Making your own taxes really is not like changing your own oil.
Even if you enjoy such tasks, making mistakes in any of them can be expensive. But as complicated as a car's engine can be for a relative newbie, an encounter with the tax code offers many more expensive ways for things to go spectacularly wrong.
This tax season, consider the danger of human error: that is, yours.
Here are nine situations that can convince you to give the task to a professional.
1. Small mistakes lead to expensive tax bills.
Tax software, or old-fashioned paper calculators and calculators, will not be very helpful when the numbers that humans first use are defective.
Finding and entering tax information is often not always easy. "That part of the process requires reading comprehension and critical thinking skills, which get more complicated with specialized vocabulary," he said. Lynn Henley, an accountant in Pacifica, California.
And mistakes are possible when you do everything yourself. A new client of Minnie Lau, a San Francisco accountant recently made a mistake in declaring the cost basis of some actions issued by the employer, thanks to a confusion that involves the interaction between the tax software and a brokerage statement. Ms. Lau arranged the return and the client got $ 14,000 back.
2. The software can take you along a path of numbers aimlessly.
Many tax returns are an annual calculation of elementary life choices: with whom, if anyone, marries; who depends on you; where and how do you work; what are you hiding for later; The causes that move you.
Talking regularly about all these things with a human being is healthy, especially if something has changed. And although some tax softwares make communication with a professional possible, it is not the same as establishing a relationship.
Professionals who really know it (and stimulate it) can avoid the mistakes that can arise when a computer takes you to a crazy career through figures without context. Fighting on April 14 to discover what counts as a donation is not ideal.
"Our opinion is that your tax return should be numbers on a form that you have thought and spoken throughout the year, instead of throwing numbers in the air and hoping for the best," he said. Jennifer Kohlbacher, an accountant in Tulsa, Okla.
3. When a family member dies, why add taxes to the load?
In the year after the death of a life partner, pain alone, the weight of it, could be reason enough to deliver the tax task to a professional.
Ms. Kohlbacher and her colleagues in Tulsa are working with several widows and widowers this year, and face technical problems as well as emotional problems.
These include how to treat income before and after the date of death, to which tax return any income belongs, decipher the tax implications of the will (if applicable), find out what value to establish for the cost of inherited assets, and in and in.
4. That word, "divorce," now applies to you.
Filing taxes after a divorce can be controversial for any number of reasons, including that your ex-spouse can obtain a new counter with sharp red pencils ready to "correct" your previous tax return job.
You can defend that work yourself, to try to avoid a demand that the two return to submit all returns. Or you could hire your own ace to soften things and return to your favorite software next year.
5. You are a single father. What do you say to the I.R.S.
Then you are raising a child on your own. From the beginning, the tax software can ask you to choose between submitting an application as "single" or "head of household." Both answers are true, but if you say "single," you can lose valuable deductions.
Sheneya Wilson, an accountant from New York City, has seen the results in her office. It is even a problem with the weapons grade software used by tax professionals, which does not necessarily encourage a preparer to add a child in another part of the tax forms to change the client's filing status to the most Optimum of "head of the family."
A customer who has not presented himself as head of household in the past has lost valuable savings and can cost $ 1,500 or more per year. (Mrs. Wilson says her rate starts at $ 350 for people who present themselves as heads of household.)
6. You hire a babysitter but you haven't discussed taxes.
The worst part is that some families casually issue a 1099 to a babysitter who did not expect it. One of those people showed up at Louise F. Cochrane accounting office in Alameda, California, where the potential bill approached $ 15,000.
If you are a domestic employer, it is better not to do that to someone.
Hire an expert, or at least become one and then make the mistakes you make. Mrs. Cochrane herself outsources this type of administrative task related to employees to a specialist now.
"The payroll is not something I get into," he said. "The moment is so critical."
7. You have become an owner.
In high-cost areas, it may seem that everyone rents a room or an entire house at least part of the time. And very few of these ragged hoteliers, Cochrane said, understand depreciation.
Oddly enough, the tax code declares that your home depreciates even when it can increase its value (on paper or in Zillow), as long as you own and own the property.
But math is messy. Buildings depreciate, but not land. A single family residence and commercial property depreciate at different rates. When you sell, there are "recovery" rules that you must follow that relate to what kind of capital gain or loss you can declare. And then there is the tax rate and everything else.
Experienced owners can solve it as they go. Or they may not know what they do not know.
8. Stock options have increased wealth and your tax bill.
Accountants within 200 miles of a city with a valley or an alley or some other technology center frequently see this stumbling block. This is what their new clients who make mistakes have in common: they act first before committing appropriate mathematical acts.
A common situation: a new employee sells shares, uses all earnings for the down payment and receives a surprise tax bill. After painful discussions with an accountant, that employee ends up in an I.R.S. payment plan for people who are on their heads.
A better situation: attend some employer education sessions before selling shares, plan each tax branch with the help of a professional and save the tax money after a sale before doing anything else.
9. You haven't submitted for longer than you can remember.
Happens. But the fear of presentation is not an excuse. Neither is debt or confusion about what you owe now.
You can try to catch up by entering years of numbers in the software, but you are likely to face a variety of charges and fines. A tax professional will know your payment plan options and can try to negotiate on your behalf.
"Not filing a return is the worst thing a taxpayer can do," said Henley. “Even if a person cannot pay their taxes, they must file returns and pay what they can. File, file, file.
But you may want someone to take your hand and help you do it.