With so many do-it-yourself (DIY) tax programs available for sale, it’s a legitimate question to ask why you should work with a tax accountant or professional when you can create and file a tax return on a home computer. Seems straight up and convenient right?
However, keep in mind that entering tax information into a computer program and making adjustments necessary to clear the diagnostic error messages is no substitute for understanding daunting tax laws! As much as individuals and small businesses want to feel complete autonomy and try to handle it themselves, often times they aren’t maximizing the optimal return possible.
It’s like that delicious, curated recipe that you want to replicate in your kitchen on a whim. The directions look simple and the photos are so enticing that you’re sure you can make it just as fancy. The intention is good, but when it comes down to the final product – unless you’re also a chef – it might end up looking more like, well….something else. When it comes to tax, just because it can be done by you, doesn’t mean it necessarily should.
Just think about it – the Internal Revenue Code and related Treasury Regulations contain over 10,000 pages of complicated provisions. And everyone’s personal tax situation is different. So there’s a reason why CPAs spend hours of their lives studying and understanding tax law to help everyone else out in navigating the system. Similarly, business owners and entrepreneurs need to be focused on their individual craft, which is why skimping with a DIY is not the responsible financial decision.
Working with a tax professional who understands how the provisions affect your specific situation and how the rules interact will provide you with the best result on your tax return. It could mean the difference between getting a significant amount of refund or paying additional tax liability. Obtaining tax benefits is often a complex process involving properly executed and timely-filed elections and/or proper recognition of deductions. Simply entering amounts into an input program often lead to lost benefits.
Not only does a CPA achieve the best numbers, but s/he also…
- Compiles and examines your unique tax situation
- Properly files the returns electronically
- Explains the details of how items of income and expense affect your return so you have a real understanding
- Makes recommendations on how to reduce your tax liability
- Assists with resolution regarding IRS or State notice
- Discusses with you the tax effects of any changes in income for the coming year to eliminate guesswork
- Recommends withholding changes at work to best position you for filing next year’s return
As for the perceived costs – it turns out that CPAs’ save clients well above the fee for their services. Not to mention saving you the time on researching and the culmination of stress that accompanies DIY returns! What tasks are your time and mental space best invested in? Who’s running/minding the business?
I’m a CPA who assists individuals, entrepreneurs, and small businesses navigate the complex world of tax compliance along with other business issues through planning strategies or ideas. It’s essential that entrepreneurs stay focused on their own key craft and achieve a more balanced approach to any pursuits.
Besides helping clients, I’m a blogger who enjoys writing useful and relevant contents (see my other blogs). You can also Connect with me here to schedule a free 30 minute consultation about your tax situation. #GetItDoneRight #SanDiegoCPA #JustGetBalanced!