Taxes are not an easy subject to navigate sometimes and leave people easily confused. Larger cities with higher median incomes, such as NY which has a median income of $50,711 can cause individuals to become overwhelmed not knowing where to start when it comes to taxes. Taxes may be complicated, but that doesn’t mean that you can ignore them. Ignoring them could hold worse consequences than any other option. Before you choose to take your chances with the IRS consider common questions tax accountants here, and read their advice below.
Withholding
One of the most frequently asked questions for a tax accountant concerns withholding on a check. Many individuals want to know that they are withholding the correct amount. Many accounting firms can assist you with this question, however there are other ways to get your answers. The IRS has a tool that many people can use to get answers to this question. While tax accountants don’t usually mind answering this question users should feel confident in accessing the IRS website to gather the answer to this question. Revisiting your withholding situation is important especially after a life change, and this website can assist with those changes. As always if there are changes or your information is too complex for the IRS tool, don’t hesitate to contact your local tax accountant for clarification.
Health Insurance
Many people also come to their tax accountants wondering what the penalty is for not being insured in the year 2017. Those who didn’t have insurance in 2017 will pay a penalty, but there are a few ways that this penalty is calculated. Some families will have the penalty calculated based upon their yearly income. Others will pay the flat rate penalty which is just under $700 per person and a little more than $2,000 for a family. The penalty will be calculated based on which method is greater. Knowing your yearly income is important to determine the amount of your penalty and your tax accountant can help you determine that amount. They can also help you determine the amount of the penalty and help you determine whether there are exemptions you qualify for to reduce or eliminate this penalty altogether.
Cost
Many tax accountants deal with this question although it doesn’t directly pertain to taxes. Individuals shop around to find the lowest price and determine who will help them with their taxes based on that. Things that should be considered are paperwork and time. Those who work a traditional job where taxes are taken out will have less paperwork than those who are considered contract employment. This means their tax returns will also take less time compared to those who are self employed. These things should all be considered when determining the price of services. Remember tax accountants are paid for their time, and the more time they spend on a return, the more they are going to charge.
Professional or Personal
Another common question is whether someone should hire a tax professional or attempt to file their taxes on their own. This too will come down to how much paperwork and time is going to be involved. Those who only have one W-4 and had the same job all year with regular taxes taken out and are not going to itemize deductions can benefit from using forms provided by the IRS. However if your tax returns are more complicated, and you have business income, investment income capital gain and other complicated terms along with itemizing your deductions, then going to the professionals might be the best choice. Always remember if you choose to go to a professional and figure out that IRS forms can be done you can always elect to file yourself.
Taxes don’t have to scare you and there is help available. It is true some things can be done on your own, but other complicated paperwork should be left to the professional. They are well versed, and chances are they have seen it all, so your situation is not a total shock to them. Consider the pros and cons to make the best decision when it comes to your taxes.