Many people choose to utilize software programs and online form generators to prepare their own taxes. While self-preparation can work for taxpayers with fairly straightforward income and asset situations, there are times when the help of a certified CPA may be required.
The additional money that you spend to have a CPA do your taxes pays dividends when it comes to avoiding an audit from the IRS. Here are three unique situations that indicate you may need to seek out the help of a CPA this tax season.
1. You Have a Side Hustle
The gig economy is stronger than ever. Many people choose to give rides, deliver food from restaurants, or perform small tasks for money in addition to working their full-time job. These side-hustles can complicate the preparation process when it comes to doing your taxes.
The income that is received from your side-hustle must be reported to the IRS, but there are many different deductions that you can apply to this income to help reduce your tax burden.
A CPA will be familiar with the most current allowable deductions and help you utilize as many deductions as possible when preparing your tax return.
2. You Are Self-Directing Your Retirement
Planning ahead for retirement is something that most people take seriously. In addition to the traditional 401(k) and IRA accounts that have been used to save for retirement in the past, today's tax-payers have the opportunity to engage in self-directed retirement planning.
Two popular vehicles for self-directed retirement planning include investment in bitcoin and real estate.
Including these assets on your tax returns can be tricky. A CPA can easily navigate these assets and prepare an accurate tax return that minimizes the likelihood of an IRS audit.
3. You Have a College-Bound Child
A college education costs more now than ever before. Parents often start saving for tuition when their children are young. Financial aid from the government is also a great resource for college-bound kids.
If you have a child who is heading to college in the coming year, the information that you provide on your tax returns will impact your child's ability to receive FAFSA funding.
A CPA will be able to review current FAFSA financial guidelines and use these guidelines to prepare your tax return.
You may have to forego certain exemptions or deductions in order to maximize the amount of financial assistance your child can receive in the future.
To learn more, contact a CPA or CPA company, such as Matthew H. Siegerman CPA/Siegerman & Company.