When to Hire Tax Professional, Preparer, or Accountant?Last Revised on March 14, 2012
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For many tax seasons come and go, but for others such as self employed and owning a home based business requires that they keep taxes in mind all the time. Even for a person individual who has various sources of income as well as expenses, it could get complicated and involve so many tax forms. Therefore, one may start wondering if seeking help from tax preparer more beneficial than filing it yourself to prevent errors and getting audited by IRS.
Is Hiring Tax Pro like HR Block worth the Money?
Lets look at what factors to look at when considering whether you should file taxes yourself or seek help from professionals:
1. Basics of tax process: first thing to ask is do you have the basic understanding of tax preparation such as W2, 1049, 1099, MISC forms, etc. If you have filed taxes before, you can file yourself now too even if this time you have more forms due to increase in income and expenses. Otherwise you will have to go with tax pro like HR Block.
2. Willingness to learn: like any tasks, filing taxes require you learn how to do it first. You learn things by doing them. Now a days it is so easy to file taxes due to efile system availability, you do it on the computer and it takes you through each step one by one. There are also many tax support forums and chatrooms online where you can ask for help when you get stuck.
3. Simple or Complicated returns: most of people have very easy tax returns to file because they worked at only one job, they are single, no kids or divorce, no special expenses, etc. These individuals file very simple tax returns such as 1040; if you fall into such categories it is much better if you file yourself because you will not only learn how to do it yourself, but also save money on fees and commissions. However, if your total income is a lot and came from many different sources such as stock investments, equity, businesses, etc then maybe hiring tax professional or an accountant maybe worth your time, not saving some quick bucks.
4. People who use tax professional: generally people who use help of professional tax preparer are those who earn living from short sale on real estate and properties, rental and lease income, self employed business, and investment sales or returns. Some of these even have permanent financial accountant.
5. Reasons people use tax pro for simple returns: many tax returns filed every year are so simple that anybody who can read and follow simple instructions can do it themselves. But some people still go to tax preparation services because these professionals maybe able to get higher refund or lower the amount of money owed to IRS, saves time, assist with audit, and avoid mistakes.
6. Do it online: as more and more people start to use computer, they start to file taxes online too. It’s called efile and very easy as it only requires you to put in information you know and will tell if the filer is missing any information. Many state taxes are filed online too. It is so much cheaper than hiring a tax pro.
7. Need help filing taxes but can’t afford? If so look for free tax preparation services such as VITA and AARP. A lot of these organizations offer free tax help for people with low income and seniors. Also many communities have tax volunteers, look for their info in communities newspaper and magazines.
In conclusion, list of pros and cons of hiring someone to do your taxes:
Advantages of hiring a tax professional are their expertise, experienced, up to date information, increase tax breaks, maximum refunds, lower taxes, saves time and peace of mind.
Disadvantages of hiring a tax preparer and not doing it yourself: cost you less money if you use efile, loss of time, less accuracy, and more chances of making mistakes.
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