The tax return season can be difficult for some or a complete breeze to others. It essentially depends on how you carry the records of your financial data and your basic tax knowledge. A CPA is someone who is well versed in all tax laws and stays up-to-date on recent tax reforms. He has undergone rigorous education and uses skill and professional skepticism to earn and build the standard.
On the other hand, tax preparer software programs are amended with the most recent tax rates and can serve as a guide in preparation of a tax return. Therefore, determining whether a CPA is required or not depends upon several factors, including the following:
1. Scale of Operation: If you are operating a large scale of business and have very complicated transactions, a CPA can certainly ease your work. However, if you are an entrepreneur of a small business and are maintaining your records neatly, then the tax accounting software can work for you.
2. Cost Efficiency: Complex transactions need a special tax treatment, including receiving a rebate. But, to take advantage of these benefits, you should be aware of all the facts. Before deciding to hire a Certified Public Accountant, analyze the nexus between the cost of software and the fee of a CPA; choose whatever seems economical in terms of cost and time.
3. Bookkeeping: If you have availed the services of a local accountant to record your daily entries, then it may help you in deciding your next step. Well maintained and managed books can offer a lot of help in preparing a return. If this is the case, you can file the return yourself. On the other hand, if they are mismanaged, then looking for a CPA for assistant would be preferred, especially depending upon the industry margins he will set up the Performa for you.
4. Nature of Transactions: If you are in the simple trading business, have same sort of transactions every year and are aware of basic tax forms and rates, then it may be best to spare your hard-earned dollars and avoid hiring a CPA. Tax preparation guides are available online, allowing you to file your return at a much lesser cost. On the other hand, if the transactions are unique and deserve a special tax treatment, then a CPA can help as their experience, qualification and broad knowledge will save you from hassles created by IRS.
These are the various factors that can guide you and help you in formulating a correct decision, though the decision is yours to make. Software programs come in all price ranges, often differing in functions and features offered by the software. If you feel yourself a little weak in tax basics, then as an entrepreneur, you can give a chance to the newly qualified CPAs. Giving a chance to fresh talent will help maximize their financial and strategic benefits. After all, entrepreneurs are the builders of the economy.
Take a step back and make a wise decision with regards to the cost and benefit analysis before making the decision to hire a CPA this tax season. The decision is ultimately up to you.
