Why I’m Not Doing My Own Taxes This Year
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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?