Is DIY Tax Preparation Right For You?

Does the very thought of preparing your own tax return make your head hurt? Do you get green around the gills at the thought of paying someone else to prepare your return? Well folks, if you haven’t already gotten the memo, it is tax time. This means regardless of how tax preparation makes you feel, it is time to make that decision. Here we look at some factors to consider when deciding who will prepare your tax return this year.

Do you have experience?

You don’t have to be an accountant or professional tax preparer to have experience. If you have prepared your taxes in the past and feel confident in your ability to do so, then it makes sense for you to continue with the strategy that has worked in the past. It helps to be somewhat up-to-date with changes in tax laws, however this is not mandatory. With online tax preparation software, most filers are taken on a hand-held journey through the tax preparation process.

Do you have questions regarding certain tax issues?

For filers with a simple return, there may not be too many questions which arise in the preparation process. On the other hand, individuals or couples with a more complicated tax situation may have questions or other issues they wish to discuss with a tax professional. The IRS provides plenty of answers to frequently asked questions on their website. In addition, free assistance is available to filers with an earned income at or below $58,000.  Anyone with questions regarding tax issues should address these questions prior to filing their return, regardless of who ends up preparing the return.

Can you afford to hire a professional?

As previously mentioned, there is free help out there for those who qualify. In addition, at home preparation software is much more affordable than hiring a professional accountant. Expect to pay anywhere between $100 to $300 for fairly simple returns and potentially thousands of dollars for more complicated returns. Conversely, Turbo Tax offers editions ranging from $0 up to $129.95 to file federal taxes.

Can you afford not to hire a professional?

Taxes are a complicated business. For many individuals who may owe a tax liability or those looking to increase their refund, making a mistake can cost thousands of dollars. If you have any doubts as to how well you can handle tax preparation on your own, you may find shelling out a couple of hundred dollars for professional service is worth the cost if this move saves you a couple of thousand dollars in the end.