Taxes and inflation are facts of life. In his book 18 Common Sense Rules for Enjoying a Successful Retirement, Ron Dickinson teaches about the value of securing trustworthy tax guidance in conjunction with your retirement planning.
(This is the fourth article in the “7 Steps to Financial Security” series.)
A Common Objection
We hear it all the time: “My tax return is simple and doesn’t warrant hiring professional help.”
With tax rates from federal and state income taxes ranging from 20 percent to 40 percent, it doesn’t take much advice and service to more than save you the cost you might spend on getting qualified tax help.
Furthermore, it’s not just the federal return that can be complex. Iowa state income tax rules are significantly different than the federal rules. Often a simple election or strategy on the state return makes seeking professional advice beneficial.
Benefits of Working With a Pro
Here are a few of the benefits you can count on from a qualified tax preparer.
- Preparation of the forms you need is performed by someone who is trained and efficient. What is your time worth?
- If you get one of those dreaded letters from the IRS, you have someone on your side to help. You are not alone.
- A private confidential environment is established so you can ask any tax question.
- A trained person will not overlook deductions for which you might qualify. Often a deductions checklist is utilized. In contrast, if you are only doing one return a year, it is difficult to think of everything yourself.
- Analysis is available regarding the benefits of filing jointly versus separately.
- An analysis of your deductions is compared against the averages for all taxpayers in your income bracket.
- You are able to call someone throughout the year with whom you have developed a relationship. If a question comes up during the course of a year, it is typically better to develop a strategy before the year is closed and it’s too late to help.
- If your taxes did not come out the way you wanted, someone is able to help you learn how you can avoid the same mistakes next year.
- Certified Public Accountants and Enrolled Agents are required to take tax training on a continuing basis.
- Having a multi-person office makes it possible to have a second trained eye to review your return. Returns that are self-prepared (even with software) often contain simple or silly mistakes.
- Electronic filing for faster refunds is beneficial for you.
- Duplicate copies of your tax return are retained for years. In today’s world, this may be in electronic format for your convenience.
- Assistance with your withholding and quarterly tax estimates is available for you.
- You can ask financial planning questions and receive assistance with loan documents and financial aid forms as needed.
What to Look For in a Tax Advisor:
- Experience, Experience, Experience.
- A trained professional with a CPA or Enrolled Agent designation.
- Value for the money. Ask up front about one’s rates. Often a trained professional’s fees are not that much higher than the retail tax preparation franchises or a self-trained person working from one’s home. The lowest price may not be the best value. The lowest tax result obtained with integrity is the best value.
- Someone who shares your same values and with whom you can develop a long-term relationship.