Derek Morgan
Derek Morgan
Couple working with professional on tax and financial documents
Derek Morgan
Derek Morgan

    Filing Taxes with a CPA: Understanding Tax Laws, Benefits, and Maximizing Returns

    Filing taxes can be a complex process, but understanding the basics is crucial to maximizing your returns. The first step is to gather the necessary W-2 or 1099 forms. From there, you can manually fill out forms or use tax preparation software. After completing the forms, sign and submit them to the IRS. Before submitting, it's important to review your return for accuracy.

    Introduction to Filing your Taxes with a CPA

    A Look at Tax Laws

    Although tax laws can be complex, it's crucial to comprehend them to reap the maximum benefits from your taxes. Familiarizing yourself with the fundamentals of tax filing and deductions can optimize your tax returns, and comprehending the various tax laws can support this process. By understanding the tax laws, you can increase your tax deductions and credits, and also be well-prepared for any future tax-related concerns.

    To learn more about capital gains tax in real estate and how it can impact your finances, check out this informative blog post: How Much is Capital Gains Tax on Real Estate?

    The Benefits of Working with a CPA

    Working with a tax professional has many benefits, including getting valuable advice on tax deductions and credits and guidance on planning for future taxes. A Certified Public Accountant (CPA) is professional who's licensed to practice as a public accountant by completing the Uniform CPA Examination and has met the required educational and state-specific criteria. It is crucial to find a CPA with the appropriate qualifications and experience, examine their fees, ask for referrals, and ensure that they are familiar with state laws when searching for one. Finding the right CPA will ensure your taxes are filed promptly and accurately, and you receive the maximum benefit from your taxes.

    Doing taxes online

    Planning Your Taxes

    Organizing Your Financial Information

    Before filing your taxes with a CPA, gather all of your financial documents, such as income and expenses, loan and real estate documents, and tracking any deductions and credits, like charitable donations or medical expenses. Being organized ensures that your CPA has everything they need to get you the maximum return on your taxes. Keep track of every item that may be eligible for a deduction or tax credit and stay informed on any new tax laws that may affect you. With your CPA's help, you won't miss out on any potential savings. 

    Understanding Tax Benefits

    It's important to understand the different tax benefits available when working with a CPA to file your taxes. Deductions and credits are the most common tax-related items that you may be eligible for, but not aware of (as well as charitable donations and medical expenses). Homeowners can benefit from the mortgage interest deduction, while energy-saving home improvements could earn you a tax credit of up to $500. By working with a CPA, they can help identify such benefits and assist you in maximizing your returns to save on taxes. Your CPA can also help you determine whether itemizing deductions or taking the standard deduction is the best option for you.

    Filing Your Taxes with a CPA

    Gathering Necessary Documents

    Your CPA can provide you with a checklist of documents you need to provide in order to complete your return accurately. It's important to remember that your CPA can't complete your return without the necessary documents, which may include:

    1. W2 form

    2. 1099 form

    3. Bank statements

    4. Investment accounts

    5. Additional proof of income and expenses

    6. Proof of purchase for deductions/credits you are claiming on your tax return

    Submitting Your Tax Return

    Your CPA will confirm that all information is correct and complete prior to submitting it to the IRS. In turn, you should receive a copy of your return for your review and to make any necessary changes before submission. Then, they will send you the forms and instructions necessary for electronically filing your return, the quickest and most secure method of submission.

    Obtaining Your Tax Refund

    Your CPA should provide you with an estimated timeline for receiving your refund after submitting your tax return. This timeline can vary from several weeks to several months based on the complexity of your return. Your CPA should also provide you with information on how to track your refund through the IRS's online tools. Ask your CPA if they can offer additional guidance on expediting the refund process.

    Looking at tax statements at home

    Fiscal Considerations & Strategies

    The Financial Advantages of Homeownership

    When saving up to buy property, one of the most significant advantages is the tax breaks associated with homeownership. Homeowners can deduct state and local property taxes, mortgage interest, and certain home improvements on their taxes, making homeownership more financially feasible. Additionally, owning a home allows one to build equity, and property values typically appreciate over time.

    In certain cases, homeowners can also take advantage of tax breaks related to energy-efficiency upgrades. Like we mentioned previously, you can earn a tax credit of up to $500 for installing insulation, upgrading to energy-efficient windows, or other investing in other energy-saving home improvements. These credits can be applied to new or existing homes, and can significantly reduce the overall cost of homeownership.

    Finally, homeowners may be able to benefit from deductions related to mortgage interest paid. Homeowners could potentially enjoy substantial savings on their annual taxes by deducting up to $1 million of mortgage interest payments.

    Choosing an Investment Strategy

    Investors must also consider the timeframe they have to save for their down payment. Although stocks and bonds may offer higher returns, they carry more risk. Real estate investments are usually less volatile, but may require more time to yield significant returns. Lastly, it is crucial to comprehend the tax implications of each strategy. For instance, investing in stocks and bonds may offer tax-deferred growth, while real estate investments may provide immediate tax deductions. Understanding the tax implications can assist in choosing the best investment strategy for your specific circumstances.

    Additionally, consider the time frame for saving the down payment, with stocks and bonds offering greater returns over time and real estate investments requiring a longer time horizon. Finally, it's crucial to comprehend the tax implications of each investment strategy, with stocks and bonds offering tax-deferred growth and real estate investments providing more immediate tax deductions. 

    If you're wondering what to do with the closing statement at tax time after purchasing a property, check out this helpful blog post: What To Do With The Closing Statement At Tax Time After You Purchase A Property


    It's hard to fully grasp the tax ramifications related to selling your home or refinancing your mortgage without the assistance of an experienced tax expert. Working with a CPA allows you to reap the financial benefits of homeownership and make informed investment decisions.

    Buy a home and save $2,140 on average at closing with Unreal Estate. Or sell your home faster and take home $11,114 more on average by starting a listing.

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