When should I get a tax accountant?

[Anonymous]

I've been doing my own taxes for last 10+ years. I studied accounting in college and feel OK about finances in general. However, I work in marketing so I'm not proactively keeping up with all the rules and regulations outside of what I input into Turbo a tax and what that tells me. Also in the past few years, our income has increased. We're not rich, but combined income is a tad over $300k now. We have one rental property in another state, we rent our current house, we max out our retirement contributions and started the VA529 plans a couple years ago. Things have gotten a bit more complex since my college days of a single W-4.

Anyway, I always hear how some people love their tax accountants. How they help you save so much on taxes etc. just wondering at what point does having an accountant become beneficial. So far I feel like taxes each year are manageable. Certainly time consuming. Maybe it's a time trade off. Would love to hear from anyone who made the transition to using a tax accountant and reasons for doing so.

[Anonymous]

do it. i can't believe we didn't do it earlier. it saves you so much time and it's around 400-700 depending on how complex your taxes are. You make too much money to spend your free time doing something you are not an expert in. find an accountant that does everything online. I just scan my receipts and upload them and then it's all done. he found mistakes from our previous years. we overpaid.

[Anonymous]

Just remember, you are responsible for everything on your returns. If the accountant takes some risks to "save you money" you are responsible, not the accountant. Unless you are completely missing something it is doubtful they would save you more than what they charge you without taking some chances.

Also - with the rental be careful on whether you take depcreciation expense, as then you will have taxable gains when you sell from the depreciation recapture.

I have had to fix pretty glaring mistakes made by people doing it on the side, the quality and level of attention vary widely. One of them got into a large and very costly audit.

[Anonymous]

^^ forgot to add - the reason to go with an accountant would be for convenience. There are no tricks or magical things that accountants know that aren't included in the software.

[Anonymous]

Anonymous wrote:^^ forgot to add - the reason to go with an accountant would be for convenience. There are no tricks or magical things that accountants know that aren't included in the software.

^This

I have always done my own taxes, but each year for the past few years I have asked for a few quotes from different CPAs. It has never seemed worth it, though. I use turbotax online, and it probably takes me 6 hours or so. My issue is that most firms charge for each form. Once you have itemized deductions, rental income, interest deductions, special depreciation, a few K-1's... the total cost for my taxes is a few thousand bucks. Hopefully at some point my time will become too valuable, but for now it makes sense for me to do it.

[Anonymous]

Anonymous wrote:Just remember, you are responsible for everything on your returns. If the accountant takes some risks to "save you money" you are responsible, not the accountant. Unless you are completely missing something it is doubtful they would save you more than what they charge you without taking some chances.

Also - with the rental be careful on whether you take depcreciation expense, as then you will have taxable gains when you sell from the depreciation recapture.

I have had to fix pretty glaring mistakes made by people doing it on the side, the quality and level of attention vary widely. One of them got into a large and very costly audit.

Actually the rule is you owe depreciation recapture tax whether or not you actually took the depreciation (as long as you could have taken depreciation), so you might as well take it.

I agree that tax accountants don't have any magical tricks that will save you money but I would say the reason to go to an accountant is to make sure you are doing things right, especially for the out of state rental house. You might consider paying for one year and seeing how it compares to what you would have done.