How much money a CPA can save you

Tax preparation can be overwhelming with the many options available, from using an online service or software to hiring a CPA. While doing your own taxes might seem appealing at first, it’s important to consider how much money a CPA can save you in the long run. Let’s explore the cost effectiveness of working with a tax professional compared to doing your own taxes.

It’s not just about the money

Understanding how much money a CPA can save you can significantly reduce your stress, helping you to focus on long-term financial planning. By leveraging their expertise, you can ensure that your financial future is well-protected.

Tax Laws

The United States tax code is notoriously complicated, with over 2,500 pages of laws and regulations. For most people, understanding these rules is nearly impossible. CPAs are not only experts in these complex codes, but they also keep up with all frequent tax law changes and updates. In addition, they can prepare your forms accurately and efficiently, ensuring you file a precise tax return. This often means a lower tax bill, letting you keep more of your hard-earned money or get a bigger refund.

Saving Time and Money

One of the top reasons to hire a CPA is the opportunity to save money. A survey of 2,000 taxpayers revealed that self-filers got an average refund of $1,775, while those who used a tax professional got an average refund of $2,615. That’s a difference of $840 in savings. So, while there are upfront costs, the value of hiring a CPA makes it a worthwhile investment.

The saying “time is money” is especially true for tax preparation. On average, people spend about 13 hours preparing their own taxes. For business owners and those who itemize deductions, this process can take even longer. By hiring a CPA, you can save significant time, which can be better spent on growing your business.

Audit Protection

Finally, facing an IRS audit can be stressful, especially if you prepared your own taxes. About 1 in 103 individuals making under $100,000 a year are audited, and the likelihood triples for those earning over $200,000. Many audits stem from simple errors that a professional could have prevented. However, CPAs provide peace of mind by ensuring your return is accurate and offering support if you are audited. Plus, reputable tax preparers often guarantee their work, and will take responsibility for any mistakes or liabilities.

And it’s not just about this year

In conclusion, knowing how much a CPA can save you is key to optimizing your tax return and staying compliant with complex tax laws. In fact, the only downside of receiving a tax refund is that you overpaid during the year. By leveraging a CPA’s expertise, you can successfully navigate tax laws and make informed decisions for your long-term financial planning goals.