I think everyone needs a CPA for a friend.
They are generally:
- Available to listen to your not-so-subtle tax write-off questions
- Level-headed and analytical
- Smart problem solvers
- Empathetic and encouraging
- A whole lot of fun on April 16th
Julie Saad, one such wonderful CPA, and I became instant friends a lifetime ago when we were both just-out-of-college young professionals. At the time, there were very few of us who fell into that group, so it was no surprise our happy hour conversations turned toward finances, taxes, and planning.
Over the years, we’ve talked about our futures, discussed new jobs, got married, moved around, and had kids. While we’re no longer in that idyllic Chico bubble, we catch up regularly on the phone, and our conversations are still often about finances, taxes, and planning.
Such was the case this year, when I mentioned to Julie that now is the time when many of my friends and acquaintances begin to reach out:
“Is it okay to use TurboTax®?”
“Should I hire a CPA or Tax professional?”
The answer, of course, is the ever-evasive: “it depends.”
Everyone is coming from different places and will have different needs this tax season.
Like most things in our finances, our taxes become more complex when we have any major life changes: when things have been added or taken away.
To help you get started this tax season, Julie and I decided to put together a quick checklist to help you determine if you can do your taxes yourself—or if you might want to consider getting some professional help.
Reasons you might be able to do your taxes yourself:
- Your income only consists of a W-2 from your employer
- You like to figure things out
- No major life changing events occurred in 2021
Do any or all of the above apply to you? If so, software like TurboTax® can guide you step-by-step. In my professional opinion, it’s intuitive, easy-to-use, and does a great job.
Indicators you might need help with your taxes:
- You own a business
- You own rental property
- You got divorced in 2021
- You moved to a new state
- You sold real estate or other investments
- You have investments in cryptocurrency
- You receive a K-1 from another entity (trust, S-corporation, or partnership)
These scenarios can help you get a general idea of how to think about preparing your taxes and a good place to start. However, as a tax professional and financial advisor, it’s important that I point out these are just a few examples. Sometimes these scenarios aren’t standalone events, or they have other complexities.
Planning ahead can make a huge difference and get you well prepared for each tax season. I’d love to help! At Mosaic, we’re available to talk through your unique situation and guide you through the process. You don’t have to navigate the murky tax waters alone!
So, ready to get started? Before you do anything else, do a quick review of the questions above and then look back over the last year. Take an inventory of any major changes that happened, both good and bad. If you have a file folder or digital records of tax documents, papers that seem important, dig them out and find them.
No folder? Assemble your “Important Tax Document” letters on a corkboard, add them to a file folder, or keep them all in a drawer. Whatever works best for you, keep them all in one place! While you’re at it, make a folder for 2022. It’s a good idea to have a physical folder for paper documents and a digital folder on your computer.
Once you have your documents ready, send me an email! I’d love to answer any questions you might have before you jump in.
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The opinions expressed herein are those of Anna Nelson and are subject to change without notice. This material is not financial advice or an offer to sell any product. Forward-looking statements cannot be guaranteed. This document may contain certain information that constitutes “forward-looking statements” which can be identified by the use of forward-looking terminology such as “may,” “expect,” “will,” “hope,” “forecast,” “intend,” “target,” “believe,” and/or comparable terminology. No assurance, representation, or warranty is made by any person that any of Anna Nelson assumptions, expectations, objectives, and/or goals will be achieved. Nothing contained in this document may be relied upon as a guarantee, promise, assurance, or representation as to the future. Anna Nelson is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training.
