There are 3 key factors that go into deciding which route to take in preparing your taxes; the level of complexity of your tax situation, how much money you have to spend on tax preparation, and also how much time you have to spend on your tax prep. The options you have available for preparing your return include hiring a tax professional, getting the forms and preparing it yourself, or employing a software for assistance. Read through this article and it will help you determine which route is best for your situation.
A simple tax return would be one where all your income has come from traditional employers that provide you a W-2 at the end of each year. These simple employment and tax situations can be easily handled on your own. If you are knowledgeable in preparing taxes, you may want to get the forms and do them yourself, but if you have budgeted $30.00-60.00 for tax preparation, then you will find a software much simpler and helpful to use.
Some top rated online tax software includes TurboTax for its ease of use, H&R Block for its simplicity but also for its customer service if the tax return suddenly gets more complicated for you, and TaxAct which is affordable no matter which upgrades you might consider and you can prepare the return on your desktop rather than over the internet for added security, an option not commonly made available by tax softwares.
Buying software or the help of a professional might add some protection for you in case of an audit that finds errors in your return, so if it matters to you, be sure to inquire or ask what kind of liability the preparer or software will assume. Ask your professional if they will be able to legally represent you in an audit.
If your taxes are more complex- you own a business, have itemizing beyond a software’s expertise, or have big life changes that will be reflected in a return such as divorce, for example, you should consider hiring a professional. Your professional can assist you by having experience with your type of return and make sure you maximize your effort. The average return can cost on average between $189.00 and $275.00 and would be worth it if your taxes are complicated.
Hiring a tax professional will save you time and sometimes, money. If you were to file your own taxes and have a complicated return, you might be looking at one or two days of tax preparation. According to the IRS, on average, tax preparers spend 13 hours filling out their federal tax forms. If your return is simple and you can do it yourself with forms or software, the return could take as little as 5-8 hours, but the moment it becomes more complicated than this article stated previously, the return can shoot up to 15-22 hours.
Remember, taxes are due by April 15th and software prices typically go up after March 15th due to the higher demand. The conclusion is that you should outsource your tax preparation to a professional if you can’t dedicate a day or two to preparing your taxes and if there is anything complicated about your situation.
We hope you’ve found this article helpful!