As tax season is nearing, people scramble to search Google for the easiest way to complete their taxes while getting the fattest refund check. Just like personalities or faces, there is no tax situation that is the same so there is no clear-cut answer as to if you should do your own tax returns.
Depnding on the size and complication of your tax situation, you may need to budget hundreds of dollars when using a high-tier tax professonal. On the other hand, using tax software may be cheaper than dinner at a restaurant. Of course, if you or your tax advisor make a mistake, the consequences will be even more costly.
Your Own Experience and Understanding of Tax Laws
Many individuals are capable of completing and submitting their own tax forms withuot professonal assistance. This only requires experience and due diligence when following certain guidelines set by the IRS and making sure calculations are correct.
For a typical individual filer, only a few hours are needed complete everything if you know what you are doing. If it is your first time, expect between 2 to 3 days to learn the ropes.
Using Tax Preparation Software
For those that lack the patience to learn everything published by the IRS yet want a DIY solution, using guided tax preparation software is an economical solution.While there are plenty of web calculators or free trials available, having a full-fledged software suite should cost under $50. As a business, you may need to budget a little more for premium software to work out complicated kinks of the tax code.
Check out our list of Tax Preparation Software
When to use a Certified Accountant
An individual filling out a W-2 isn’t all that complicated. On the other hand, if you own a business or have a high-net-worth, things may start to be complicated. This is when having an accountant becomes critical.
As a small business owner, or someone with varied sources of income, there may be lots of tax write-offs to incorporate into your tax return. An experienced accountant will know the nuances of these writeoffs so that you may save even more on your taxes.
If the IRS audits you, this is also the time to hire a CPA. Aferall, negotiating with the IRS can be tricky and giving the wrong information may become expenseive.
Deciding whether or not to do your own taxes depends on your personal situation.. If you know the rules and things aren’t too complicated, it may be the right thing to do to save money. When hiring a professional to do the job, however, you’re working with someone who’s familiar with all tax laws and who can give you guidance through the year.