March 15th, 2011
DIY or Not: When Do You Call An Accountant?
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**Today’s guest post is contributed by LearnVest.**
We’re all about self-reliance, but we’re also realists. Deciding whether or not to DIY depends on your skills, interests, free time, and life situation. The questions can be far-ranging: Should you try to cut your own bangs? Hem your own work slacks? Caulk your own tub? Do your own taxes?
In our new series, “DIY or Not,” we ask the professionals, from stylists to plumbers, to tell us when not to hire them.
To kick it off in honor of tax season, we sat down with Lori Davis, CPA, Managing Partner at Grant Thornton LLP and a 2010 “Woman to Watch,” according to the Kansas Society of CPAs, for the inside scoop on when you need to go to an accountant—and when it’s simply not worth the cost.
Note that, in addition to plugging numbers into your tax return, accountants can also help you plan out your investments, savings, estate planning, and life choices from a tax perspective. So, while a financial planner might advise you on investments to buy or sell, an accountant would advise you on how those transactions affect your taxes. Those services make more sense for some people than others.
Here’s how Davis broke it down:
Don’t call me if:
- You have simple taxes, don’t have your own business, and feel confident that you understand what’s being asked of you (even if it’s just TurboTax that’s doing the asking).
- You don’t itemize your deductions.
- The things you itemize are relatively standard, like mortgage interest, cash contributions to charity, or state income tax deductions.
- You have investment income from things like stocks, but you’re not part of any complicated business partnerships and don’t have stock options.
- Your taxes don’t involve anything that you find terribly intimidating or unusual. (Even if you need to report alimony, tax software like TurboTax will usually do the trick.)
- You aren’t planning any big life changes right now that might affect your taxes, like marriage, kids, buying a home, starting a business, or planning your estate.
- You are a standard, salaried employee without fancy stock options or partnerships, you don’t freelance on the side, and you plan to stay that way.
Read more about when to call on an accountant on LearnVest!
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