Hiring a tax professional may cost more upfront, but the amount of money you can save is worth the expense. The cost of a professional accountant depends on your situation and the forms you must file. If your taxes are simple, such as filing a W2, it may be cheaper to hire an accountant. Self-employed individuals may need to pay more for an accountant.
Small businesses often benefit from hiring a tax preparer who specializes in this area. A CPA can help you avoid costly mistakes and create a long-term tax plan. They can also detect deductions you may not be aware of. For example, once your child goes to college, they may be able to use the lifelong learning tax credit or the education and fees deduction to reduce their tax liability.
Tax software like Turbo Tax can help you file your taxes independently and save money compared to hiring a professional. However, it is important to remember that Turbo Tax is not as knowledgeable as a real accountant. It may not be aware of all the most recent deductions or ask you the right questions to take advantage of all the tax breaks. Some states, such as Florida, Nevada, Tennessee and Texas, do not impose any state income taxes and therefore do not require an annual tax return.
Tax professionals can save you money and time, and ensure that you follow the relevant tax rules for business owners. They also have experience dealing with tax authorities which can be beneficial in certain situations. Your decision about whether or not to hire a professional or file your own taxes with the help of accounting software should be based on how comfortable you are with numbers, your familiarity with basic tax rules, and the time you're willing to spend. Working with a CPA has many benefits and can help you save money in the long run.