By Justin Smith
Congress and the Internal Revenue Service are discussing whether to extend the traditional April 15 tax filing deadline as a result of the current COVID-19 pandemic. Regardless of whether the deadline is formally extended, all taxpayers may automatically obtain a six-month extension and an updated Oct. 15 deadline by simply filing Form 4868. Any professional tax preparer can handle that for you.
Keep in mind the fastest method of obtaining you refund is to e-file your return with a direct deposit.
The typical turnaround time is often as little as three weeks. The IRS will continue to accept paper returns (even if prepared by hand) and send refunds via a check, but it may take months for that method to net your refund.
If you are one of the millions of taxpayers who has not yet filed your return, you should consider your options in preparing and filing your return.
Do-it-yourself tax preparation software is widely available, can be accessed online, is reasonably priced and often sufficient for less complex tax returns. Software is also typically user-friendly and will serve to help you prepare and electronically file a tax return that complies with relevant federal and state tax laws. It is often confusing for taxpayers who file multi-state returns (such as instances in which someone lives in Alabama but works in Georgia).
Professional tax preparers such as certified public accountants (CPAs) are licensed accounting professionals who typically possess at least an undergraduate degree (and often a graduate degree) in accounting, have studied for and passed the extremely rigorous CPA exam and have significant experience in the field. Most importantly, CPAs will generally work with you year after year so they will better understand your unique tax situation and be in a great position to help you prepare for the future, rather than simply file a tax return.
Enrolled Agents (EAs) are also professional tax preparers who have passed the EA examination and are recognized by the IRS. EAs typically focus on tax preparation.
The benefit of hiring a tax professional as opposed to using a software solution comes down to three key considerations: convenience, complexity and planning. Tax professionals can make your filing experience much more convenient by efficiently preparing your tax return, helping you understand tax planning consideration and be better prepared for future changes and addressing complicated issues that you may be unsure of.
You should consider the following reasons why hiring a tax preparer is a great idea:
- They may find deductions and credits you have overlooked, and pay for themselves with the tax
- You will save time, effort and uncertainty by hiring a professional to handle your taxes for you.
- A professional preparer can answer questions, research the tax code, and help you navigate complex issues that may impact your personal situation.
- CPAs can represent you before the IRS or state taxing authority, even if you didn’t use their services for your tax preparation originally.
- The IRS considers CPAs to be their first line of defense for compliance, and often audits professionally prepared returns less frequently.
If you are ready to hire a tax professional, consider a number of important items: qualifications, reputation, fees, experience, customer services, trust, and overall fit.
Each taxpayer is unique, so avoid one size fits all services, and do your homework before selecting a tax preparer or going it alone.
Justin Smith is a licensed certified public accountant in Opelika, specializing in individual and small business tax and accounting. He can be contacted at 334-400-9234 or Justin@JSmithCPA.net. His website is www.jsmithcpa.net.