We bought our copy of TurboTax this past weekend so we could do our federal tax return. We’ve been using TurboTax for years for doing our taxes so it is second nature to us. We like to get our taxes done as early as possible. We usually have a refund but even in the years where we’ve owed money, we’ve found that getting our taxes done and filed just felt like a huge weight off our shoulders.
Mr. NMOM (Mr. Not Made of Money) is the “tax guy” in our household. He is really good at record keeping and keeps our paperwork in tip-top shape. Basically at the beginning of every year he starts a new folder for that year’s tax information. Any receipts for charitable donations, W-4, 1099′s, etc. are placed into that folder so they will be ready to go when tax time rolls around.
So why do we use TurboTax? First, we’ve been using it for so long so we really know the program. Secondly, it imports all our old information so we are not continually entering in the same stuff. Thirdly, we trust the program.
Here are some questions to ask yourself when considering the option of doing your taxes yourself or hiring a professional:
Do you feel comfortable with each aspect of your return?
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.
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I would only consult a professional if I could do so for free. Or, unless my tax situation gets so complex that I can no longer do it myself.
Yes, I struggled a litle with the self-employment stuff, but I think I’ll be OK. For any tough questions, find an accountant in your circle of contacts who can answer a specific set of questions you might have for free.