Monday, March 14, 2011
Money Monday: When To Hire A Tax Professional
In an effort to save money, lots of us do our own taxes but in tonight's Money Monday, Seven's Lynn Martinez shows us why hiring a tax professional might save you more in the long run.
WSVN -- Nelda Fonticiella used to do her own taxes until she realized little mistakes were costing her big money.
Nelda Fonticiella: "I did it myself for about four or five years. I added it up and it was about $10,000 I had missed out on because I didn't know."
Tax laws are constantly changing, which is why tax experts like Daniel Farmer say it's easy to miss deductions or even worse, make big mistakes.
Daniel Farmer: "When they do it them themselves they are not familiar with where items go in the tax return, they put it in the wrong line or do not think they need to report that. And making mistakes for the IRS could result in substantial penalties and interest."
Now that's not to say everyone needs to go to the experts. The general rule is hire a tax professional when you get married, have kids, start a business or have investments.
Daniel Farmer: "We keep up the data, we know what those tax changes are how they affect you when you do your taxes and where the savings are."
Nelda learned from her mistakes.
Nelda Fonticiella: "There was a certain amount of time I had to reinvest to roll over my money. I didn't do it on time I got penalized for it so little things like that that Im learning."
Hiring someone to do your taxes costs a couple hundred bucks, but considering they can save you thousands, it might be worth looking into.
Nelda Fonticiella: "Well, I know from experience that it's best to go see a professional to go do your taxes."
Lynn Martinez: If you are considering hiring a tax expert, ask for references and make sure they will be available to answer your questions even after your return has been filed.