We were sent this article about hiring a tax accountant, by someone who wrote it for a consumer finance newsletter based in the United States. Although many of the references in the article are USA-centric, the crux of the presentation is useful for anyone in India as well. We share this here mainly for the many who need basic tax advice and are undecided about whether to consult a professional.
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Doing your own taxes might seem like a good way to save money, but the risk could be more than you bargained for. Hiring a tax accountant is a smart way to avoid costly mistakes. It can also help you save money over the long run. Keep reading to learn more.
Leave It to the Professionals
If you have multiple income sources, especially investments, using a professional tax accountant is really a decision in your own best interest. Someone who is well versed in the tax code can save you a lot of stress and money.
Taxes are their area of expertise.
They will know about deductions that you might not and can help you avoid the possibility of an audit. But that’s not all, there are multiple ways that these professionals can serve you.
Benefits of Hiring a Tax Accountant
A tax professional can also give good financial advice in general. By looking at and preparing your returns, they can offer tips to help you do better financially in the years ahead.
A tax accountant cannot substitute for a good financial planner or broker, but they can help you see what’s working and what’s not. It’s often hard to see the bigger picture when preparing your own returns. Having someone objective to help you see ways you can improve upon your financial decisions can be an invaluable benefit.
If you have multiple investments or revenue streams, having one person (besides yourself) preparing your taxes can be a tremendous load off your mind.
It is not uncommon for tax season to bring about stress and aggravation. If you’re struggling to comb through all of the numbers, another set of eyes only makes sense. The last thing you want to do is overlook something important that could mean the difference in owing a little or owing a lot.
Having a tax accountant can provide some structure to a (sometimes) otherwise messy experience. Knowing that you’ll be turning in your information to a pro can keep you motivated to keep receipts and other documents neat and organised. This will save you both a lot of headaches.
A tax accountant can provide suggestions for other connections in your particular type of business. Often, they can point to other professionals that can help you.
Relationships with other types of financial experts or even clients for your own business could develop as a result of hiring a tax accountant. It’s a benefit worth considering.
There is certainly a level of confidentiality that a financial professional must observe. However, they can at least offer some general ideas about business contacts that you might not have previously thought about.
More time for your own work
If you’re spending time preparing your own tax returns, that’s time not spent on running your business. Time is the most valuable asset you have. The financial risks of not hiring a tax accountant are one thing, but the time factor matters also.
A tax professional will spend considerably less time working on your returns than you will, simply because they are experts. You might be losing money by NOT having a tax accountant! If you spend weeks getting your returns together, that’s time you’re not spending bringing in revenue.
If you’re sold on the idea of handing over your taxes to a professional, here are some things to keep in mind.
Tips for Finding the Best Tax Accountant
There are dozens of different types of tax professionals. A tax accountant is in a category all of their own.
A Certified Public Accountant (CPA) (Chartered Accountant, or CA, in India) has qualifications that other tax professionals do not, including the ability to represent you in case of an audit or collection issue.
Just because someone is licensed doesn’t mean you don’t need to still do some homework. You should ask any CPA that you are considering whether or not they participate in continuing education. Find out which areas of expertise your potential tax accountant has, and don’t be afraid to ask for references. If you’re not sure where to begin looking, ask colleagues as well as family, friends, and other business associates within your field for referrals.
Just because someone makes big promises regarding the outcome of tax returns doesn’t mean they can deliver. Be cautious of those who boast too much. This is where referrals and references matter. If your potential tax accountant can’t provide a list of satisfied clients, walk away.
There are up and coming rising stars in the tax accounting field, but don’t let your budget completely determine your professional decision. While a less seasoned tax accountant might be more affordable, they may be lacking in the expertise that you really need.
Don’t necessarily give up on the option of those with less experience, just consider all of your options before you do. Your particular situation might be something they can handle and be the beginning of a long, lucrative, professional relationship.
Give careful consideration to any specialty areas advertised by those who make your short list, and make sure they match what you’re looking for.
Always ask about the privacy policies used by a potential tax accountant and get a copy in writing. Keeping your tax information from unnecessary third parties is your responsibility.
Hiring someone to handle your taxes is not a decision that should be made quickly or lightly. Your finances are too important to leave in the hands of the inexperienced.
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We Can Help Too
Guru and Jana offer a wide range of financial services that can benefit you and your business. Tax, Corporate Law, and Audit and Assurance are just a few of the offerings in which we specialise. Contact us today and let us handle all your tax issues.