Preparing Taxes Yourself
Preparing taxes yourself has one huge advantage: You don’t need to hire an accountant. While it’s true that filing your taxes can in some cases be highly complicated, software and free fillable forms can make the job much easier.
Tax preparation software makes the process of filing your returns much simpler. The software will take you through the process of putting in your information and will ask questions to determine if you qualify for any deductions or tax credits.
The IRS has partnered with several major vendors in a program that allows you to file your taxes online for free if you make $60,000 or less in adjusted gross income. I don’t know about you, but I pretty much live by the philosophy that if it’s free it’s for me (and if it’s slices of cheesecake, I’ll take three).
Some of these resources are only available if you live in certain states – so make sure to do your research before you start working on your taxes. IRS.gov has lots of great information about Free File, as well as resources to help you find a free e-file program for filing your state return. If you make over $60,000, you may have to pay for the software, but it could be well worth it to save yourself some time and hassle. Several of these software developers offer specialized versions for small businesses or people with a lot of investment income that might be worth looking into as well.
If you make over $60,000, there’s still a way to file your taxes online for free: fillable forms.
While not as simple as the software, the fillable forms might work well for someone who has filed their taxes before and knows what deductions or credits might apply. The forms come with instructions and even autofill some of the basic calculations for you.
The downside to fillable forms is that you still may need to do some math. Looking through the IRS tax code for clarification on a point can also be like finding a needle in a haystack with provisions more ambiguous than the ending of “Lost.”
If you feel like you have a good handle on the complexity of your financial situation, fillable forms could still be a good option.
Another option is to hire someone to do your taxes. This could be preferable if you dislike dealing with numbers or if your financial situation is a little more complex.
An accountant or financial planner will know more about potential tax deductions than the average person. They’ll know exactly what information to get from you in order to help you get back as much money as possible. And a professional does taxes all the time, so there’s a significant reduction in the risk of mistakes.
This may even be easier if you regularly see a financial planner, because that person will be intimately familiar with your financial situation.
Do you file your own taxes, or do you hire someone to do them for you? Leave us a note in the comments section.
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