The Pros & Cons Of Hiring A Tax Professional

Doing your taxes can get complicated. This is especially true for high-income earners with financial complexities like business ownership, homeownership, and multiple investments. For someone in these situations, hiring an accountant may make sense.

However, some entrepreneurs and retirees prefer to face tax time alone, despite having significant investments or multiple streams of income.

What is it that makes someone hire a tax professional versus handling their own returns? Let’s look at some personal stories.

Pros: Expert Advice & Efficiency

Even if you enjoy handling your own money, hiring an accountant to do your taxes may be a good idea. A professional who can double-check income, expenses, and deductions help reduce errors.

 

Hiring a tax professional will not only give you a second set of eyes to ensure everything is correct but will also put someone in your corner should you get audited — someone you know well who has detailed knowledge of your personal and business transactions.

Why These Individuals Hired a Tax Expert

John Schmoll, who owns a popular finance website and co-owns a copywriting business with his wife, said, “As our business grew I felt that I was overlooking opportunities to save money in different areas and that I really wasn’t doing our tax situation justice. We ended up hiring a CPA three to four years ago and, in all honesty, it’s one of the best things we’ve done for our business.”

John said that his accountant saves them thousands of dollars each year by taking advantage of deductions that John wasn’t aware of previously.

Beyond simply preparing tax forms, a good accountant should be involved in business and personal planning throughout the year. Typically, a quarterly review should be scheduled to ensure books and records are in order. This also allows the CPA time to advise clients about their businesses or personal situations, so they function with peak tax efficiency.

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Disclosure: Free tools, such as the ones offered through Personal Capital, can give insight into your whole ...

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