Why You Should Hire an Accountant for Your Personal Finances

If you’re considering preparing your own taxes, you may be looking at tax software to help you do so. Tax software is often much less expensive than hiring a preparer, but the cost can still vary depending on when you purchase the software, the type of software and which forms you need. You may also be surprised by additional federal or state filing fees, which isn’t always included with software. Many people are hesitant to hire a personal accountant or financial advisor. I understand because most service providers charge so much money that it is not even worthwhile to use their services. It is not difficult to keep track of your income and expenses.

From certified financial planners and accountants, to wealth managers and financial consultants—there are plenty of different professionals out there who want to help you manage your money. Given all the options, it can be hard to know where to turn. Just keep in mind that you could use their service for a few months and get educated on how they can help you manage your finances before letting them go; in the end, it’s all up to you. Finally, and perhaps most importantly, a personal accountant examines financial records for accuracy and legal compliance.

When Should You Hire an Accountant?

Consult a certified public accountant at the very least, and ask how you can maximize your deductibles to get a bigger tax break. The problem is that knowingly or unknowingly failing to pay a bill can harm your credit score. If you have a personal accountant, you won’t have to worry about that. If they have access to your accounts, they will either remind you to make the payment or make it on your behalf. For example, if the gift is a property and the recipient intends to use it immediately, you may be able to avoid paying taxes entirely.

• First and foremost, they will explain how impulse purchases and large sums of money affect other aspects of your personal finances.
• Many people are interested in creating generational wealth, and accountants can be a valuable part of that process.
• Hourly fees for bookkeeping services can run $50 per hour and up.
• With the help of an accountant, you can build financial projections, create a budget, and reduce some of the uncertainty that comes with running your own practice.
• Completing a nonbusiness tax return takes an average of eight hours—three for completing and submitting the return, and another four for record-keeping and tax planning—according to the IRS.
• Just sifting through payroll and bookkeeping processes can be overwhelming, said John Cordano, ChFC, CLU and financial advisor with California Financial Advisors.

By creating accounts that resemble the same categories used for tax purposes, you simplify tax return preparation . If you’re planning to borrow money, your accountant can advise you on interest rates and repayment terms, and help you answer questions from potential lenders. How much knowledge you need to do your own taxes will depend on your financial situation. Many of the software programs are broken down to be as simple as possible. However, you might want to pay someone to do it just to relieve yourself of the stress and make sure nothing gets missed.

The cost of hiring a bookkeeper

There’s no need to do i need a personal accountant for an accountant when your taxes are straightforward. CPAs have to pass an exam before they can get their license through the state. Once they’re officially a CPA, they’re allowed to prepare and sign tax returns for individuals and businesses and can represent taxpayers before the IRS for audits. Accountants who do tax planning often work with larger companies who work internationally.

Match with a pre-screened financial advisor that is right for you. Accountants play an important role in assisting clients in estimating their needs and communicating the loan’s goal to the bank. They can also help their clients figure out how to qualify for a mortgage with passive income. When other professionals and companies approach people about financial difficulties rather than calling your line, they are seen as more respectable. Personal accountants, fortunately, typically review transactions as well as documents to ensure that you are fully compliant.

Tips for Tax Season

The same is true for self-employed individuals and those who have multiple sources of income. A personal accountant will ensure that your returns are filed on time and that you do not pay any more taxes than necessary. You own a business or are self-employed and feel comfortable navigating business-related tax forms. Business income adds another layer to preparing and filing a tax return. If you have experience with business-related tax forms or you want to save some money on an accountant, you’re sure to find tax software that meets your specific needs. A tax accountant can help you file several years’ worth of tax returns and will know about the programs offered by the IRS for people in this situation.

This is an accountant (with a college degree and perhaps a master’s degree in accounting) who has received certification from the American Institute of Certified Public Accountants . While a CPA can provide bookkeeping services, this professional may be too expensive for the task. Hourly fees for bookkeeping services can run $50 per hour and up. Whether you need an accountant will most likely depend on a few factors, including how complicated your taxes are to file and how many accounts you have to manage.

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It could take you many hours to do your own taxes but an accountant has a process he/she repeat hundreds of times during tax season. The tax laws and tax-savings opportunities are fresh in their minds because it’s their primary focus—all year. For example, the 2015 Affordable Care Act was the biggest tax code change in 20 years and it had a major impact on small businesses and individuals’ tax returns.

If you’re considering working with a CPA or an accountant, you may want to consult with a financial advisor first. Try using SmartAsset’s free advisor matching tool to find advisors that serve your area. In general, a personal accountant will do your bookkeeping, help you pay bills, prepare your tax returns, and check whether your bank and credit card statements are accurate.

Accountants aren’t the only people who can help you prepare and file your tax returns. You could also get help from enrolled agents or tax attorneys, and there are certified tax preparers who don’t have other professional credentials. Whether the person is a good fit may depend more on their experience and your tax situation than their title. On the other hand, even if you have a complicated situation, you might want to prepare your own tax return if you’re familiar with taxes and your finances. The IRS has guides on its website and you can purchase tax preparation software, which can help you accurately prepare and file your taxes.