It is that time of year again, when advertisements for tax software begin to flood our email inboxes and social media feeds, and when tax documents begin to arrive in our mailboxes. The answer to the question of whether you should do your own taxes or hire a tax professional is the same as the answer to the question of whether you should make any other decision regarding your finances: It depends on your situation. In general, the more complicated your return, the more advantageous it will be for you to work with a professional. In several circumstances, including the ones that follow, it is quite likely that hiring a tax professional will be your best option. You can learn more about it.
- You are hired by yourself.
- You have gone through a significant change in your life, such as getting married or divorced, purchasing a property, inheriting money, or moving to a different state.
- You are the proud owner of rental property.
- You either have accounts or investments in foreign countries or you actively trade stocks and other securities.
You are in business for yourself
If you are the owner of your own company, you will not have taxes taken out of your paycheck by an employer monthly. You are accountable for keeping track of the revenue that is coming in as well as the deductible costs that are going out. You should probably engage a professional that has a solid understanding of estimated taxes, deductible expenses, depreciation, and accounting for inventory if you do not have a good understanding of these topics on your own.
You have recently experienced an important shift in your life
Significant life changes, such as getting married or divorcing, having a child, moving to a new state, starting a business, receiving an inheritance, buying or selling a home or investment property can have an impact on your tax.