Should I Hire a Tax Pro or DIY My Taxes?

Who needs a tax pro?

Hiring a tax pro might be your best option if:

• You’re short on time
• You struggle with understanding tax laws
• Your tax situation is complicated
• A “complicated” tax situation can include a broad range of situations.

Small business owners, consultants, and freelancers all have to pay their own separate taxes. These are called self-employment taxes. They even apply to any salaried employee who has a “side hustle.”

Investors who use anything from robo-advisors to traditional brokers all have to understand the tricky list of rules around their capital investments. These include their stocks, bonds, securities, and other investments. Did you know that you can deduct up to $3,000 in capital losses from your income? ...Did you also know that some limitations apply to this deduction?

If you support anyone financially, you can generally deduct them from your taxes. However, you probably can’t claim a friend or relative who isn’t a direct descendant. The government included this limitation to prevent freeloading. However, this doesn’t stop people who do their own taxes from making this mistake!

A tax pro could help you find the most beneficial tax deductions and streamline the tax paying process. Yoke Tax prides itself in providing tax pros who will complete your return within 3 days. You can book a free one hour consultation any time.

Should I do my own taxes?

 “It takes the average American taxpayer 13 hours to comply with the tax code, gathering receipts, reading the rules and filling out the forms the IRS requires. . . . The tax code forces Americans to spend over $168 billion to comply and 6 billion hours.”

— Rep. Dave Camp (R-Mich.), hearing of the House Ways & Means Committee, April 11, 2013

Knowing this, if you are willing to go through the trouble of doing your own taxes, you must consider the many mistakes DIY tax preparers commit each year. This is extremely important because the IRS has severe penalties and fines for individuals. Taxes are complicated, and it’s easy to make mistakes. Some include:

-       Filing too late (A 5% fine which increases the longer you wait to file)

-       Filing the incorrect form (The IRS has over 800 forms)

-       Claiming deductions you don’t qualify for (Fraud Charges)

-       Not reporting full income (Fraud)

-       Inaccurate calculations (Harsh Penalties)

Should I hire a tax pro?

If you are in one of the following situations and you aren’t sure how they will have an impact on your taxes, hiring a tax pro might be the best choice. They will make sure that you don’t make any mistakes which trigger a call from the IRS, and they will find you valuable deductions which you might have missed.

Multi-state employment makes it very easy to confuse people. Different states’ income tax rules might contradict each other. They might just be muddled by jargon. Income allocation issues may also arise.

Adopting a child is not only a kind thing to do; it’s also an advantageous one during tax season! The IRS currently offers a tax credit of up to $14,440 per child for expenses related to adoption. Including a tax pro early on in the process will allow you to verify if your expenses are eligible for this deduction.

Marriage and divorce both have major effects on your tax filing. If you only recently got married, a tax pro might recommend adjusting your withholding amount and whether it would be more advantageous to file jointly or separately. On the other hand, a tax preparer might recommend filing separately after a divorce. This is so the IRS can’t pursue you for an ex-spouse’s unpaid tax liability. However, the advice varies from situation to situation, and it is best to give the tax pro as much information as you can.

Real estate is a major player in complicating taxes. Buying or selling a house can bring in a number of effects, ranging from increased capital gains taxes to the deductions related to selling the home. Mortgage deductions and capital gains exclusions are also aspects which a tax professional could identify and help with.

Communication is also important when it comes to working with a tax professional. With Yoke Tax, you can call or message your tax pro at your convenience.

How to choose a reputable tax pro

When you plan to hire a tax pro, you need to organize all of your records in advance. These include W-2s, 1099s, mortgage and bank statements, any contributions you made to a charity, etc. You should also be ready to ask your tax professional some hard questions. For example:

-       Do you offer a free initial consultation?

-       Are you keeping up with the latest tax laws?

-       What are your tax professional credentials?

-       When do you require payment? How much?

-       Who will prepare my tax information?

A good tax professional will always answer these questions honestly!

Why you should use Yoke Tax

The two services we provide are tax preparation and bookkeeping, but what do we pride ourselves in?

Keeping things professional and affordable.

With Yoke Tax, you get expert tax prep without going into an office. You simply upload your documents and a tax pro does the rest.

Who is this tax pro? Yoke Tax matches you with a professional who will be the best fit based on your tax situation. Not only will this person understand your state and local taxes- they will also have 20 years of experience (minimum) in tax preparation. In addition, all of your documents and communications will be handled through our secure portal. There will be no need to worry about thieves!

Book a free one hour consultation with Yoke Tax any time.