LinkedIn Answers' Question of the Week | Personal Taxes

With Tax season fast approaching, Im sure many of you have tons of questions racing through your mind. In the midst of such noise the easiest way to find clarity on unanswered questions would be to turn to your professional network on LinkedIn. And, thats exactly what Jack Chou (from our product team) did when he asked the following question on LinkedIn Answers under the Personal Taxes category. The two Best Answer selections for Jacks question: The first of the two best answers came from a CPA at Wicks Emmett Hatfield amp; Chappell CPAs Tax professionals offer a wide array of services in addition to tax preparation, such as tax planning, audit representation, et al. TurboTax cant represent you during an IRS audit or before the courts. You should go see a tax professional if you have opportunities to save money on your taxes by doing something before the end of the year - Is the AMT going to bite you? What can you do to prevent it? You should also go see a tax pro if you think that a position you want to take on your tax return has a chance of getting audited - Did you win a lawsuit with arrangements that could be construed as lost wages? You should definitely see a tax pro when it costs you more in terms of time and money when you do it yourself - How much did the box cost? How much time are you spending at the computer entering the information and what else could you have done with that time? Did you miss some nuance of the tax law that could have saved you some more money? Stock options are difficult to do on your own because an ISO isnt taxed when exercised for regular tax purposes, but is ordinary income for AMT purposes. This really hit home many years ago during the tech boom with the people who got hit with huge AMT tax bills because they exercised their ISOs and then the stock was sold at a loss a few years later - Merlo, Tax Court, April 25, 2006. Real estate can be tricky because if buying and selling land is your job then the land counts as inventory and any gain would be ordinary income subject to self employment taxes if you file a schedule C. If you hold onto land as an investment then it is a capital gain. But what if the land also includes a house? What is the value of the house versus the value of the land? Is it your primary residence? Is it a rental? Did it switch from a rental to your primary residence? Do you want to figure out the depreciation every year? What would the depreciation be? When you have more questions than answers for a particular area of the tax return, you should see a tax professional. --- The other selected best answer was posted by the editorial director at the Financial Publishing Group at Newsmax Media, Inc. I started using an accountant soon after having kids. Not that kids changed my financial position so drastically (love those little tax deductions, love em to death!) but because I simply didnt have time for it. Youll find that hiring a preparer is a wash, kind of. You still have to gather and understand your documentation, which takes time. That said, sticking with a good one means youll start to see a consistency in the work, youll notice deduction opportunities throughout the year, and youll rest assured that (in most cases), a pro will be aggressive on your behalf without being nutty. I would never go back, for one. My tax guy runs me about $350 a year (deductible as well) but its absolutely worth both my time and the satisfaction of knowing its done right and to my advantage. And, theres more. Feel free to check out 13 more answers to Jacks question, all of which provide unique perspectives that may prove valuable for the tax season. While youre at it, check out all other questions within the Personal Taxes category or even ask your own question on Personal Taxes to your professional network. Did you know? There are seven sub-categories under the Personal Finance section within LinkedIn Answers | Individual Insurance, Personal Debt Management, Personal Investing, Personal Real Estate, Personal Taxes, Retirement amp; Estate Planning, and Wealth Management!