The end of the year is rapidly approaching, meaning tax time is around the corner.Maybe this time, you want someone to help you.
I recently was a panelist on Yahoo Finance’s series, Financing Your Future, along with Kathy Pickering, chief tax officer at H&R Block, Dan Geltrude, a tax accountant and founder of Geltrude & Company , and Janna Herron, Yahoo Finance’s personal finance editor.
Part of the discussion, spearheaded by Yahoo Finance Live Anchor Rachelle Akuffo, centered on how to hire a tax preparer, which could be even more relevant for folks who juggled contract jobs, launched their own business, or taken on side gigs to bolster their regular income in the face of inflation.
In fact, the share of workers reporting that they are self-employed remained above pre-pandemic levels into 2022, according to an analysis by the Center for Economic Policy and Research.
If you’ve always worked for an employer who withheld taxes from your paychecks, “that first year of filing taxes as someone who is self-employed can be very educational,” Pickering told Yahoo Finance.“A lot of first timers get caught by surprise by their tax obligation.”
The number of self-employed workers rose in 20222.(Getty Creative) There are business expenses, for example, that may be deductible and help lower your tax bill, but you need to be on top of what the IRS deems eligible.
“One of the big questions out there is can I take a home office deduction ,” Geltrude told Yahoo Finance.“Just because the world has changed, and now you’re working from home, and that’s your new office, it doesn’t mean that you get the home office deduction.However, for those that are self-employed, meaning if you are doing something on the side, you are your own boss, then those deductions related to that gig job, can be eligible.”
And then there are the life changes that often mean tax changes that may prompt you to turn to a professional.
“When somebody is going through a major life change, say, a marriage, or having a child, or getting divorced, they don’t often think, gosh, I should talk with my tax advisor now to get an understanding of what’s going on,” Pickering said.
“All of those things absolutely impact your taxes.”
Story continues Sometimes just a little bit of a change either in your withholding to make sure that you’ve got the right amount withheld or understanding the implications of what filing status you choose, can make a really big difference, Pickering said.
“It’s important to get it right,” she added.
(Getty Creative) How to find one a CPA or accountant Ask for referrals from friends, family, colleagues in your field.
Certified public accountants (CPAs) often gear their practice to certain specialties, such as small-business owners, high-net-worth individuals, or clients who work in particular industries.Check up on credentials at cpaverify.org/ .
Search the IRS directory of tax preparers.This is a directory of tax preparers who have a required preparer tax identification number, or PTIN such as CPAs, enrolled agents (EAs), and attorneys — who have current credentials recognized by the IRS.
Many state boards of accountancy and state CPA societies have online membership directories.
EAs are federally licensed tax practitioners who are authorized to prepare tax returns for individuals and businesses.The National Association of Enrolled Agents (NAEA.org ) has a directory of EAs that is searchable by specialties, language, and location.
Find out ahead of time how they bill and if they are available after tax season for questions, or if they specialize in a certain field or industry.
Consider free tax-preparation resources If you make less than $58,000 per year or are age 60 and older, you may want to look into having your tax return prepared through the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs.These services are sponsored by the IRS and staffed by volunteers trained to provide basic tax-prep services to the public free of charge.If you qualify, use the VITA/TCE locator tool to find a provider near you.
AARP Foundation Tax-Aide provides in-person and virtual tax assistance to anyone, free of charge, with a focus on taxpayers who are over 50 and have low to moderate income.Tax-Aide volunteers are located nationwide, and are trained and IRS-certified every year.
“You want to make sure that you’re not making some obvious mistakes on your tax returns,” Geltrude said.
“Sometimes it’s as simple as putting the wrong Social Security number on your return, or not matching up the numbers properly.The IRS is going to look at your tax return because there’s an error.Diligence in preparing a tax return to make sure everything is properly reported, is one of the keys to not being invited to the IRS tax audit party.”
Kerry is a Senior Columnist and Senior Reporter at Yahoo Money.Follow her on Twitter @kerryhannon
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