Do I need a CPA·

Posted By: Dr. Frugal in Taxes on 08/04/2007 at 16:38:18

About half of all Americans use a tax preparation service of some kind. Over 750,000 pay a tax preparer to complete the very simple Form 1040EZ. Many other use a preparer for the 1040 form, even though the average person is more than capable of doing it by him or herself. While it pays to use expert help if you have a a complex tax situation, you can save yourself a couple hundred bucks by preparing your own return. Do I need a CPA· No, I personally do my taxes all on my own. Do you need a CPA· Maybe.

There are times when it's almost certainly a good idea to consult a tax professional for assistance. For instance, if you exercised incentive stock options, had complex investments, have a home-based business, own rental property, or had a major life transition such as marriage or divorce you should probably look into finding a CPA. The qualifications of tax prepares vary immensely, and you'll pay more if you choose someone who is overqualified to handle the complexity level of your return. You could hire a tax attorney to do it, but is it really necessary· Certified Public Accountants, tax attorneys, and enrolled agents (certified by the Treasury Department) are the only professional who can represent you in an audit if that becomes necessary, but you can also use other trained prepares suited to your needs.

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