Tax season comes around quickly, and before you know it, it's time to file your taxes again. You may be used to using computer programs to do your taxes yourself, but that's not always the best idea. In certain circumstances, it's better to let a certified public accountant do your taxes. Here are four times when you shouldn't do your taxes yourself:
1. You run your own business.
Taxes can be especially difficult for people who are self-employed, or who run their own business. You may end up overpaying or underpaying, and you'll have to make quarterly tax payments. A CPA can help you navigate your tax forms and help you avoid fees for missed tax payments.
2. You earn a lot of money.
For the purpose of taxes, high earners are those who make over $200,000 annually. If you make more than that, experts say you're more likely to be audited by the IRS. If you know the government will be closely scrutinizing your taxes, it's a good idea to make sure they're done right. A CPA can use their expertise to carefully prepare your taxes so you won't run into any trouble.
3. You received a monetary gift.
If you received a monetary gift last year, you should consult a CPA before filing your taxes. Gifted money is tax-free up to $15,000 per person, according to H&R Block. After that, you will have to pay tax on money that you receive. However, there are some exemptions. For instance, you don't have to pay taxes on money that a spouse gives you. You also don't have to pay taxes on money gifted to pay for tuition or medical bills, as long as that money went directly to your school or hospital. A CPA can advise you based on your specific situation so you don't end up overpaying for taxes due to gifts.
4. You were given an inheritance.
If a loved one died and left you an inheritance, you may have to pay taxes on it depending on your state of residence. Certain states impose inheritance taxes, which you're responsible for paying. However, you may be exempt from inheritance tax if the value of your inheritance is less than a certain amount, which varies by year. Although the current inheritance tax threshold is $1 million dollars, that is subject to change, and it may be different depending on where you live. A CPA can advise you based on your inheritance situation.
For more information, contact a company like Emerald Financial Partners today.