How do I know if I can do my own taxes or if I need to consult a certified public accountant?
The IRS estimates that it can take 28 ½ hours to research tax law, organize your records, and complete a standard 1040 return with three common schedules. Tax law is constantly changing, so it is important that you are educated about these changes so you correctly fill out your forms. Being technologically savvy is also important as tax preparation software can help eliminate errors, both mathematical and technical. If you’re not comfortable with using this type of software, you may want to contact a CPA.
If you’re a salaried employee who takes the standard deduction, your return is likely to be simple. However, if you’ve encountered a major life change, such as marriage or divorce, or own a vacation home or rental property, your tax situation may be more complicated. Self-employed individuals and small business owners are more likely to be audited by the IRS, and working with a CPA will help lessen that risk. In addition, if you have a high income, and live in a state with high-income taxes, you could be subjected to the Alternative Minimum Tax (AMT). The AMT, which eliminates many itemized deductions and was created to ensure that the wealthy pay their share of taxes, is now affecting more middle-class taxpayers. If you think this might affect you, consult a CPA.