Not Made Of Money

At this time of year, I hear people asking the same question over and over again. Everyone wonders if they should do their own taxes or if they should hire a professional tax preparer. Both methods of tax preparation have their benefits. However, no one wants to waste the money on a professional if they don’t have to.

While I can’t tell you exactly what to do, I can tell you what factors we look at as we make this decision each year. Hopefully, having the factors disclosed in black and white will allow you to examine your own situation and make a decision that works for you and your family.

Do you feel comfortable with each of the aspects of your return? If there is some portion of my tax return that I feel uncertain about, then I definitely consult a professional. For instance, if you recently became self-employed, you might be a bit shaky at filling out the Schedule C that is required. You get into a ton of questions about deductions for a home office, mileage expenses, and supplies. If you need help discovering what your true business expenses are, then it might be a good idea to consult a professional. Next year you might feel confident about filling out the form on your own.

Have there been any big changes in your life? Did you get married this year or have a baby? Maybe you bought your first home and think you may be eligible for the first-time homebuyers credit. New situations can call for a lot of changes in your taxes. You don’t want to miss any breaks you might qualify for. A professional can help you make sure that you don’t pay any more taxes than you have to pay.

Will you e-file? If you want to file electronically, you have a couple of options. You can use an internet service like TurboTax to file your return or you can use a professional and have them file it. You may decide that if you’re going to go to all of the expense of paying for TurboTax that you might go ahead and hire a professional. Alternatively, if you aren’t in a hurry to get your refund and like paperwork, you can file on paper forms for free.

You may be wondering, after all of this discussion, what we do in our household. Truthfully, we use TurboTax – it costs around $50 and we file our federal returns electronically. In addition, I never have to worry that a silly math error has fouled up our return (one of my biggest worries). Finally, TurboTax remembers our information next year. Then, if there are any big variances between the returns, I can make sure that it is an intentional variation.

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