Finimpact

Frequently Asked Questions (FAQ)

Should I Hire an Accountant to Do My Taxes?
Definitely. The IRS estimates that it will take the average person 16 hours to complete their own taxes, and this is if they already have an idea of what they are doing. This is when completing Form 1040, used by nearly 70% of US taxpayers.

And you also run the risk of filing taxes in the wrong way, meaning you pay more anyway. If you have extremely basic tax requirements, then it might be a viable option. But the basic version of accounting software can do this for you, for less than $100. It’s a definite time-saver to get software or an accounting professional to complete this task. The more complex your taxes, the more urgent is the need for a professional.
How Much Should an Accountant Charge for a Tax Return?
This will depend on the type of tax return you are filing. The information given above should serve as a good reference to what an accountant should charge for a tax return. Generally, the most basic filing will cost between $173 and $273, depending on whether you are filing itemized deductions or not. However, if you are filing a Form 706 (which deals with estates), it can cost upwards of $1563. It really depends on the complexity, organization, and volume of your tax returns.
What Do Accountants Charge per Hour?
There is no real set fee that accountants can charge. If your accountant is CFA accredited or also happens to be an attorney, the hourly fee can shoot way up. But, in many instances, this degree of specialization is only necessary if you have a very specific need for a certain type of knowledge. For the basic tax return, you can find a freelance accountant for as low as $25 per hour, but average costs might be a little higher than this figure. Accountants can often gauge what the filing will cost, but you will need to pay the extra hours for consultations as required. For professional accountants, you can expect to pay between $75 and $150 per hour.
When Should I Hire an Accountant?
People often complain about the cost of accountancy services in terms of tax filing – but this is largely unwarranted, given that it is a once-off fee! The time to hire an accountant is before the tax deadline, the sooner the better. The tax deadline is around April 15th each year (can vary a little). But returns are accepted sooner than this date, as early as January. This year (2020) is a special year and the tax return deadline has been extended due to the COVID-19 pandemic.
How Do I Find the Right Tax Accountant?
You simply need to find someone with the relevant credentials to file your tax returns. Basic tax returns are not really that complicated. So once you find a qualified tax professional, you are good to go. The issue can get a lot more complicated if you have a need for an expert, and the charges will match. But for basic filing, nearly any accountant will do. You are paying them to file your taxes, and if they cannot do the job, they can get fined.
How Long Does It Take an Accountant to Do Your Taxes?
The time varies greatly depending on the complexity of your taxes, the volume of your taxes, and how busy the person is. It can typically take between 2 – 4 hours if you have submitted all of the relevant documentation. For software applications such as TurboTax, it takes between 4 – 6 hours, but remember that this is your time. It takes the average person 16 hours according to the IRS, but this includes gathering all of the documentation and trying to figure out the answer to various tax-related questions. The good news is that the accountant is always going to have your returns submitted by the deadline in Mid-April, and it is not your fault once your documents have been submitted.
What Software Do Accountants Use?
Accountants will use a variety of software depending on their preferences and areas of expertise. However, generally, Intuit Quickbooks seems to be one of the most popular applications right now, used by a variety of business owners and professional accounting firms. Xero, Sage, and Waves are also viable options. It’s worth noting the difference between accounting software (Intuit Quickbooks, Sage) and tax software (TurboTax, TaxSlayer). Accounting software is for accounting activities that have a wide variety of functionality. Tax software is specifically for people and business people looking to complete their taxes. But accounting professionals can submit returns without using direct tax software. Once the forms are sent (correctly) to the IRS, electronically or physically, the project is completed.
How Do I File My Own Taxes if I Own My Own Business?
Technically, anybody can file their own taxes. The problem is that there are many nuances and it can get especially complex when dealing with deductions. For the purpose of filing taxes, a lot depends on your legal entity type. If you own a Sole Proprietorship, you need to file a Schedule C attachment along with your personal income return. For an LLC, you can file just Schedule C, as long as you are the sole owner. Remember to have all records at hand when filing taxes. You are going to need them.
How Do I File Taxes if I Live Abroad?
You can file taxes no matter where you live and have a few means of doing it. You can even hire a US-based professional and send them all the documents by secure email. Technology has limited all barriers. If you live outside the US, however, you are advised to use the IRS Freefile service. This is a brand name tax service. In order to be eligible, you must earn below $58,000. In addition, you will need to file a different form, namely the form 116 foreign tax credit. Your accountant should be able to run through all of the details. But the Freefile software can also run you through the relevant questions. You can get your tax refunds in less than 10 days, as long as you have a US bank account.