We see many businessmen asking; Should I Get a Tax Accountant to Do My Taxes? Well, a simple and straight answer is; yes you should. However, in order to reach a conclusion, we need to investigate the answer in depth.
The need for a tax accountant to handle tax matters depends on your individual situation. It is good to hire an accountant if you are self-employed, or have faced significant changes in your life during your tax year. You may also wish to consult with an accountant if you're required to modify the tax return from a previous year. It could be worth it since many discover that they save money by hiring an accountant, as their tax refunds increase significantly. However, there are instances when you might prefer to file your tax return yourself.
In this article, you will learn the times you will (and would not) require a tax accountant and the impact their services could have on your life. However, first, you need to know what an accountant does.
What Exactly is a Tax Accountant's Job?
If you're wondering "what is a tax accountant" A tax accountant is a person who performs many different tasks, from the preparation of financial statements to providing advice regarding the health of the finances of an organization. As part of their job, some accounting firms offer tax services for business or individual tax services that usually involve the preparation and filing of self-assessment tax returns with HMRC for individuals and companies.
When You Need a Tax Accountant?
Certain circumstances could raise an indication that you may be better off working with an accountant rather than preparing your tax return by yourself. Most of the time there are some advantages to hiring an accountant if you're in a complex circumstance. Some of the reasons to hire accountants are:
It's Your Business!
An accountant can assist you to prepare your taxes in a timely manner and help you avoid making costly errors if the taxpayer has his own company. The accountant can also determine the amount you need to make in your quarterly estimated taxes in the future so that you don't have an enormous tax bill when it comes time to file.
Major Life Changes
As you age and your financial position becomes more complicated A professional accountant can help you and ensure that you're making the most of each tax benefit offered to you and assist you in determining what you can do to adjust your withholdings to take advantage of the tax breaks that you qualify for. A tax professional can assist you to adjust your tax situation when you are married or have a child or are divorced or have started investing for the very first time. In this case, you may require only an accountant for the tax year during which you encounter these adjustments.
When You are New to the Country
If you've just moved into the UK and haven't ever before had to file taxes in the UK. It's an excellent idea to talk to someone who is familiar with the ins and outs of the UK tax laws. There is no need for the full range of services provided by accounting professionals, however, a quick consult will give you the advice and information you need to start.
When Your Tax Situation Has Dramatically Changed
Did your earnings increase dramatically this year? Did you finally start and earn money out of your side business? Did you earn tons of money from trading and buying NFTs? Each of these scenarios could alter your tax situation which means HMRC alters the tax rate you pay, the way you file your taxes, and in the end, how much you are liable for. Consult with an accountant. They will guide through the tax consequences of the particular situation.
You didn't Pay in the Past
Contact an expert if you were not able to complete the required return of taxes in the past. Tax accountants can assist to file your tax returns. They'll also be aware of the tax programs provided by the HMRC for those who are in this position. They will help you choose the best option for your personal financial situation. For example, it is possible that the HMRC may decide to create an installment plan for you if you fulfill your qualifications. It can be helpful for you if an accountant is working on your behalf in order to make sure all tax returns are filed correctly.
What is the Best Time to Do Your Own Tax Returns?
There's nothing like the satisfaction you get when you've completed something that's difficult after putting in sweat, blood, and tears. Although filing your taxes might be a bit of a hassle. When you're ready to invest the time and effort to study, comprehend the basics of tax returns. It might not be the most effective option to doing your own tax returns however if the following situations are relevant to you, it makes sense to file your own taxes.
If You have Time but No Money
Making your own tax returns is not expensive, or even free if you utilize software to calculate taxes, which can make it a great option for those with tight budgets. However, it requires some effort. It's likely that you'll need to dedicate between 6 to 26 hours spread over several days or weeks to file and prepare your tax return based on the level of complexity of your finances and the method you select as well as your level of expertise. If you are able to commit to working for a while, you might be able to finish your own taxes quite inexpensively and easily. Be sure to file ahead of tax day, so you can find the information you stumble across.
When Your Tax Situation is Uncomplicated
If you're a young single, have only one job with a few other income sources, or your finances are simple for a different reason, you're probably not going to require an accountant to prepare your tax returns. You don't need to worry about sloppy mistakes If you do your homework and utilize accounting software. There are many useful tax software services on the internet that will help you as you prepare your tax returns and make the process simpler than it appears on paper. QuickBooks, Xero, and FreeAgent are among the most popular choices.
If You're Adept with Finance
If you are well-versed in tax laws, and you've had an experience in the field or a passion that has equipped you with the necessary understanding of UK tax laws and knowledge of your personal circumstances and how tax laws impact it, then you'll be able to handle your own taxes, with no issue. You won't just save the cost of hiring a professional but also save money on the amount you pay in taxes If you manage your money correctly.
The Big Benefit of Hiring an
Accountant
Tax laws are extremely complicated and constantly changing which means that even if you completed your own tax returns this year, and the year before, not only is your tax situation different, but the laws which govern the amount of taxes you have to pay are likely to be also. Due to the COVID-19 situation, many tax reforms have taken place during the last year, and the situation is continuing to change.
Accounting professionals are compensated to be aware of the rules of taxation both forward and reverse. They are required to be aware of changes in the law and the implications for taxpayers who file tax returns. Since they are tax experts in-depth, they are also aware of which strategies to take advantage of the number of deductions that you are eligible for as well as the best ways to save money by investing smarter and retaining the gains you earn, and the best ways to run your company when it comes to tax obligations. All of this knowledge could help you save tax that can easily outweigh what you pay for an accountant.
Note: If you're feeling stressed, new to a tax situation, managing your company, or are unfamiliar with UK tax laws It's a good idea to consider the services of a tax accountant who can help you file and prepare your tax returns.