The U.S. tax code is complex — and making any mistakes related to your tax situation can be costly. While some taxpayers have wage income and straightforward tax returns, many others have intricate financial situations that require the knowledge and skill of a tax professional. When you use professional tax services, you can have peace of mind knowing that your returns will be prepared correctly, your deductions will be maximized, and your tax liability will be minimized.
While any taxpayer can greatly benefit from working with a tax professional, here are several situations where you should strongly consider using professional tax services:
You Own a Business
If you own a business — or more than one company — it’s strongly recommended to have a trusted tax professional by your side. Not only can they help prepare your tax return and identify all available deductions and credits, but they can also serve as a crucial advisor who advises on other matters such as liquidity, savings goals, and succession planning. A tax professional can help you select the entity structure that is right for your tax situation and assist in creating a long-term strategy to achieve your financial objectives.
You Have Investments
Investments have various tax consequences that can make your tax situation much more complicated — and not all investment income is treated the same. A tax professional can help you understand the tax implications associated with your investments, minimize your liability for capital gains, and report income correctly to reduce the risk of an audit. They can also work with you to select tax-efficient investments and implement strategies to reduce your taxes over time, such as tax-loss harvesting.
You Are in a Higher Tax Bracket
If you are in a higher tax bracket, you’re more likely to have complex financial issues that require skillful guidance. A tax professional can help you navigate the tax consequences associated with your investments, business interests, and other sources of income. You can also benefit from the advice they can provide regarding proactive planning strategies — including retirement, business, estate, and gift planning.
You’ve Experienced a Major Life Event
Using professional tax services after a major life event is a smart move. Many life changes can significantly impact your tax situation, including the following:
- The birth or adoption of a child
- Marriage or divorce
- Inheriting assets
- Buying or selling a home
- Changing jobs
A tax professional can ensure you remain compliant with the tax code, take advantage of any available deductions or credits in connection with the changes, and estimate future taxes so you can plan ahead.
You Are Facing an IRS Audit
If you received an audit notice from the IRS, a tax professional can help you prepare and avoid penalties. They can guide you through the audit process, manage your communications with the IRS, and ensure you don’t miss any deadlines. If you disagree with the auditor’s findings, a tax professional can also handle the appeals process on your behalf.
You Are Planning for Retirement
A tax professional can play a key role in retirement planning. They can help you choose which type of retirement accounts make the most sense for your situation and advise on how to benefit from tax-advantaged retirement accounts. While retirement income often comes from several sources, a tax professional can create a comprehensive withdrawal strategy that minimizes your tax liability on distributions — and helps you manage required minimum distributions to avoid penalties.
Contact an Experienced Tax Professional
The tax code isn’t easy to understand, and having the right advisor by your side can make all the difference to your future financial success. Based in Fairfield, Rolleri & Sheppard CPAs, LLP, provides tax services to a broad spectrum of clients, including business owners, high-net-worth individuals, those nearing retirement, and wages earners. Contact us online or call (203) 259-CPAS to schedule a consultation to learn how we can assist you.
