If you're not sure whether you have a simple tax return you can do yourself or you wonder about missing significant tax advantages or are concerned that you might be making mistakes, use the checklist below from the American Institute of Certified Public Accountants to help you decide whether you should hire a certified public accountant to help you prepare your tax return.
You may want to consult with a CPA if you:
- Bought or sold a home. You'll want to take all allowable deductions and make certain you qualify for the personal residence exclusion.
- Got married, divorced or your spouse died. Only a competent tax professional can guide you through the complex tax rules that pertain to assets passing through estates.
- Had a baby or adopted a child. A CPA can explain in plain English the sometimes dumbfounding array of investment options for saving for a child's college education, as well as details about the child credit, child care credit and earned income credit.
- Have a retirement plan, such as an IRA, 401(k), Keogh plan, a pension or an annuity.
- Recently bought or started a business, own a business or work from home. A CPA can advise you on whether you should operate as a corporation, partnership or sole proprietorship.
- Acquired rental property or have rental income. A CPA understands the complex tax rules that apply.
- Have needs for estate planning and need to understand all the ramifications of property taxes.
Like your doctor, your tax preparer knows a lot about your personal situation, so continuity of service is also an important factor. That's why, for many individuals, choosing a CPA is the right choice.
CPAs are college-educated, licensed professionals certified by the states in which they practice. They have passed a rigorous licensing exam and are required to adhere to strict ethics standards, as well as to stay current with evolving tax laws and regulations. They are not part-timers who took a crash course in a few basic tax rules, operating out of a storefront. Finally, if a dispute arises about your tax return, only CPAs, attorneys or enrolled agents are authorized to represent you before the IRS.
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