It is tax season yet again and time to decide whether or not you want to prepare your own, or pay a professional to do it for you. I think there are several factors you should think about before deciding this in haste. It really depends on your personal circumstances whether or not you would benefit from using a tax preparer. Let’s look at a few of the issues that you should consider before deciding.
How confident and competent are you to prepare your own taxes?
First, if you do not feel comfortable using a computer, you probably won’t feel confident enough to use a tax software online to prepare your own. Though many tax software programs are available to purchase online, and in stores, there are some senior citizens and other small genres of people who are simply not knowledgeable about using the computer. That is perfectly okay! If you fall into this category, you should definitely seek help from a tax preparer. Most communities have help available for retirees and low income people at little or no cost. Watch the local news, read the newspaper, or even contact your church or library to see if they are offering assistance.
Is your tax return easy?
In general, your taxes are considered easy if you have income from only one or two employers, a 1099 showing some interest you’ve earned, and only a few deductions such as mortgage interest, real estate property tax, vehicle property tax, and charitable contributions. Most, if not all of the tax software available today is more than adequate to lead and guide you in preparing and filing your taxes in these circumstances. I have used H&R Block (formerly named Tax Cut) software to prepare my taxes for several years, and have been very satisfied with it. I can also recommend TurboTax, because I have used it. So if you know how to use the computer, you can save money by preparing and filing your own taxes online.
Is your tax return complicated?
There are several circumstances where it may be more beneficial to pay a tax preparer. What are some of them? First, have you had any significant life changes during 2010? Such examples would be if you married, divorced, had a child, or the death of a family member. All tax software can handle these situations, and will ask you simple questions to help you not to miss a tax credit or deduction you are eligible for based on these life changes.
Other more complicated matters include the sale or foreclosure of your home in 2010, whether you own your own business and qualify for certain deductions, have purchased items in which you can receive a home energy credit, are a first time home buyer, or have multiple investments including buying and selling of stocks and bonds. All of these situations have more important tax implications.
With any of these more complicated tax matters, the bottom line of whether or not to prepare your own taxes or seek assistance from a tax professional really boils down to how comfortable and confident are you to perform this task? If you find it hard to organize your tax papers throughout the year, find yourself procrastinating, or just plain get a headache or feeling of dread every time you think about taxes, then it is best not to try to tackle this task by yourself.
If you think about doing your taxes as a challenge, then go for it. When you go online and use a tax software program, you usually don’t have to pay until you get to the point of filing, so you can always attempt it and if you get too stressed out and find the task increasingly daunting, you can just stop online, and take your taxes to a tax preparer. Shop around and get prices from two or three agencies in order to get the lowest price. I hope this article provided you with some food for thought about what you are going to do this year.