Individuals whose income tax returns are simple won’t need a tax law specialist, and in fact, can usually file their own returns. However, the more complicated your situation, the more you might want to consult a tax law specialist.
For instance, do you receive royalties from any mineral rights or other sources? Did you receive a large inheritance this year? Did you have a lot of medical expenses and are confused as to just what is deductible? Do you own rental property? The list goes on with almost endless possibilities. Each additional item or occurrence will need some knowledge to find out how to report it properly and on which form on your tax return to pay the correct amount. Nobody wants to find out that they have to pay a hefty penalty on top of additional owed tax.
If you own a business, that opens up a whole different world of tax complexities. You’ve got equipment depreciation, employee withholding, benefits such as pension funds, health insurance, and the like. Knowing what is taxable, what is deductible, and how to report them can become a huge ball of confusion, especially for new business owners. Even if you have a few business years under your belt, things change as your business (hopefully) grows, and even worse, the tax laws themselves change every year. What was deductible last year may not be this year. Many accounting software companies will update your software with new tables and changes each year, but you still need to know what to put in those boxes.
Then there’s the dreaded audit. If the IRS decides that something doesn’t look correct on your tax filing, it may decide to audit your business. Worse, they have three years to start and finish the audit from the time they select your business. Any mistakes mean possible penalties that pile up during that time. Then they may decide to audit some of your previous returns. You could have been doing one thing wrong for several years and owe not only a large amount of tax but penalties that have been accruing from day one.
A tax law specialist can cut through the confusing legal jargon and explain everything to you in plain language. They can point out any potential trouble spots and tell you just how to handle the details to ensure that your tax forms are correct and won’t garner … Read the rest