(NAPSI)—According to the National Taxpayer Advocate, nearly 60 percent of taxpayers hire paid preparers to do their taxes. With all the tax software programs out there, why do so many people turn to a professional?
“It really depends on the situation,” explained Rich Rhodes, EA, an enrolled agent in Ohio. “Young, single adults with one or two W-2s can probably do fine with tax software, but what if you’re married, own a home, have kids, are going to college or have kids going to college? There are plenty of confusing tax traps just waiting for you.”
A knowledgeable tax pro should actually save you money because he or she will interview you in person and ask a lot of questions to determine for which deductions you may qualify. Tax laws change every year and, if it’s not your full-time job, it’s hard to keep up.
Here are just a few areas where you could be missing out on saving money on taxes.
• Education and child care. The IRS publication explaining the variety of education credits alone is 94 pages long. How about child care expenses? That publication is a “quick read” at only 19 pages. Now consider this: Those two publications cover just two line items on most 1040 forms.
• Volunteer expenses. Rhodes points out that if you are a Scout leader, volunteer in your church or food bank, deliver books to a hospital or meals to seniors, many of your volunteer expenses, including mileage, may be deductible.
• Job-related expenses. Perhaps you’re a traveling nurse. Do you wear a uniform? Do you carry protective glasses and a stethoscope for which you’re not reimbursed? Do you have to renew a license or take continuing education courses to maintain a license? Job-related expenses may also be deductible on your tax return.
• Filing status. Married people don’t always file jointly. There are many reasons why filing separately might be a good idea and many why it might be a bad one.
Are you paying off student loans? Wondering if you should contribute to a Traditional IRA? Paying alimony? You don’t even have to itemize deductions because these items can reduce your income and that reduces your tax bill. All these are questions that can affect the amount of taxes you have to pay—and a wrong answer can cost you money. Hiring a tax professional is a solid investment.
Tax professionals such as enrolled agents are licensed and required to take continuing education courses every year to stay up-to-date on all the latest tax changes. In fact, EAs are known as America’s tax experts. They’re the only federally licensed tax practitioners who specialize in taxation and have unlimited rights to represent taxpayers before the IRS. Those who are members of the National Association of Enrolled Agents must also adhere to a stringent Code of Ethics and Rules of Professional Conduct.
Learn More
To find an EA nearby, you can use the “Find a Tax Expert” directory on www.eatax.org.
On the Net:North American Precis Syndicate, Inc.(NAPSI)