Reaching adulthood involves a great amount of responsibilities, especially once we become independent and start living on our own. Although a lot of those responsibilities involve multiple fields, I would dare to say that the most important things young adults have to deal with are always related to finances.
From taking care of your monthly expenses to reducing costs on food and hobbies, there are many things that are related to money, and without taking proper care of said things, progressing in life becomes a lot harder.
As you might already know, this is often related to managing your money as wisely as possible, but there’s a very complicated part of money management that not a lot of people know how to deal with: Taxes.
Taxes, as shown over here, is something not all of us have to deal with. The IRS, also known as the Internal Revenue Services, is the organization which pretty much decides whether you have to file taxes or not, and this is completely dependent on your gross income, whether it is related to businesses, transactions, or your job.
The threshold that determines whether your gross income is eligible for tax filing can be found on the internet pretty easily, and since it tends to vary depending on various factors and circumstances, I encourage you to do so to understand more about it on a deeper level
It Might Not Be Enough
Of course, even if you decide to learn more about it, there’s a chance you might not even understand where to start or how to tackle everything. Considering how many things are needed to deal with it without problems, it is understandable.
That is why usually, if possible, people tend to rely on professionals instead. The ones that manage other people’s taxes are called accountants, and depending on your situation, this might even be the best approach possible.
There are many options out there, however, but a good example of an accountant group you can count on is BorderlessWealth tax planning group. Make sure to check them out to have an idea of what you can expect from hiring one, and some of the service they can provide, since this will give you a solid view on how accountants work.
You might be wondering, though… Why is it necessary to hire an accountant if you can do it by yourself? Well, let’s talk about taxes in more detail.
Understanding the Tax Nightmare
Now, let’s say that you are actually ellictible to pay taxes regardless of your financial situation and your income. Why do people find it so difficult to do it, and what’s the mystic behind it that scares a lot of new business owners or young adults?
Well… The first thing to note is that there are many factors that can influence the whole process considerably. For example, your current status can play a huge role in the tax filing process. Thankfully, the IRS provide a quick quiz to help you determine what status you should go for, but mainly speaking, these statuses include:
- Being single
- Being married and filing separately, or jointly
- Unmarried and head of the household
- Being widowed
There’s also a lot of paperwork, bookkeeping and documentation that needs to be done to manage the whole process as efficiently as possible, without any mistakes. And let me tell you that mistakes when it comes to taxes can be a little bit… Problematic, to not say the worst. Some examples of the documentation you’ll have to deal with are showcased at https://www.wikihow.com/Do-Your-Own-Taxes in case you want to learn more.
Relying on Accountants
There are two common approaches when it comes to handling taxes: Either learning yourself how to handle them, or straight up hiring an accountant. The two choices are, of course, feasible, but hiring an accountant is a much wiser decision under the right circumstances.
For example, the best circumstances to hire an accountant to handle your taxes, include:
- Being self-employed, since this really makes the process harder for freelancers, content creators, and other people that are earning a living by themselves without really depending on a company or employer.
- You are currently going through a difficult or big situation, such as buying a house, getting married or divorcing someone, receiving an inheritance, or simply moving out.
- You are a small business owner with little to no understanding of taxing
- You are renting a property to someone
- You are an investor
Simply put: The more complex your situation is, the more likely hiring an accountant is the right way to go. In fact, there are occasions where hiring an accountant might provide some benefits as well that otherwise you wouldn’t know because of your lack of understanding of the taxing world, thus… Consider the option if you can afford it.
Hiring an Accountant for the First Time
A lot of people might be intimidated by the idea of hiring an accountant because they don’t really know how the process goes. Surprisingly, it is easier than a lot of people might expect, mainly because they often explain all the aspects of the process and the way they will handle your taxing in a very simple way.
That being said, it is important to understand that, just like many other services or products you can get, there’s a chance you might end up hiring someone that doesn’t fulfill your expectations.
For that reason, it is always necessary to handle things with a little bit of patience, and to research potential options before hiring anyone. Ideally, you should have a list of potential options taking into consideration your budget and your location, so you go for an accountant that is both close, and affordable.
That being said, there are some other things you might want to pay attention to before hiring an accountant. Asking the right questions is, of course, a very important thing to do, so before you scratch any of your options, try to contact them before hand and have a nice conversation to understand their level of professionalism and whether they are the perfect choice for you and your taxing needs.