Should You Hire Someone to Do Your Taxes?

by · 2 comments

should i get an accountant
If you still haven’t thought much about taxes, now is a good time to start thinking about your tax returns. Tax season is coming up and you need to be ready to tackle the many new tax laws and how it applies to your situation.

Part of getting ready, though, includes deciding whether or not someone else needs to prepare your tax return. Here are some things to consider as you make your decision:

how to handle taxesHow Complex is Your Tax Return?

One of the biggest reasons to hire a pro is due to the complexity of your tax return. If all you have is a Form 1040, along with a couple of Schedules, it’s usually not a big deal just to do your own taxes. The IRS has fillable forms online, and it is possible for you to get relatively inexpensive tax preparation software. For a long time, I actually just filled out my tax return by hand, all on my own.

However, my tax return is increasing in complexity. My home business requires its own tax return, and we have investments to include. As a result, we have multiple returns, Forms and Schedules. It’s easier at this point to have the accountant to take care of it.

How Much Time Do You Have?

Honestly, I could probably do my own taxes. I am capable of completing the return on my own, and my mother used to work for H&R Block, so I could get help from her if I needed advice.

However, it can be incredibly time consuming to fill out all the forms, double check them, and make sure I am getting the best benefit. Tax preparation software could help, but I would need a rather fancy package to take care of all my state and federal tax preparation needs. Plus, I’m not sure that, even with the help of software, I have the expertise to take advantage of everything.

By the time I finally began seeing the accountant, I was spending upwards of five hours to prepare my tax return on my own, since I often had to look up instructions for different forms, and double check new tax laws.

Now, I just gather my documents (I keep receipts organized in a folder, and keep other documents organized throughout the year) and head to the accountant — who has the basic info from previous years. The whole process takes 45 minutes to an hour and a half (sometimes the accountant runs two or three different scenarios to see how to best reduce my tax liability, time I just don’t mind spending).

Bottom Line

Only you know how valuable your time is. By the time I buy the “premium” state and federal version of tax prep software, and then spend the time to prepare my return, I come out a loser, since I value my time fairly highly.

However, if you have the time and the expertise to prepare your own return — no matter how complex — it might be worth it. It doesn’t hurt to consider the alternative, though, and consider that it might be worth the money to pay someone else to take care of your return.

David’s Note: I also have an accountant prepare my taxes. Unlike Miranda, I feel like the upfront cost of paying for my accountant to file my taxes is much more expensive than using the online tax software. However, I a) value my sanity, and b) I can ask my accountant tax questions throughout the year and adjust how I invest in order to better take advantage of tax laws.

In the end, I probably end up saving money by going with an accountant. However, my tax returns are more complex than average and for many other people, doing taxes themselves is the way to go.

How do you handle taxes?

Money Saving Tip: An incredibly effective way to save more is to reduce your monthly Internet and TV costs. Click here for the current AT&T DSL and U-VERSE promotion codes and promos and see if you can save more money every month from now on.

{ read the comments below or add one }

  • Hadley Hodgson says:

    I started doing freelance work alongside my full-time employment last year, really considering getting a pro to help me out as I don’t want to do something wrong and numbers aren’t my strong point!

    For the sake of the headache it could save me, in my case it may be worth it.

  • DNN says:

    Not when you can visit your local library or community center and get it done for free. Some accountant are sheer crooks!

Leave a Comment