes. No one’s a fan of filing taxes even those who expect a tax return by February.
Filing taxes doesn’t get easier with time either. They are getting harder, in fact, as you change jobs, move to new cities, and start a family. Not to mention lawmakers are changing tax codes all the time. It’s hard to keep up with all these changes. And remember that one wrong entry in your tax form can put you in trouble.
But aside from these reasons, here are four other signs that say you definitely need to hire someone to do your taxes:
You’re Self-Employed or a Contractor
If you are self-employed or working as a contractor, it means you do not have an employer. No one’s paying your withholding taxes every month. You should do that on your own. Aside from that, you might have multiple sources of income.
You can be entitled to different cut breaks and reductions, too. Do you want to miss out on a possible deduction because you don’t want to pay a tax attorney?
Truckers, doctors, engineers, lawyers, manual laborers, and other self-employed individuals source their income from more than one place. That’s why many accounting firms specialize in these different types of professional taxes.
Some think that blue-collar jobs don’t need professional tax services, but there is even a surging demand for truckers tax service as this industry continues to grow in the wake of the coronavirus pandemic.
You’ve Done It Wrong Before
If you had a brush with the law because of accidentally filing the wrong taxes before, you shouldn’t do it again. You won’t be as confident with your tax report as you should because of a previous mistake. This is the worst thing that can happen to anyone. Erroneously filing taxes and getting that letter from the Internal Revenue Services is one of the most stress-inducing moments of one’s life.
Unless you are absolutely sure that you won’t make the same mistake again, you should hire a tax accountant or lawyer to prepare your taxes. There are many resources on the internet that talk about tax filing in detail. You can follow their advice and spend hours trying to decipher what you have to do. Or, you can let go of a hundred bill and watch your favorite Netflix show instead.
You Own a Rental Property
Taxes on rental properties are some of the most complicated in the code. Things can get more complicated when you add a unit, lived in the rental property for some time, had tenants leaving in the middle of the year, bought anything for the property, and repaired something.
Do yourself a favor and let somebody else do it. There’s nothing worse than getting a headache for trying to understand the tax code and then, hiring someone else to do it in the end.
You Did Not File Returns in the Past
Some taxpayers decide to forego filing their tax returns when they know they’ll have a huge tax bill. Not filing a tax return, however, will get you in trouble with the IRS. You’re better off facing the fact that you have to pay a huge tax bill than not filing at all. If you did not file returns in the past, get yourself a tax lawyer because you could be facing legal charges.
The penalty for not paying taxes is 25% of your total amount due. In effect, you avoided paying taxes for a year but will end up with an even bigger bill. That’s not the scenario you have in mind when you skipped your tax returns last year.
A lot can happen in a year. You can change jobs, move to a new state or get married. Any one of these warrants a different tax code. So, although you think you can do your taxes yourself, you’re better off hiring a professional to do it for you.