Navigation

Why I’m Not Doing My Own Taxes This Year

Some of the links in this post are from our sponsors. Read our disclosure to see how we make money.

taxes

Ever since I started making money as a teenager, I have paid taxes. It’s part of the American way. You work, you earn, you pay taxes. What a dream!

While my dad used to prepare my taxes when I first started earning, I quickly took over my own taxes. With his help, I have been doing my own taxes for years. Well, his help and that of TurboTax. I’ve been a loyal TurboTax user for a number of years. They have always been easy to use and I never had issues. Unfortunately, they decided to be deceptive to business owners this year, so I won’t be going back to their software.

Before this year, I’ve been all about doing my own taxes. It’s really not hard, especially when you use a service such as TurboTax. They ask the questions and you answer them. It does get a little more difficult when you own a business, like I do, but it’s still manageable.

I’ve been an advocate for many to do their own taxes. Most filers can use TaxACT, H&R Block, eSmart Tax or TurboTax for very little money. If you only get a W-2 and you don’t make money on the side, then these programs can get it done for you in a matter of minutes.

When DIY Taxes Might Not Save Money

 

We all know accountants cost money. They are good at what they do (most anyway) and they charge accordingly. This is especially true for those who are really good with taxes. You pay a premium to use them. The more you need from them, the more you pay. It’s as simple as you get what you pay for. People wanted more choices than going down to their local tax accountant, so that’s where tax software was born – out of a growing need to do it yourself.

There are some cases when doing your own taxes could end up costing you more than paying for a CPA. In my own situation, we have bought and sold a house; I sold a bunch of company stock at the beginning of the year; I earned quite a bit extra on top of my normal job; and, we participated in a government program when we bought our first house that now requires tax documentation that I don’t know where to find.

There were enough special circumstances affecting us this year that I decided to skip the tax software even before I got wind of TurboTax’s unwilling change. This is the first year I have opted to go with a tax accountant who specializes in small businesses. While I’m sure I could take time to figure out how to address my special circumstances from a tax perspective, I don’t want to. I value my time much more than that. To me, time is money!

On top of the information, good business tax accountants can make sure you are getting all of the applicable deductions you can get. Understanding the tax laws is hard enough for most people, especially us regular taxpayers.

Add in the business aspect and it just gets murky. In the end, I realized I could be overlooking tax deductions I didn’t know about or didn’t think applied. This would cause me to pay more than I would without the accountant, including the fee. This seems worth it to me.

DIY or Pro?

 

The question you should ask yourself before every tax season is whether you should do your taxes yourself or hire a professional. If you did them successfully last year and nothing really changed, then why not try your hand again? If your situation changed considerably, like mine, then consider going with a professional. While you pay more upfront to get the service, they can typically make sure your taxes are done right and you get the most applicable deductions.

It’s nothing against tax software, but they only ask specific questions. Tax accountants can analyze your situation and come up with other questions. It’s the human factor that really makes the difference here. Depending on how my experience goes, I might not go back to tax software next year. I might just stick with the accountant. Remember, you can deduct the amount you paid on next year’s taxes!

 

So, what about you? Do you do your own taxes or do you hire a professional? If you use online tax software, which is your favorite? How long did it take you to prepare your taxes last year? 

The following two tabs change content below.
Grayson is the owner of Debt Roundup and Empowered Shopper. He also co-owns Sprout Wealth and Eyes on the Dollar. After going to battle and winning against consumer debt, he decided it was time to learn how to use credit wisely and grow his wealth. He discusses all things personal finance and is not afraid of being controversial. He also is a freelance writer and blog manager.

Latest posts by Grayson Bell (see all)

32 Comments

  • Mrs. Maroon says:

    For the last several years we have hired someone. It started because we had farm income (actually a loss when you factor in depreciation). When we found a mistake – that the accountant offered to fix at a price – we switched to paying a distant family member. After finding an error there too, we moved to yet another CPA now that we had added in two small side hustles. All of the extra incomes have been whittled away, so we are contemplating doing it ourselves this time around. At least we don’t pay for mistakes that way…

    • Elroy says:

      My exact experience. You gather all the documents, answer a bunch of questions and an accountant drops into your software. Then, you sign something saying you will look over the return and absolve them for any errors. You either trust your accountant, or you spend the same amount of time checking over their work. JMO, and I’m a DIY’er.

      • Grayson Bell says:

        This is something I’m skeptical of. What are they using to do the taxes? I’m really looking for more advice than anything.

  • Jon @ Money Smart Guides says:

    This is my 2nd year of hiring a pro to do our taxes. With our rental property, my work at home status and my wife have un-reimbursed expenses at work, it just makes sense to hire a pro. It may cost more upfront, but in the long run, I feel more confident going this route.

  • Holly@ClubThrifty says:

    We are doing our own taxes this year, but it might be the last. It just gets more complicated each year. We have two rental properties and two businesses now, with plenty of other stuff going on.

  • Money Beagle says:

    We are blessed that my dad’s best friend since childhood is a CPA and has always done our taxes for no charge. It’ll be a sad day when he retires!

  • Kathy says:

    My husband is a retired IRS agent so he does our taxes but even he has stated how difficult it is getting to be due to the complex tax law. He uses TurboTax and we didn’t have problems with the proper forms with the version we use. Since he loves a challenge, he will probably continue doing ours for quite a while.

  • Shannon @ Financially Blonde says:

    As a financial advisor, I actually see accountants miss more than they catch and it’s mostly because they don’t ask all the questions and clients don’t necessarily offer up as much as they should, mostly because they don’t know they should. I actually started doing taxes myself when I started my business because I wanted to make sure that I didn’t miss anything and with a program like TurboTax for Business I don’t feel like I do. I feel like the program is more up to speed on all of the regulations than your average accountant. It takes a lot of time, but I haven’t met an accountant yet that I truly trust to know that it’s worth it.

    • Grayson Bell says:

      This is something that frightens me. While I’m going with a CPA this year, I’m also going to be doing the taxes on my own as a test. I think it would be good to see.

  • Tonya@Budget and the Beach says:

    OMG easy answer! No way in hell I’m doing my own as a freelancer! lol! It takes me forever just to organize everything for my accountant (so I can at least keep the cost as low as possible in that area). I used to do my own though when life was simpler and had just one full time job.

  • Kim@Eyesonthedollar says:

    I’ve had an accountant for years, and it’s mostly because of the personal factor. He knows us and has offered many good ideas over the years to help keep money in our pockets. It does cost to hire someone, but it’s been well worth it in my opinion.

    • Grayson Bell says:

      I think it takes some time to get a relationship with a CPA that will actually pan out. It helps both to know each other.

  • Ben Luthi says:

    As odd as it sounds, I love doing my taxes. That being said, as soon as things start getting more complicated, I’ll have no problem switching to a CPA.

  • DC @ Young Adult Money says:

    I do my own taxes primarily because I assume that if I go to a professional they will simply type in the information I give them. TurboTax has worked really well for us the past year, so as long as we have all our documentation ready to go it only takes a few hours of typing stuff in. My parents buy TurboTax every year and you can file up to five returns on any single software license so we don’t even have to pay for the software.

  • Michelle says:

    We are doing our own taxes this year, and we always have. I am not sure if I will be doing it next year though as with the move and everything else, everything is more complicated now.

  • dojo says:

    We have an accountant doing it for us. She’s not expensive and yet very experienced and good in her job. Even if it costs us money, it’s something a professional does and she does it well. I’m really not good with numbers, so I can only imagine the disaster 😀

  • Jason B says:

    For the last few years I’ve had someone do my taxes for free. I’m pretty sure I will get them to do them again since I had a lot of side income in 2014.

  • Mark@BareBudgetGuy says:

    I say go pro! But I’m biased.

  • Adam @ AdamChudy.com says:

    I’m a DIY’er but I have an accounting degree. It’s certainly not for everybody.

Leave a Reply

Your email address will not be published. Required fields are marked *