by Jeremy Conn on January 19, 2017
You can start filing for your 2017 individual income tax season starting January 23. So, do you take care of it yourself or do you hire a professional?
If you’re looking to save some money, preparing your taxes yourself can be tempting. I used to take advantage of IRS.gov Free File so I could save a few bucks, but that was when my returns were simpler. It was also before I researched, and eventually hired, a professional.
While the self-service tax industry seems to be more popular than ever, after speaking to some Enrolled Agents (EA), the only federally licensed tax practitioners, I’m glad I’ve decided to hire a tax professional.
Before you prepare your own taxes this year, consider these five reasons you should hire a tax professional for yourself.
Your Tax Situation Isn’t Simple
If your tax return is simple, you could probably get away with filing your taxes yourself, according to Crystal Stranger, EA and president of 1st Tax. “Generally speaking, if your only income is wages that come on a W-2, you do not have children and you don’t have work-related business expenses you claim, then self-preparing is probably the best way to go.”
So if you own a business, have children, have 1099 income or any other more complex tax situations, you’d probably be better off, and receive a better return, to hire a tax professional.
You Don’t Want to Risk Wasting Time or Money
Whether your return is simple or complex, if you handle the filing of your own taxes, there’s a chance you could make a mistake. And if there’s one place you don’t want to make a mistake, it’s on your taxes.
“I fix many mistakes from DIY folks. They come running in with tax notices, howling that they now owe thousands of dollars for their errors,” Abby Eisenkraft, an EA at Choice Tax Solutions Inc., explains. “And when I ask about certain items, they tell me that they didn’t understand the interview questions.”
My tax person charges only $65, which is a price I’ll gladly pay to avoid some IRS-induced stress. And just like making an illegal left-hand turn, ignorance of tax law is no excuse.
Tax Law Is, Well, Law
There’s a reason my tax person can charge $65 for less than an hour of work – tax law can be hard to understand. Plus, there are changes every year, which can make things more difficult for people trying to file their own taxes.
“EAs must maintain their competency in tax matters by taking at least 24 hours of continued education each year,” says Ira Smilovitz, an EA at Glenwood Tax Services.
He continues, “If you don’t know what you’re doing, you will produce a pretty return that’s useless.”
You Want the Best Possible Return
Do you want the best possible tax return refund? I’ll wait for your eye roll to complete … of course you do! You probably already have 10 ideas of what you can spend your refund on.
Thomas J. Williams, an EA who operates Your Small Biz Accountant, explains, “Your tax return is the foundation for a number of tax credits, as well as the source document for a variety of third-party opportunities, such as student financial aid and loans.” He advises that you work closely with a licensed accountant so you’ll have a more strategic return that’ll lead to a more favorable return.
You Want Personalized Advice to Plan Ahead
Even if you have a simple return, it may be worthwhile to hire a professional, especially if you think you’ll be in a different situation in the coming year.
If you’re switching jobs, buying a new house, planning to invest funds or anything else that will change your return for next year, a professional can help you plan ahead.
“They miss the opportunity for great advice,” Eisenkraft says. “Even a taxpayer who doesn’t currently have a complex return may not understand the benefits of a 401(k). I can show them the difference in what the tax return could look like, as well as point out benefits for the following tax year.”
While preparing your own taxes may be more convenient and cheaper, especially in the short term, it only takes one error to make it not worthwhile.
by Patrick Chismon January 6, 2017 from Saving Money
It’s a fascinating time in the world of investments. Prior to the U.S. election, it was largely predicted that, first, Donald Trump would lose to Hillary Clinton and, second, if Trump somehow won in November, the stock market would abruptly plunge 1,000 points. As it turns out, the popular opinion was wrong on two counts. Trump did in fact win the presidency, and instead of the market plunging, it skyrocketed 1,200 points in the four weeks since his victory.
The strength of the stock market is a response to President-elect Trump’s promises, many of which seem business-friendly, such as lower taxes, fewer regulations and the general goal of job growth. Since the election, the Dow Jones Industrial Average has even come close to topping the 20,000 mark.
So as an investor in 2017 – whether you’re a veteran or new to the game – what does all this news mean for you? In a nutshell, there’s still a lot of uncertainty about whether these increases are a sign of growing momentum in the U.S. or if the economy will fluctuate as the Trump administration settles into the White House. All that said, there are some industries that you should consider investing in now that the new year has arrived. Let’s take a look at three industries that could be good investments in 2017.
Note: Before you decide to invest, make sure you do your own research and speak with a financial advisor.
Infrastructure
Trump has plans to rebuild the nation’s infrastructure. This isn’t a new idea, as the Obama administration promised a $787 billion stimulus measure, some of which was allocated to bridges and roads. It caused some positive waves in construction and engineering stocks for a period of time and then settled back down once the legislation was actually signed.
According to online investment resource Motif, Trump’s plans will likely cause at least an immediate boost in infrastructure-related industries, such as energy, construction and manufacturing. But depending on how the legislation actually pans out, these gains may lose steam.
Health Care
With many medical advances being made – such as Alzheimer treatments and cardiovascular preventive drugs – 2017 may see a rise in health care stocks. With a faster FDA drug approval process and ever-moving technological advancements, drugs and treatments are getting better, as well as easier to produce. In addition, with the Baby Boomer generation transitioning into their 70s, there’s sure to be a greater focus on health care.
From a political perspective, there are still a few pieces up in the air. Given that President-elect Trump is promising to get rid of Obamacare, the outlook on this one is still hazy.
Technology
Between artificial intelligence (AI), big data and the Internet of things, technology is an ever-accelerating force that could be a great investment decision for you in 2017. Self-driving cars, which were previously thought to be over 10 or even 20 years away from being available to the general public, are now predicted to be just five years away. Ford has even said it plans to build its own self-driving cars for a ride-sharing service starting in 2021.
As for AI, companies like Facebook, Microsoft and Apple are investing heavily in improving their technology, which means Siri and Alexa may be getting upgrades in the next few years.
With regard to the upcoming presidential administration, there is thought to be a $1.6 trillion opportunity in this area within Trump’s infrastructure plan.
Stocks in 2017
With such rapid changes in the world of politics, it can be difficult to make an accurate prediction of what’s coming in 2017. But use this information to give yourself a foundation of facts to make your investment decisions. And if you’re looking for some specific stocks to buy before Trump takes office, check out this stock buying guide from our friends at the Motley Fool.
