To help ensure you use every tax deduction you’re legally entitled to, it is best to work with a knowledgeable tax professional. Here are five reasons this partnership can pay off, not only with this year’s taxes but possibly with future tax bills as well.
1. YOU’RE A NEWBIE.
If you’re new to the work world, you may not realize how some simple steps like deducting interest on qualified student loans and putting money into a traditional IRA or company 401(k) plan can reduce your tax bill.
2. YOU OWE MONEY.
A tax professional can tell you how choosing the right number of exemptions for your paycheck withholding or making the correct quarterly estimated tax payments can potentially save you interest costs and underpayment penalties.
3. YOU GET A REFUND.
Getting a tax refund from the IRS means you gave an interest-free loan to the federal government. Deduct the right amount of money for taxes and direct what used to be your refund to long-term college and retirement savings vehicles.
4. YOU HAVE TUNNEL VISION.
Maintaining a focus on one goal, such as reducing taxes, can come at a steep cost if you don’t look at the bigger picture. You might, for example, combine current and future goals for your business by investing in new technology that is both tax-deductible and makes your company more productive and profitable now and in the future.
5. YOU NEED INFO YOU CAN TRUST.
Dubious tax information can cost you. A tax professional can help you make informed decisions, such as whether to sell a declining long-term investment or keep it because it has a favorable long-term outlook.