When should you consider hiring a tax professional?
- When you are new to filing taxes
- When you are earning more
- When you have a complicated financial situation
With many online services in the Philippines such as online tax calculators and tax management software, people now have many ways to do their taxes.
This doesn’t mean that you should always do your taxes on your own. For people who are new to the experience, it might become very overwhelming.
Listed below are the 3 instances when you should definitely consider hiring a tax professional!
When You Are New to Filing Taxes
Doing taxes can be frightening if you’re a first-timer. Chances are, there is a lot you don’t know about it until you look it up on the internet or ask others to teach you how. To be sure of the information you get, it would be better to consult a tax professional.
Tax professionals will not only help you with your taxes but will also teach you the basics of it. A good advantage of hiring them is that they are knowledgeable in all of the laws that pertain to taxes and finances. For some, it will be your introduction to tax refunds, deductions, credits, exemptions, and many other financial terms that aren’t necessarily common knowledge.
When You Are Earning More
Taxes changes alongside your income bracket. Simply put, the less you earn, the simpler your taxes are; the more you earn, the more complicated your taxes become.
When your income reaches six digits or more, many of the tax deductions, credits, and exemptions begin to phase out. If you’re relatively inexperienced in this aspect of doing taxes, then getting a tax professional to do help you will bring significant results.
This way, you won’t have to worry about where your money will go to.
When you have a complicated financial situation
Whether you want to or not, there is always the possibility that you may find yourself in a difficult financial situation.
One of these is having multiple sources of income. For example, if you have an investment property, investment income, traded foreign exchange currency, or even sold a few bitcoins aside from having your day job, you might need help classifying all of these and reporting them properly. The easiest way to do this is to get a tax professional to assist you.
Operating your own business also requires you to hire a tax professional because they can be a huge help when avoiding potential dangers. When running a business, particularly a new one, it is easy to make mistakes that will significantly cost you. Hiring a tax professional can help reduce your burden and focus on the growth of your business.
Another complication would be a change in civil status. Whether you get married, annulled, or become a widow, this change will definitely have an effect on your taxes.
When you get married, you and your spouse have the option of either doing your taxes jointly or separately. Depending on who earns what, you will be given either marriage bonuses or penalties. When you have people under your responsibility, these people (your dependents) change the overall amount you owe in taxes and any refunds that you may receive.
Getting an annulment makes things a bit more complicated with factors like child support, alimony tax credits, medical bills, exemptions, and retirement assets. All of these can change your taxes significantly. Make sure to contact a tax preparer when you’re facing an annulment to discuss your options. This can help avoid any unpaid tax liability of your ex-spouse and detail any alimony and child support paid.
In the unfortunate event of your spouse’s death, you may have to take on the task of federal estate taxes, state inheritance taxes, and more. A tax professional will help file the final tax return of your partner and reduce the amount of taxes you may need to pay.
Taxes are very important to your daily life. You have to make sure that the information you give is as accurate as possible. In the Philippines, online tax calculators and tax management software can be of great help. Admittedly, some cases will require the assistance of a tax professional.
If you’re not sure about your financial situation and information and if you’re not confident about your knowledge of taxes, then consider hiring a tax professional to make your life a little bit easier!