Come tax season, everyone is on edge. So many forms to fill out, so many hours to burn, still, the daunting task doesn’t get easier. Yet some people insist on going through this ordeal on their own. A situation that can backfire and result in costly mistakes.
Aleksia Kainovic is a tax associate and bookkeeper at H&R Block. With years of experience as a licensed tax preparer, she knows how time-consuming it can be for one to file their own taxes. “Whether you’re a small business owner, a self-employed person or you’re buying or selling your home, stocks, or business holdings, you need a licensed tax preparer to handle your taxes for you,” she says. So, who exactly is a licensed tax preparer? And why should you hire one instead of filing your own taxes? Aleksia helps us navigate the intricate maze of tax filings.
Licensed Tax Preparers
It’s no secret that any small changes to the tax laws can have a great impact not just on how you file your taxes, but how much you end up paying as well. But not everyone keeps themselves abreast of the recent tax law changes that the IRS introduces. This might explain the hassle and frustration many people go through as the tax filing deadline draws near every year.
According to Aleksia Kainovic, a licensed tax preparer is a professional with extensive knowledge and experience in tax laws, procedures, and filings. “The guidelines of the IRS,” she says, “are notoriously complex. This is not done on purpose. It’s just a reflection of the complexity of booking keeping and how businesses are conducted. And a licensed tax preparer knows these guidelines inside out.”
In addition, every few years, tax forms tend to go through a complete overhaul. This happened as recent as 2018, when Form 1040 was fully revised. Taxpayers were forced to learn and use the new form to file their taxes. A qualified tax preparer helps the taxpayer get over all these hurdles and file their taxes with minimum hassle and struggling.
When a Licensed Tax Preparer Is a Must
Another side to this problem which makes it almost imperative to call for a licensed tax preparer has to do with the nature of running a business and managing finances. Some situations just demand the expertise of a tax preparer.
Take for example a complex tax situation where someone has extensive investments, charitable work, dependents, and plenty of assets to report. Obviously, you can’t expect that person to file their own taxes. Just think of the endless hours they have to put in as they try to account for every financial transaction and factor in tax deductions, meals, and travel expenses to name a few.
Business owners and freelancers are another group of people who could do with the services of a licensed tax preparer. When you consider that itemizing your deductions often saves you a lot more money than if you went with standard deductions, then a tax preparer is well worth it. Not to mention that self-employed people often have complicated finances that only a qualified tax preparer can sort out.
Aleksia Kainovic also recommends seeking the services of a licensed tax preparer if the taxpayer recently got married, had a baby, or even bought a house. Such social changes have a great impact on one’s finances and a professional can be the difference between saving a lot or paying more to the IRS.
Aleksia Kainovic Shares Common Mistakes When Filing Your Own Taxes
Even when the taxpayer’s financial situation is not that complex, the complicated forms and procedures might get in the way and create problems. Some of these mistakes are easily avoidable especially with the help of an experienced tax preparer.
According to Aleksia Kainovic, the most common mistake that people make when filing their own taxes is not getting the data right. “We’re not just talking about math errors,” she explains. “Even not keying the figures correctly into the form can lead to grave consequences. One example is rounding the numbers instead of entering them as they appear in the books.”
Some people don’t recognize the importance of knowing their status when filing taxes. If you file your taxes as the head of a household, that makes you eligible for great discounts compared to filing as a single taxpayer. Even getting a refund and reporting all your extra income can be tricky without the professional guidance and helpful insights of a licensed tax preparer.
