I consider myself to be a fairly smart guy, but for the life of me, I’ve always suffered from performance anxiety when attempting to file my taxes.

Something about the process of organizing all that data, identifying all the necessary forms, and hopefully plugging and chugging out the correct answers intimidate me to the point where I pay an accountant a couple $100 every year to do them for me.

In my defense, most of the jobs I’ve had were contractor/consultant type jobs where self employment income was an issue, so I never had the benefit of a generic plug and chug 1040 form. But still, no matter how good my intentions started in February, I always found myself getting frustrated by early March and outsourcing the work to someone more qualified.

So if you’re like me and you find yourself sitting on the fence about hiring a CPA, here are a few reasons that might push you over the edge.

10 Reasons you Should Hire an Accountant

1. You don’t know Jack about taxes. If you’re a complete idiot when tax time rolls around, and you feel you’re not up to the task of learning how the process works, it’s best to call in the cavalry. Most people have at least one family member that can help you out at the last minute, but I always find it best to keep family and finances as far apart as possible.
2. Completing tax forms can be intimidating. I find the idea of filing my own taxes without someone checking my calculations about as appealing as a DIY appendectomy. Tax forms have multiple steps, multiple sorts of data, and many different calculations which have to be made in a specific order, and if you’re wrong in just once… you’re screwed. Tax software (e.g. Quicken) can alleviate much of the number crunching, but I still prefer having a second set of eyes checking my work.
3. The fear of an IRS audit. If I get audited, I’ve got a hired gun on my side from the start. All I have to do is pick up the phone, and she’s on working on my case the very next day.
4. You are self employed. When you make the choice to go the self employment route, life as you know it may change for the better, but your personal finances will definitely get more complicated. The amount of deadlines, variables and options to consider are immense. Having a tax expert to advise you along the way is not only a time saver, but can save you money as well.
5. You have a multiple sources of income. The personal finance blogosphere has spoke at length about diversifying your income and acquiring multiple income streams, but in the end, the tax man still wants his cut. If you know what you’re doing, then making the amendments to your tax returns shouldn’t be that difficult, but if you’re a novice or you’re making some serious bank, a CPA might be able to save you some time, some cash and maybe a few headaches.
6. Outsource, outsource, outsource. Some people believe (or can prove) their time is too valuable to waste on meticulous tasks or something they hand off to someone down the food chain. It may sound arrogant, but if you can justify outsourcing your work, then more power to you!
7. Maximize your deductions. A good CPA will, quite literally, sit down with you and ask you for a brief financial history. They do this to get enough background information to maximize your tax deductions. Everyone knows that mortgage interest or student loan interest is deductible, but little known items such as moving expenses, travel expenses or home office deductions aren’t as well known, and can be quite complicated. It’s possible the amount of money the accountant saves you in tax deductions will be less than their fee.
8. You don’t have time to do it. I know several people who literally have so many things going on in their life (e.g. family, soccer practice, medical school, etc) that they honestly feel they don’t have enough time to do their taxes, much less do them correctly. If you’re constantly on the go who can’t make the time investment, a CPA might be the way to go.
9. You need tax advice related to investments. There are a lucky few who have acquired a significant amount of wealth over their lifetime, and need tax advice to minimize their investment losses when adjusting or tips to reduce their annual income taxes (e.g. tax loss harvesting).
10. You simply don’t want to deal with the headache. April 15th is probably the most loathsome date on the American calendar. Every year, we suffer through constant advertisements, last minute number crunching and an hour long line at the post office just to get that precious April 14 postage mark. For some, it’s simply much easier pay someone else to do it for us.

What about you? Got any other reasons you would use, or are using, an accountant?

Photo by blmurch