Do You Need Tax Preparation Help?

Hiring a tax preparation company is a decision that requires balancing costs against needs. If you're not sure whether you'd benefit from professional tax preparation services, here are 5 things you may want to consider.

A Complex Return

Some individuals and even a few small businesses can knock out their returns with a few pages of documentation. Others will encounter major issues due to complexity. Especially if you're not 100% sure about which forms have to be filed, there's a lot to be said for hiring a pro to do the work.

This sort of thing can vary from year-to-year, too. An individual who received a settlement from an injury case, for example, may have only one year that they need tax preparation services, but it'll make a big difference that year.

New Situations

Your first time filing a certain way can feel a bit daunting. If you started a company, for example, you might want to be sure you got every detail right. Similarly, people who've moved from the workforce to retirement often like to have a tax preparation company help them with the transition. When new situations emerge, there's a lot to be said for getting professional guidance.

High Audit Risks

Few prospects are as intimidating as possibly defending your tax work against the IRS or a state agency. Some enterprises, for example, have high audit risks. A business that deals largely in cash, such as a laundromat, might be seen by the IRS as a potential source of tax fraud or criminal violations. These businesses generally benefit from professional help because someone knowledgeable can help them avoid unnecessarily creating red flags in their filings.

Foreign Accounts or Income

Balancing out the numbers when dealing with two or more national tax systems is a headache waiting to happen. Generally, taxpayers get some credit for paying taxes at higher rates overseas. Conversely, paying a lower rate may mean you still owe a lot. Documenting accounts and income from overseas also can get a little complicated.

Size

Some returns are just beastly. Heck, you may even have a return that's fairly straightforward, but going through each little detail can be a pain. For example, a landlord who owns 20 properties may encounter a lot of paperwork to document their income and to declare their expenses. This isn't necessarily an intellectually hard return to do, but it may require a lot of bookwork and double-checking.

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