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What are "complicated" taxes that require a professional? (USA) (lemmy.world)

submitted 8 months ago by Copernican@lemmy.world to c/personalfinance@lemmy.ml

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I always see advice about which software to use and there's always the advice that FreeTaxUSA is the best bang for your buck and does everything you need for when your taxes are "simple." I've used and thought it was great for years. But as my career has grown and no longer filed as a single I've begun to question when my taxes and earnings become "complicated" to the point where it is worthwhile to have a professional do my taxes. Are there general recommended bullet points or scenarios?

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[–] e_t_@kbin.pithyphrase.net 9 points 8 months ago

I hired a professional to do my 2022 taxes. I had finally gotten access to an IRA that I inherited from my mother. She passed in 2014. Reading through the rules on inheriting IRAs, I knew I had missed RMD withdrawals, but I couldn't find satisfactory answers on how much I needed to pay. The pros were able to calculate that for me and told me the amount to withdraw. They also drafted a letter to the IRS explaining the situation and asking that I be excused the penalty for missed RMDs. I got a letter back from the IRS in February accepting the explanation.