Today, the DIY (Do It Yourself) market is exploding with new and updated software that encourages individuals to do their own taxes. Many believe that this will save more money than if they hired someone or used a service. There is also a broad selection of tax preparers out there, all with different backgrounds and certifications, and tax professionals will prepare tax returns — for a price. Take the time to look at the options, and do a little research on the source and method you are going to use. While you could save money by doing it yourself, professional tax services do offer some advantages. Consider the benefits and determine if they outweigh the costs.
Ease the Burden
Some tax returns can be complicated. A small-business owner who itemizes his deductions has to complete and file IRS 1040, Schedule A, Schedule C and Schedule SE, among other forms. Each form requires various information from the taxpayer’s records, such as amounts listed on 1099s or 1099-INTs. Navigating your way through a complicated tax return is time-consuming, and the risk for an error increases with every form you need to file. A professional tax service eases this burden.
The Internal Revenue Service keeps a list of the most common tax errors. On that list are computation errors when determining taxable income, entering payments on the wrong line and simple math errors. An error on your return can delay any refund due to you. If you err and the mistake results in tax liability, interest and fines accrue from the date you filed the taxes. While no tax professional is perfect, the chances of making a simple mistake on a return are reduced when you use a professional tax service.
Professional Tax Advice
The tax rules are complicated. Before you can use a deduction or credit, you must qualify for it. A tax professional can help find deductions and credits for which you qualify for, and can give advice on certain tax issues. For instance, you may be eligible to use both a tuition deduction and an education credit, but you are only allowed to use one. A tax professional can help you decide which one to take, the deduction or the credit.
Avoid Adverse Consequences
When you sign the end of your tax return, you declare that the information is true and accurate to the best of your knowledge. If the IRS audits your return and finds errors, you could face potentially serious legal consequences. Having a professional prepare your tax return adds a little safeguard to potential liability. You need to be cautious, however. As stated, a tax professional can make a mistake. Go over the return yourself to ensure that all the numbers are correct and accurate.
Source: chron.com/tax advantages for home businesses