Doing Your Taxes Yourself vs. Hiring a Professional
Everybody wants to save money, and in our world today, that often means doing a job yourself rather than paying someone else to do it. Where filling out business and personal income tax returns is concerned, saving a little money is by far the most popular reason people have for doing it themselves. This isn’t necessarily the wisest move, but it could be. Let’s explore both sides.
Save money by doing your own taxes
If your primary interest is to save cash, you might choose to do your own taxes. It’s certainly not impossible for “average” people to accomplish this. There are plenty of resources to help you such as the IRS website, where you’ll find filing tips, news on changes to the tax code, downloadable forms and more.
Additionally, there are tax programs that essentially lead you by the hand in preparing your return. TurboTax is one of the more popular do-it-yourself tax programs, and many of its various versions retail for under $100.
To help you cover more of your bases, a number of books are available to guide you through particularly complex areas of tax return preparation. Most are written by tax/accounting professionals and contain information that’s up-to-date, at least as of the date the books were published.
Why people trust CPAs to do their taxes
We’ve just looked at the main reason people choose to compile their own tax returns: money-savings. Or a better term might be: perception of money-savings.
Unless your tax return is extremely simple, you’ll probably need to invest in a tax program of some kind. For more complex returns with multiple forms, many people will want to purchase a book that provides explanations of the many regulations they’ll be navigating.
These costs may not be as much as what you’d pay a professional accountant, but there’s more to consider than just the layout of cash.
While saving money is the main reason people do their own taxes, saving time and hassle is a big incentive for others, which makes turning tax return responsibilities over to a professional an easy choice. This is particularly true for small business owners, for whom time literally is money. Many simply can’t justify spending five or six – or more – hours doing their taxes when they could be out generating income instead.
And let’s face it – for the untrained, putting together a perfect tax return can be a major hassle. Learning how ever-changing tax codes and regulations apply to your unique circumstance can be quite a stressful process.
Finally there’s the accuracy factor. No matter what kind of program or book you have to guide you, the average person is still liable to make errors somewhere within his or her tax return. The IRS doesn’t like errors. Errors can be seen as the first red flags that lead to an audit.
In summary, for the most basic tax returns, doing it yourself might make good sense. But for the majority of others – especially when the return is for a business – it’s almost always safer, simpler and often less expensive in the long run to go with an experienced tax professional.
W. Cotton Mather, PC provides a full menu of tax-related services and consultation to both individuals and businesses. Call (412) 931-1617 with questions about your upcoming tax needs.