Time can be invaluable; and when lost spending it with family and friends, it’s irreplaceable. For day traders, it’s a commodity that always seems in short supply. The Executive Summary of National Taxpayer Advocate 2010 Annual Report to Congress, compiled from IRS data by Nina Olson, showed that taxpayers and businesses spend 6.1 billion hours a year complying with tax-filing requirements. To place this in context, it would require more than three million full-time employees to work 6.1 billion hours. This makes “tax compliance” one of the largest industries in the United States.

Time away from our families and profession is not the only reason to consider hiring a day trader tax professional. Olson’s report found that around 60 percent of individual taxpayers pay a professional to prepare their return. Due to the complex nature of compliance, finding special tax breaks and loopholes within the Tax Code proved difficult for the remaining 29 percent of taxpayers who used tax software or others who could not afford professional help.

Is preparing a single tax return really that complicated and time consuming? After all, I can prepare and efile my return in less than an hour…

Taxpayers can always expeditiously prepare and file their tax return. However, a correctly filed return takes time and professional knowledge - especially with the added complexities of day trading tax rules.

IRS Recommendations for Choosing a Competent Tax Professional

When purchasing goods or services, you hear the common phrase, “You get what you pay for”. Unfortunately, this is not always true. To help assist you finding a qualified tax professional, the IRS has its own recommendations. The number one recommendation from “IRS Tax Tip 2011-6 – Points to Keep in Mind When Choosing a Tax Preparer” is:

Don’t be fooled by firms touting they have CPAs and enrolled agents. An important thing to ask when you are inquiring about a tax preparation firm is, “Is your firm registered with the State Board of Accountancy?” In order to hold a CPA license, a CPA has to be registered with the state board. HOWEVER, only firms with 50% or more CPA owners can register with the Board of Accountancy.