4 Questions to Ask Before Filing Your Own Taxes
If you are like me, it’s often hard to determine whether to hire a CPA to do my taxes for me or to do them myself using an online service. A great article I found on Investopedia.com provides guidelines to help with that choice.
There’s no single answer for every taxpayer. Choose the tax preparation method that suits your situation. Here are some of the factors to consider in making your choice.
1. First, determine the complexity of your tax situation. As a general rule, the more complex your tax situation, the more compelling it is for you to bring in a tax professional.
If you own a business, including a sideline business, had a major life event this year, or had extensive securities transactions, you will want to itemize.
2. Second, determine your tax proficiency. For some people, the very idea of numbers, taxes, and the process of preparing and filing a return seems daunting. For others, taxes have become a routine chore that needs to be done each year. You don’t have to be a tax expert to use an online preparation software because you’ll be prompted to supply needed information to complete your return.
3. Third, check your schedule. Time is always an important factor in deciding whether to do your return yourself or hire a preparer. Either way, you’ll spend the same amount of time gathering the documentation needed to prepare the return.
4. Finally, cost. According to the National Society of Accountants, the average fee charged this year for a return that does not include itemized deductions is $159, or $273 for a return with itemized deductions. You can do your own return for little or nothing, If your adjusted gross income is less than $62,000, you can use FreeFile,which is the IRS’s free service to prepare your return online and submit it electronically at no cost.