Should you hire a tax professional?
Logan Graf, CPA
CPA firm owner, accounting community runner, content creator, punchable face
Should you hire a tax professional?
Yes!
Ok, I’m a little biased because I am something of a tax pro myself
It’s tax time, and you’re doing your taxes...
It’s the middle of summer, and you just bought a rental property only to realize you’re not sure what having a rental property means for your tax situation...
It’s the fall, and you have no idea how much you will owe because you’re a 1099 contractor for the first time ever...
Those are all situations where you might ask yourself...
Should I hire a tax professional?
For most people, the answer is easy because they only have a w-2 and TurboTax can walk them through how to self-prepare their return
I’m all for it
Preparing your tax return is what makes you an American
Not knowing how the heck the tax code works is also what makes you an American
Did you know the tax code is like 6,000 pages long?
That’s more than all the Harry Potter books, COMBINED
From a cost perspective, the less money you make, the harder it is to justify a tax professional.
The more money you make
Well… the higher your tax rate is
And when you have a high tax rate
It’s basically irresponsible for you not to use a tax professional
I’m talking about opportunity cost.
It doesn’t take much for a well-versed tax professional to pay for themselves.
If you make more than $100,000 and you have an above-average tax situation…
Which is basically anything other than a W-2…
It’s probably worth it for you to hire a tax professional.
Let’s say a tax pro finds a $5,000 deduction and you’re in the 30% tax bracket
So you’re making the big bucks, like over $180,000 if you’re single or $360,00 if you’re married
They just saved you $1,500 in tax, which may be the cost of the tax prep
You can also trust, or have faith, that the tax pro knows what they're doing
And will make sure your tax return is spotless
Hiring a tax pro can also save you lots of time
The average time a taxpayer spends preparing their tax return is 13 hours!
According to the IRS…
That includes record keeping, tax “planning”, and actually preparing the return
Don’t waste your time doing something that might be completely wrong
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And getting it wrong could mean jail time
Just kidding!
Unless you’re trying to commit fraud…
But Logan, I’m not in a high tax bracket
Are tax pros not for the poors?
I hate to say this but…
It depends…
Getting help with your taxes can cost a lot, and it’s only getting costlier
If you do have an above-average tax situation, it may make sense to get a tax pro to prepare your return for the first year or maybe try to do some tax consulting in advance
There are free tax return preparation options through the IRS's Volunteer Income Tax Assistance (VITA) if you are low income
Who is a good tax professional?
Tax pros come in many shapes and sizes
You have enrolled agents
You have your uncle Joe
...Your mom
Or you have a CPA, which is what I am
A Certified Public Accountant
Good luck finding a competent tax pro that's accepting new work
300,000 accountants left the industry over the past two years
They weren’t all tax pros, but I bet a good chunk of them were
The ones that are left standing probably have too much work on their hands
A lot of mid-sized firms are no longer accepting 1040-only clients
Meaning you have to have a business before they even think about working with you
And If they are taking clients then expect to be extended
That’s exactly what I’m doing with all of my new clients
I don’t want to fit anyone else in between January-April because I have found my limit
So… good luck
I wish it wasn’t this way
A lot of it has to do with how complicated taxes are
And the workload compression around deadlines
I hope this has provided you with some insight from an actual tax pro
If so, follow me & share :)
This was the script from a recent YT video I made
Childish Gam-Beancounter
2 年Nah