Why you should Hire a Professional to Help File Your Taxes

With the ability to do your taxes online and electronic forms that do the math for you, who needs a professional to do your taxes?

Maybe you do. If you only have one job, and no other income to report, then maybe you can get by doing your return yourself. But once you get beyond a single-source, all reported on W-2 form income, things can get complicated pretty quickly. Any of the following issues should have you considering turning to a professional tax repairer. If more than one of these situations applies to you, you shouldn’t hesitate turning to a pro.

Self-Employment Income: Self-employment income is tricky to report, and the deductions are trickier. On the surface, it should be simple. How much money did your self-employment business take in, and how much did you spend on your business? But since many people try to stretch the definition of a legitimate business expense, the IRS pays special attention to Schedule C where profit and loss is reported, looking for abuse. Reporting the correct amount of self-employment tax can also be complicated. If your self-employment income comes from a partnership, you have to understand how to attribute its income to each partner. If your income comes from a Limited Liability Company, you have choices on how you’re taxed, including being taxed as an S or a C corporation … But let’s not even go there. A tax professional who understands self-employment income and the unique tax strategies available to you can be essential in guiding you through an IRS morass.

Investment Sales: The sales of stocks or mutual funds in non-retirement accounts will have you completing Schedule D, Capital Gains and Losses. But to figure your gains and losses, you must come up with your cost basis, including what you paid for the stocks or funds originally and any dividends you reinvested over the years, often very many years. You may not be able to locate all your records. A tax pro can help track down the information you need and even help prepare a good-faith estimate of your investment cost that the IRS can live with.

Rental Income: Nothing comes simple when you’re talking IRS regulations, so it should be no surprise that the rules for rental property deductions are complicated, especially if you lived in the house for part of the year, then decided to rent it when you couldn’t sell your home in a down housing market. The IRS requires some expenses to be apportioned over the period of the rental, while other expenses must be classified as repairs or capital improvement. A tax professional will know how these expenses can be deducted, and when.

When Should You Turn to a Tax Professional?

If you just completed your tax return and realized what a struggle it was, now is a pretty good time to call for help for next year’s return. The Kalamazoo accounting firm A Adonu Idahosa, with experience since 1981 in providing accounting and tax help for hundreds of businesses in the region, can provide year-round tax advising and planning. The CPA’s at Idahosa can even check your prior returns for mistakes and missed deductions that you may still be able to claim.

If April 15 is fast approaching and you realize you’re in over your head, now is still a pretty good time to call. It’s never too late to call a tax professional for help.