Tax time… Should I do it myself or should I hire a tax pro??

Well, here it is…  Everyone’s favorite time of year (if you work in the U.S. Department of Treasury).  Many people pay $$$ for a tax pro, such as a CPA or Enrolled Agent to file their taxes.  Well, studies show that the tax pros (non-CPAs) many not help you avoid errors on your tax return.  When you go to an enrolled agent, or a service like H & R Block, Jackson Hewlett, or Liberty Tax; these people do not always save you money or protect you from errors or omissions.  Regardless, YOU, the tax paper, are still 100% responsibility for whatever is on your return.  Whether it was prepared by you, your Uncle Bob, a rep. from a tax firm or a CPA; ultimately, you are still 100% responsible.

With that said, should you do it yourself or hire a pro?  Well, that depends.  If you have a plain vanilla return with just regular salaried income, some savings interest, 401k/403b, IRA and a some dividends.  Chances are you may be able to just use a desktop or web version of TurboTax, H & R Block or TaxAct.  They are all pretty much the same.  All you need to do is gather your W-2’s and 1099’s from all your investment/dividend income and a copy of your previous year’s tax return and you should be able to go through the interview and the software will fill out all the information for you in the correct fields.  I know for TurboTax, you just enter in a few numbers on the W-2 your employer gives you and it fills out the rest.  As for the investment, dividend and savings income.  If you use a major bank or investment firm, TurboTax can actually import that information for you as well.

Bottom line.  If you have a fairly simple every day regular return, you should be able to save a few bucks and do it yourself.  If you start early, you can always either A, turn it over to a tax pro to help you out with your return.  Or B, file an extension, and that would buy you some time in order to get your ducks in a row.

Most, if not all, of the big firms and CPA’s use the same software as you to fill out the forms and input the same information you are furnishing to them.  Just cut out the middle man and do it yourself.  You’ll learn something about your taxes and how the whole thing works.  In this day and age, there’s little reason to pay for an enrolled agent or CPA to complete a simple return.  If you run a business or have a complex return, then you may want to consider some professional help.  But, even then, most business owners should be able to handle that as well.  Most important thing I can recommend is to keep good and accurate records.  Also digitize them and store them offline in a secure location.  More on this in another post.

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