NASE in the News

Should I Hire a CPA to do my Taxes

Question: 
I am getting all of my stuff together for this year’s tax return and was wondering…should I hire a CPA or enrolled agent or should I do this myself?

Answer:
This is a great first question in the quest to complete your tax return and is the first question you should answer each and every year. There is certainly no requirement to hire a professional and it is my concerted opinion that a vast majority of us are totally capable of preparing the tax return independently. This is particularly true today with the mountain of information and specific help available right on line. Websites like NASE.org and IRS.gov can be invaluable at answering questions and solving almost all tax related issues. 

Having said that, it is always a good idea to have a tax professional help with the return, particularly in years that are more complicated than normal. If this is the first year in filing with your new small business, or you have acquired some major equipment and will have depreciation options, or some other unique complication, then this is a good year to consider using a professional. If, on the other hand, you expect this year to be basically the same as last year then perhaps this is the year to prepare the return yourself. If you choose to prepare the return yourself, consider using some automated tax preparation software such as TurboTax (15% discount with your NASE Membership) or TaxCut. The number one reason for getting that unwanted letter from the IRS asking about your return is inadvertent math errors. Simple math mistakes, number transposition, incorrect social security numbers, etc. A qualified software package will not only help you with the detailed forms but will also eliminate most of the mathematical errors. 

Also keep in mind that these two choices are not necessarily mutually exclusive. You might consider doing the tax return yourself using a software application and then have your tax professional review the return for you. They will possibly charge you less to
perform a review, maybe just over a free lunch, but still be able to point out any glaring weaknesses or omissions.

Lastly, if you do the return yourself don’t forget about those deductions that are most commonly missed. Make sure to include any business use of your personal vehicle, the home office deduction if applicable, and never ever forget to consider maximizing any
available retirement plan contribution that can save a significant amount of tax and help provide for your future.