Tax Preparation; Should You Go It Alone?
July 14, 2016
The decision to prepare your own taxes or hire a professional tax return preparer to do it for you, rests upon several factors, each one of which requires careful consideration.
We all know how important it is to get our tax returns right, just as we all know how costly it can be if we get them wrong. So what factors should you take into account when trying to decide if you should tackle your taxes yourself, or leave it to the professionals? Here are the top three points of consideration:
- How complicated are your tax circumstances?
If you’re not running your own business, don’t have money invested here, there and everywhere and have no dependents, then filing your own taxes should be reasonably straightforward.
If, however, you’ve recently started a new business or have factors in your personal life that may change matters, such as a divorce, you became widowed or had children, then you may benefit from hiring a tax return preparer. They are also able to view your circumstances with fresh, unbiased eyes and may spot elements of your tax return that you had overlooked, particularly if your recent circumstances have added an element of stress and worry to your life.
- How confident are you with number crunching?
If you simply don’t have a head for figures, find accounting too complicated or don’t have a clue about financial reporting, then it may not be wise to file your own tax return. If you’re running a business but struggle with these aspects of it, then hiring a tax return preparer would not only be sensible, but could save you and your business, money in the long term. Getting the figures right is essential to ensuring that your taxes are calculated properly, and second guessing at it just won’t cut the mustard!
- Do you have a sound knowledge of tax laws?
The laws regarding your taxes and how they are filed can vary from state to state, and can change as often as the wind! Keeping up with changes to laws and how they may vary depending on where you live, can be a challenge to say the least, and nobody would expect the average layman to be able to stay up to date with them all.
Professional tax return preparers on the other hand, make it their job to stay on top of such matters and will always have access to the most recent and updated information regarding tax laws. Hiring one would certainly ensure that you conform to the relevant laws, and would result in you never having to pay fines for inaccurate or late, filing.