Anybody can file a tax return. A lot of people will actually ask why they should pay for professionals when they can just file the tax return themselves. But there is actually a great advantage to hiring a professional. In most cases, it is actually more practical—financially and physically—to have a professional handle your tax return.
Tax professionals are aware of the law and the benefits a taxpayer is entitled to. Therefore, the professional can maximize the tax deductions you are eligible for to reduce the amount you have to pay. But what kind of tax professional do you actually need? Here is a brief guide:
Certified Public Accountant
A CPA is authorized to represent a taxpayer in all tax matters. An accountant is probably the most knowledgeable about tax matters that include audits, tax debt resolution, and appeals. A CPA has a field of expertise but he has knowledge in all tax-related aspects. Here are some of a CPA’s fields of expertise:
- Assurance services
- Corporate financing
- Financial accounting
- Income tax planning and preparation
- Management consulting
Just like the CPA, the enrolled agent can represent a taxpayer in all kinds of tax-related activities. But while the CPA is empowered by the State, the enrolled agent is empowered by the Department of Treasury. The enrolled agent is actually the most common professional individuals hire to handle tax returns—this includes consultations, representations and actual preparations of the tax returns. Enrolled agents can represent an individual taxpayer or a company through a corporation or partnership. They can also represent an estate or a trust or any other entity that will file a tax return.
A tax attorney has a more wide scope of expertise because it covers both taxes and law—especially tax matters and legal aspects that are directly intertwined. If you own a business, especially if it is already a large corporation, a tax attorney is the best professional to help you with the company’s tax return. Here are some crucial fields of expertise for a tax attorney:
- Structure and treatment of business
- Criminal investigations by the Internal Revenue Service
- Lawsuits against the Internal Revenue Service
- Cases that have reached the Tax Court
Registered Tax Return Preparer
For simple tax returns or claims for refund, a registered tax return preparer will suffice. If you have tax issues and you need professional advice, don’t go knocking on a registered tax return preparer’s office because he is not authorized to hand out tax advice.
For people who have no advance knowledge about numbers, finances, and taxes, filing a tax return will be quite complicated. So it is better to just trust the expert to handle such matters. Aside from possibly saving some tax money by taking advantage of all the tax deductions that you are privileged to have, entrusting the filing of a tax return to a tax professional would mean less to zero stress for you.