Tax Return Situations Where You Might Need an Accountant
An interesting fact is that most taxpayers file their returns by either using a software or filling in forms. It is true that for most people, it takes maybe at most an hour to file returns while for some it takes hours or maybe even days. It is important to note that some people also do not enjoy filling taxes or do not have the time to submit them. In some instances, people overpay the taxman and some do not know even what reasons can trigger the need for an audit. The reasons above are indicators that someone should hire an accountant to handle the tax return procedures. Some other indicators are discussed below.
One of these indicators is the fact that the person filing returns is now earning more money. An increment income also increases the possibility of an audit. It is worth remembering that for people making below $200,000 the odds are 0.9% and for someone who has an income of a million and above the odds significantly rise to 12.5%. It is true that at this point, it would be a good decision to have an accountant in case the IRS comes calling for an audit.
The other factor that might trigger the need for an accountant is if the person is a business owner, has rental properties or is self-employed. It is a known fact that a majority of businesses and rental properties has an expense called depreciation on capital assets, which is another tax category all together that most people do not know. However, an accountant is well versed in the various tax categories and will help the business owner to file the correct tax returns.
It is a known fact that investors also need to accountants, especially if they are selling stocks and other capital assets. An accountant is very helpful in this scenario as they can help the investor to get tax rates that are below their regular income and assist in determining other ways of minimizing taxes like tax-loss savings.
It is surprisingly true that estate planning is also another area that needs the services of an accountant. In planning the will, accountants can help the person chose financial instruments that are tax-deferred or tax-free. An interesting fact is that these savings will guarantee that the beneficiaries will not lose a lot of money to the taxman.
An interesting fact is that filing tax returns is a time-consuming activity that might even span for days. An accountant can help a person file tax returns and use the time saved to focus on income generating activities.
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