Tax Talk With Jim - Winter '08

By James A. Horchak, Esq., CPA

Why should you use a professional to prepare your income tax return?

Tax season can bring anxiety for many Americans. It begins with gathering all the forms you received in the mail in January and receipts and other documents that you have been saving throughout the year. Are you sure that you have everything? Next, stress levels increase as you begin to review the tax forms. The 1040 form, the instructions, and the Internal Revenue code can often be incomprehensible. Some of you may use one of the software programs designed to assist you in preparing your taxes. However, how can you make sure that you reported everything properly? Have you listed all reportable income? Have you deducted items that are not deductible? The following are just a few reasons why you should use a professional to prepare your taxes.

Experience. A professional prepares tax returns for many individuals with varying tax situations. In addition, a professional keeps abreast of the tax law changes which occur every year. As a result, a professional is familiar with different items of taxable income and tax deductions. This experience is very helpful in examining your tax situation to minimize the amount of taxes you have to pay.

Time savings. A tax professional can generally draft a return quickly. After preparing the draft, the professional often needs additional information from you to determine whether all income is reported and all deductions are properly taken. Certain income (such as wages) and deductions (such as charitable contributions) also require proper documentation. Once everything is properly accounted for, the turn-around time for a completed return is about a week.

Peace of mind. A professional will make sure that you are in compliance with all requirements. These include mailing the return on time and to the proper address and attaching all of the required W-2 and 1099 forms. In addition, a professional can review your 2008 tax situation to determine whether you need more taxes withheld from your pay check or retirement, or perhaps need to make quarterly estimated tax payments.

Representation. Sometimes the taxing authorities question certain deductions and demand a response from you within 30 days. They may expect a detailed written explanation and/or copies of receipts and canceled checks to support deductions you have claimed. If you have prepared your own return and are not comfortable dealing with the taxing authorities, you may have to scramble to find a professional to assist you. On the other hand, a qualified professional who prepares your return will represent and defend you in front of the IRS or the Pennsylvania Department of Revenue, as required.

If your tax situation is complicated or you do not have time to do your return this year, call me for an appointment as soon as possible. With 14 years of experience preparing individual income tax returns, I would be happy to assist you with your tax return.