It’s that dreaded time of the year, tax time. Only a select few individuals actually like doing their taxes because of the potential headache it can be. The tax code is thousands of pages long, so how can it be easy to fully understand what to do? Thankfully, there are options that make it less of a nightmare for most of us to file our taxes.
There are numerous options when it comes to doing taxes. I still remember being in high school and filling out the 1040 EZ form. It was one page and involved basic math. I took my W-2 and wrote down the appropriate numbers. I was done in less than 30 minutes. You may not find yourself in this situation but it is still possible for a select few. You do need to print the forms off of the IRS website. These days the more popular ways to take care of taxes are through using tax preparation software such as
Turbo Tax or H & R Block or by paying someone such as a CPA or other tax preparation firms. The thing to keep in mind with the last option is the value you’re receiving as well as their knowledge level.
Don’t Be Afraid to File Your Own Tax Return
A 2010 study showed that 90% of Americans pay someone professionally or use tax preparation software to file their taxes. I know for some hiring a CPA is the best and wisest option available, but for many, that should not be a need. For many individuals that have basic W-2’s and a few 1099’s using tax, software should be more than enough to take care of your taxes. I used the H & R Block platform for many years and the system walks you through it very easily and has heard the same thing about Turbo Tax. If you’re able to input numbers into a software program, then oftentimes that is all that’s needed and you save yourself money in the process. One thing to keep in mind is that if you do go to a tax preparer like H & R Block or Liberty Tax many of the tax preparers there have simply gone through a class to teach them to use the software. You may find some good ones there, but they’re usually not experts and you can generally accomplish the same thing on your own.
When is it Time to Get Help With Your Taxes?
This is a question my wife and I had to ask ourselves last year. I had always prepared our own taxes and enjoyed working with the numbers, to be honest. However, our business took off two years ago, and with that numerous moving parts became a part of our tax picture, making it more complex. It was at this time that we spoke with some local friends and found and hired a CPA. I hate spending the money, but at the end of the day, he is an expert. We have numerous forms that have to be filled out which led to a nearly 30-page tax return last year and it just made sense to pay someone to do our taxes. In my opinion, when you find your taxes to be overwhelming or you’re at a point where you’re not confident doing them that is then the time to consider paying someone to do them. Just make sure that if you do pursue this route to make sure you hire someone reputable who has the requisite experience to handle your taxes.
What Do You Do?
Do you pay someone to do your taxes or do you prepare them yourself? Please share your thoughts in the comments.
Image by 401(k) 2013 / flicker
This post was originally published on March 20, 2013, and updated on January 25, 2022.