Software tax tools can create a false sense of security. Some taxpayers with relatively simple situations—a single source of income, no big family changes, no businesses, and so on—might do fine with an online tool. But for many taxpayers, the assistance of a professional tax preparer can result in a better strategy for lowering the yearly tax bill.
A personalized tax projection is just one of many advantages to working with a tax professional to develop a short- and long-term strategy. Here are a few of the many good reasons for working with a tax pro:
- Change is inevitable.
The interaction between taxes and life changes can be unpredictable and counterintuitive. Life throws all kinds of surprises at us, like a serious illness or an inheritance, which can influence tax returns in a variety of ways. Sorting out how to account for major changes can be complicated and stressful. A tax preparer takes over the technical work and finds the accurate and cost-saving approach to incorporating change into a return.
- Developing a personalized plan for the future.
It’s easy to think of taxes as an annual ritual, but the reality is that planning and accounting for a given year’s taxes can begin the year before, or in the years afterward. A tax advisor works with each client to analyze the tax consequences of planned activities, like buying or selling a home, getting married, or starting a business, to reduce tax consequences and optimize deductions. Estate planning, or saving to help a grandchild go to college, are other examples of goals that need extra tax attention. A professional’s long-term view can benefit every taxpayer.
- Complexity is lurking everywhere.
Many taxpayers don’t know how complex their tax situation really is. Automated tax tools are designed to address the most common tax situations, but they invariably have blind spots that don’t capture important events. A taxpayer with business income and expenses, or investment transactions like a conversion of a traditional IRA into a Roth IRA, can easily lose sight of important reporting obligations. A missed form can trigger an unexpected tax bill years down the road, and increase the risk of an audit. It’s better to address hidden complexities the first time.
- Details, details, details.
For many taxpayers the rationale for hiring a professional can be found just by glancing at the pile of disorganized receipts and records left over from the previous year. Tax preparers are used to helping clients sort through their piles and make sense of the jumble. Of course, a tax preparer does much more than that. Putting the numbers together, completing forms with accuracy, and exploring ways to maximize deductions all can be confusing jobs even with the help of software. A professional knows how to navigate it all.
Ferguson Timar gives clients the service they need
At Ferguson Timar we aren’t worried about how tax software might affect our business. Our record of cost-saving service speaks for itself. What worries us is the mistakes and missed opportunities that can result from a taxpayer relying too much on software alone.
For a personalized tax projection, or to begin exploring ways to make the tax system do more for you, give us a call today to schedule an appointment.