When to Consult a Professional
While this guide provides a solid foundation, the world of tax and business law is complex and ever-changing. The DIY approach can be effective when you’re starting small, but there are definite moments when seeking the guidance of a qualified professional is not just a good idea—it’s a crucial investment in your financial health and peace of mind.
Remember, the goal of consulting a professional is to get personalized advice tailored to your unique circumstances. General information is helpful, but it cannot replace a one-on-one conversation about your specific income, expenses, and goals.
Signs It’s Time to Hire a Professional
Consider seeking professional help in the following situations:
- You’re Just Starting Out and Feel Overwhelmed. The initial learning curve can be steep. An hour or two with a tax professional at the beginning can help you set up your bookkeeping system correctly, understand your estimated tax obligations, and identify key deductions you might overlook. This initial investment can prevent costly mistakes down the road.
- Your Gig Income Becomes Substantial. As your business grows, so does the complexity. A professional can help with more advanced tax planning strategies to minimize your liability. Once your gig work is a significant portion of your total income, professional guidance is highly recommended.
- You Have Complex Deductions. While deducting office supplies is straightforward, things like the home office deduction or calculating actual vehicle expenses can be complicated. A professional can ensure you are claiming these deductions correctly and have the proper documentation to back them up.
- You Are Considering a More Complex Business Structure. If your business grows to a point where you are concerned about personal liability, you might consider forming a Limited Liability Company (LLC). This is a legal decision with tax implications, and you should absolutely consult both an attorney and a CPA before making this move.
- You Receive a Notice from the IRS. Do not ignore any correspondence from the IRS. If you receive a letter about an audit, a proposed change to your tax return, or a bill for unpaid taxes, your first call should be to a qualified tax professional. They can help you understand the notice and represent you in communications with the IRS.
- You Need Help with Retirement and Social Security Planning. A financial advisor who specializes in retirement can help you model how your gig income will affect your overall financial plan, including your Social Security benefits, retirement account withdrawals, and potential changes to your Medicare premiums (known as IRMAA).
Choosing the Right Professional: CPA vs. Attorney
It’s also important to know who to turn to for different needs.
A Certified Public Accountant (CPA) is a tax expert. They are your go-to resource for:
- Tax planning and strategy
- Preparing and filing your annual tax returns
- Help with calculating estimated taxes
- Advice on bookkeeping and record-keeping
- Representing you in an IRS audit
An Attorney specializes in legal matters. You would consult an attorney for:
- Choosing a business structure (like an LLC or corporation)
- Drafting or reviewing client contracts
- Addressing liability concerns and legal risks
- Protecting your intellectual property (like a trademark or copyright)
In many situations, especially as your business grows, your CPA and attorney may work together to ensure your business is on solid financial and legal footing. For general information from a variety of government agencies, you can always start with resources like USA.gov.
Disclaimer: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.
