Doing your own taxes seems to get harder every year. It seems like there’s little reason to try to struggle through the process when inexpensive tax preparation services pop up like mushrooms this time of year and there’s even free software available online.
The Tax Code is Tough, Not Impossible
I’ve done my own taxes on occasion. These days, though, I don’t dare to try to go through the whole process without an accountant handling the tough parts. I simply don’t have enough time to spend on learning the details of every bit of tax preparation — although my situation is a little more complex than other folks’ might be. I have a company of my own, with income coming from several different sources. Let’s just say that I was very happy to be able to hand over the headache of preparing my taxes to someone else.
Even though my accountant does the hard work, I still study the tax code, though. Most of the material on the IRS website is written so that you don’t need an accounting degree to puzzle through it. I sit down regularly with my accountant to discuss changes to the tax code and how they’ll impact my tax return. I probably still could make it through most of my tax return correctly if I absolutely had to.
Honestly, most taxpayers don’t have as complex a tax situation as I do. Provided that you work for an employer who withholds payroll taxes from your check each week, doing your own taxes can just be a matter of checking if you qualify for tax credits, such as those that go along with paying college tuition. There’s a reason that there’s software available to do taxes these days — for the average taxpayer, a piece of software can walk you through the process fairly quickly.
Taxes Are Your Responsibility
If something goes wrong with my tax return, it’s not a big deal for the tax preparer. There are some cases of continuing hanky-panky where an accountant got busted — but for most tax issues, it’s the taxpayer who will wind up talking to the IRS. While that’s not necessarily an argument for sitting down and doing your own taxes every year, it’s a very good argument for being able to at least understand the basics of your own tax situation.
It’s not a particularly simple situation — trying to read up on some of the more obscure tax deductions can lead directly to a migraine — but it is something that is important if you want truly secure personal finances. Going through and doing your own taxes once or twice (and I don’t mean plugging some numbers into software) is the best way to really get a handle on what goes into a tax return. You can, of course, read up on credits, deductions and rules that affect you, but that isn’t quite the same.
Personally, I believe that doing your own taxes at least once can be an incredibly educational process — even if it is a difficult proposition. After all, if you haven’t prepared a tax return, it’s tough to ask the right questions to make sure your tax return is completed properly. That means a mistake can creep through, costing you money (and interest if it isn’t caught soon enough). There’s even jail time at stake with big enough problems — think about all of the celebrities who have had to go to court, despite claims that their accountants were supposed to have taken care of everything. No one wants to wind up in that situation.
So, Should You Do Your Taxes?
At the end of the day, there’s no real requirement to do your own taxes — provided you are comfortable reading through your final tax return and understanding what you see. It’s hard to argue that most people should be as up to date on the tax code as a professional tax preparer or accountant. But, given that you are ultimately responsible for your own taxes, you do have to be sure that who ever does your taxes gets it right.
Staying informed about your taxes has another benefit, as well. The more you know, the more that you can take advantage of deductions and credits to bring down the amount you’re actually paying to the government every year. If you don’t stay informed, though, you simply won’t have the knowledge necessary to take advantage of such opportunities.