As a responsible citizen, you should make sure to file your tax returns on time. Most people prefer to do their taxes themselves. However, there are times when it's wise not to do your taxes yourself. Finances aren't so straightforward to deal with, especially if you've got valuable assets in your ownership or have recently gone through a complicated financial situation. In such times, it is best to hire a tax professional.
If you want to know more about when it isn't a good time to do your taxes, continue reading ahead.
1. You've Made Mistakes in Your Previous Tax Returns
If you are no tax expert, you can make mistakes. Understandable. However, if you've made a mistake in your previous tax returns, it is wise not to do it yourself this time. You should hire a tax professional to make amends. If you don't rectify the mistake of the previous tax filing, you might be at risk of having to bear a lot of damage. However, a tax professional can help you minimize the damage.
2. You Got Married or Divorced
Getting married or divorced can change your tax status, complicating the tax return process. You might not know how to get your withholding amount adjusted or whether or not to file jointly with your partner (or ex-partner) or separately. In situations like these, hiring a tax professional is a wise thing to do. They can guide you through the process and file tax returns for you.
3. You Changed States/Territories
Let's say you moved to another state/territory in the middle of the year. Now, how are you going to compile your taxes when some portion of your taxable income was from another state/territory? Well, the situation can be pretty complicated to understand for a layman. This is where you might want to consider hiring a tax professional. Allocation of income and sorting taxes accordingly is something a tax professional would know the way around.
4. You Started a New Business
Not many people who start small businesses file taxes during the initial years. They assume that it is not essential. Little do they know that if they file tax returns in the early years of their start-up, it will help them in tax filings in the future when their business is a lot more established!
5. Foreign Assets
You might have invested in a foreign country in partnership with a family member or a dear relative who left you a foreign asset of considerable value in inheritance. You may not be gaining any monetary benefit from the asset, but you need to declare this asset when doing your tax returns. You may not know how to do it because you obviously don't go about investing in foreign assets all the time. In times like these, it's best to consult a tax professional.
It's not essential whether you file your tax returns yourself or have a professional do it for you as long as you're filing your tax returns on time as a responsible citizen should. We at Trilogy Tax can help you file your tax returns the right way, at the right time.