I’ve written before about how to do your taxes easily and on the cheap. But sometimes, based on your financial situation, it might not be that simple. There are certain scenarios where it might actually make more sense and save you more money if you hire a tax professional.
You Own a Business
I filed my own taxes last year because even though I’m a small business owner, my taxes were still fairly simple. I had to track my income and expenses but that was about it. This will likely change in the future as my business grows and changes.
If you own a business that is more complicated, it might help to hire someone. My friend, Matt, who owns Simple Roast Coffee in Syracuse, New York told me that he hires a tax accountant every year now. He knows that this way, he won’t make any mistakes on his own, and he doesn’t have to spend the time doing it himself.
Learn more about the tax implications of owning your own business.
Your Marital Status Has Changed
Did you get married or divorced last year? The answer is yes, your tax status has likely changed. The government really wants people to get married. So much so that they created tax benefits for doing so. First of all, if you’re filing together, you only have to file one tax return, which cuts down on the time and effort of you each filing your own. In addition, your tax bracket may change if you and your spouse are both employed. Your exemptions and deductions will also change. If you’ve gotten a divorce, your filing status and income bracket will change. There will also be different things you can deduct on your tax return, depending on your situation. If you’re worried about doing this right, you might want to hire someone.
You Bought or Sold a House Last Year
There are lots of complicated tax issues that come with buying or selling a home. Don’t ask me for the details - I still don’t get it! Plus, things will be changing next year due to the tax bill that was passed in late 2017. However, you can save quite a bit on your taxes if you’ve purchased a home. As of now, you can write off your mortgage interest and your property taxes. If you’ve sold a home, you can write off some of your expenses like necessary improvements and certain closing costs. If you want to make sure you get as much back as you can, it might make sense to hire someone.
You’ve Made Mistakes on Past Returns
Have you gotten in trouble in the past because of an error on your tax return? Did you end up having to pay more money than you thought? Or not get the tax refund you thought you deserved? It might be worth it to hire a professional who can make sure you file correctly. This person would know exactly what questions to ask, and which documents you need, based on your financial situation.
You Absolutely Hate Doing Your Taxes
Sometimes, hating something is a good enough reason to pass it off to someone else. If you have the money to pay a professional, and it will save you a lot of stress, go for it!
You Always Put It Off Until the Last Second
Lots of us have very busy lives these days. Many of us work full-time jobs, run side hustles, own homes, have children, volunteer, etc. When are we supposed to find time to also do our taxes? If you’re sacrificing sleep or filing for an extension because you don’t have time to do your taxes, pass it off! Time is money and if you’re going to be stressing until April 15th about finding time to do your taxes, you might as well hire someone who will do it for you. Then you know it’s done and don’t have to waste your time worrying about it anymore.
Are you hiring someone to do your taxes this year? Share why in the comments!
Certified Financial Education Instructor. Feminist and financial coach for women. Founder of Money Circle.