When you think of a CPA doing taxes, you might think about complicated business taxes. Businesses need help with confusing tax laws, and you may too. Accountants do taxes for individuals whether you have a simple or complicated tax return. When you let a professional do your taxes, you can have confidence they're done right so you stay in compliance with laws and have a lower risk of triggering an IRS audit. Here are tips for working with a CPA for personal taxes.
1. Keep Detailed Records
Get in the habit of keeping detailed financial records of your income and expenses. Keep receipts of purchases, charitable donations, and supplies you need to buy for your job. Give the records to your CPA regularly throughout the year, such as once a quarter, so they can determine the best way to file your income and calculate your deductions. You might get larger deductions and a bigger refund this way rather than taking the standard IRS deduction.
2. Obtain The Proper Documents For Tax Filing
If your taxes are simple, all you may need is a W-2 form for your accountant. However, if you do freelance work, own rental properties, or have income from other means, you'll need the proper documentation to file your tax return.
If you lose some forms or are late receiving them, your accountant can file an extension for you, but you'll still need to give your accountant the amount of your income and expenses because you'll need to pay taxes on time even if you file an extension or you'll pay a penalty.
3. Let Your CPA Know About Life Changes
If you work with your accountant periodically throughout the year, you might overlook letting them know about life changes when they happen. Getting married or having a child will impact your tax returns, and your CPA needs to know about it before you file taxes.
Let your accountant know about all life changes such as buying or selling a house, changing jobs, hiring a nanny, and anything else that could affect your income, tax filing status, or the deductions you could qualify for.
4. Get Tax Advice
A CPA can do much more than simply fill out your taxes at the end of the year. They can also give you tax advice so you set up a home business the right way or so you manage your money properly. They can help you get the best refund on your taxes or help you pay the least amount of taxes in a legal way that doesn't cause trouble with the IRS.
For more information, contact a local CPA.