Should I Prepare My Own Taxes or Hire a Professional?
Preparing your own taxes might be alluring, but hiring a professional for your tax preparation is one of the best investments you can make. Technically an IRS tax form is supposed to be able to be completed by somebody with a 7th grade education. I guess that means we should hit up the local middle schools for free tax prep, right? But in all seriousness, unless you are extremely familiar with tax prep and tax laws, even those 7th grade level forms can cause major headaches for individuals who self prep.
Why Not Purchase Software?
Excellent question, actually. Thanks for asking. It’s true that tax prep software will cost you less than hiring a professional to prepare your return, but there are pitfalls associated with home-based tax prep software programs. Tax professionals often spend upwards of $2K on software. It is far more sensitive and less likely to cause errors in completed returns. Another disadvantage of these types of software programs is they tend to give users a false sense of security. Users suddenly feel they are extremely adept at handling any and all tax situations which may arise, and this simply isn’t the case.
Benefits of Hiring a Professional
Professionals offer more than just fancy software for preparing taxes. There is also a human touch that you aren’t likely to get with purchased software. What that means is your tax professional can often help make tax savings suggestions that computer software is incapable of making. Whether it is saving for a child’s college tuition or reducing taxes on investments, a tax professional will be able to offer that personal advice and suggestions that is impossible to pick up in a software program.
Experienced Tax Professionals Can Save Overall
Sure, it’s less expensive initially to buy your own software and file your own taxes. But experienced tax professionals know what deductions to look for. So while they might more expensive initially, you are likely to get a larger return because they know where to find deductions that home tax prep software can’t find.
Did You Know the Fee You Pay a Professional to Prepare Your Taxes is Deductible?
It’s true! You can write off the cost of the tax preparation! Do you know how to do that in store-bought software? Probably not, but your tax professional does!
Another benefit (as if you need one?): your tax professional is available to answer questions and address issues all year long–not just during tax season. If you have a complicated tax situation, your tax professional should be able to help you save time and aggravation because they are so familiar with the system and the laws. This makes it quick and easy for them to answer or address questions that might take you hours of time and research (and then still not understand).
Hiring a tax professional is a personal decision. While it may cost a little more for an individual to hire a professional than to buy software at Walmart, there is the assurance and peace of mind that your return is prepared free of errors and with your best interests in mind. Also, for more information on tax prep, visit irs.gov.