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Confusion in the Tax Code

March 16, 2015

If you have tried to do your own taxes in the past, then you are well aware of the headaches that the federal tax code can create. Imagine this situation:

A client asked if he could claim his son, Mark, because he was involved in over 50% of Mark’s financial support for 2014. Mark feels like he should not be claimed by his father, because Mark has his own daughter (Ashley) that he supports. Since Mark was attending college and working part time, his father paid for his tuition and provided health insurance, too. Mark’s part time job helped to pay for Ashley’s child support. Mark wants to file his own taxes so he can claim Ashley. Who should claim who? Challenging situations like this are why people need to hire tax professionals.

The Job of a Tax Preparer

As tax professional it is our duty to understand the tens of thousands of tax code, approximately 75,000 pages of it. While Mark’s situation might seem extremely confusing to people who do not work with the tax code for a living, it is not the most confusing situation that exists. It is actually a common and realistic situation.

Specialty Practices are Popular

With the extent of the tax code, it is common for many tax professionals to pick a specialty. Tax codes for real estate, trust and estate funds, small business, corporate tax, and even simple W2 tax returns. At Acceler8, we have tax specialists in all areas so you can trust that your tax return will be prepared to meet all of our unique tax needs.

Simplification Was Complicated

Thirty years ago the federal government thought they would simplify the tax code and remove the need for professional tax preparers, but the code was not made simple enough to do this. Taxes remained complicated and they have continued to follow this trend of complication. Most tax preparers actually saw an increase in business after 1986 because the gray area that confuses the average American. As lawmakers continue to try to satisfy the needs of the various groups that support them, lawmakers are regularly altering the tax code which makes tax prep increasingly challenging. Presidential candidates constantly promise an easier tax code, but the idea never seems to come to fruition.

Protect Your Finances with a Qualified Professional

If you think that you can use a free tax software program to do your own taxes, you could be making a big mistake. Unless you have just a W2 and minimal income, you will probably be fine. However, if you have some itemized deductions, you are much better off hiring a professional tax preparer to do your taxes. Think of it this way, if you have a paper cut, you are not going to see your doctor and pay for an appointment to treat it; but if you have a deep cut that needs stitches, you are not going to stitch up the cut yourself. Qualified professionals receive the qualification because of their expertise, in the medical world and in the world of tax prep.

So Many Complications, So Little Time

Individuals or families with children, second homes or income property, small businesses, extended family members living in their homes, or any complicated circumstances are best serving themselves by hiring tax preparers. Children create deductions, but the deductions change as they grow. Second homes or income property also come with complicated items, too. Small businesses are an entirely different animal when it comes to tax prep and no small business owner (other than tax preparers who are in business for themselves) should do his or her own taxes. When the IRS sees a complicated tax return that is not prepared by a professional, the IRS is good at finding mistakes during audits.

Have any Questions? Contact Us

At Acceler8, we are in business to help people like you with their tax returns and other financial needs. If you have any questions, please contact us through our website or via telephone at (480) 270-8325.

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