They say there are two things you can’t escape: death and taxes. After the holiday season you start receiving tax forms in the mail, and you might think about how to file your taxes. Should you hire a tax professional to do it for you, or decide on filing your own taxes for free?
While some of us love DIY projects, others may shy away, especially when you really don’t want to mess up.
If your financial situation changes often, you need to decide whether to file your own taxes or pay a professional to. This is an especially important question if money is tight and you have to be careful with every purchase. Let’s look at why you might want to do your own taxes or have a professional to do it, and the overall benefits and drawbacks of each approach.
When to DIY Your Tax Filings
There are two ways you can go about filing your own taxes. The first way to do it yourself is by filling out the forms yourself. You can do that either with pen and paper or on the IRS’s website. Many people who decide to do their own taxes choose a tax preparation software like TurboTax or H&R Block.
These companies sometimes offer free tax filings or have low filing fees, and filing through a company makes it simpler. The software does most of the work, and they often offer advice, explanations, and support as you file your own taxes.
Why might you choose to file your own taxes? Here are the top reasons:
Free Tax Filings
The cost of hiring a professional is a major concern. Filing your own taxes yourself means you can file for taxes for free, or for a low cost. Hiring a professional will likely cost $100 at least, and sometimes double that depending on where you live. Sometimes the money you can save makes it easy to decide how to file your own taxes.
Patience and Time
If you aren’t afraid of navigating government forms, the DIY route may be the best way to go. Free tax filings are a great option if you know what you’re doing or you’re willing to learn. You’ll need to gather documents, figure out which forms to fill out, and enter in the information.
Sometimes this process can take up to 10 or more hours, but there’s something to be said for self-sufficiency.
Even with help from a software service, filing your own taxes can be complicated and take time. This is especially true if you have a complicated financial situation, with multiple investments, sources of income, itemized deductions, significant charitable contributions, and property. Gathering your necessary tax documents can take several hours, as can filing them.
If you have simple finances, feel comfortable with tax documents, have several hours, and want to save money, then filing your own taxes for free is worth it.
When to File With a Professional
Does the DIY route of filing your taxes sound a little overwhelming? For many people, the benefits of filing with a professional make the price worth every penny.
The biggest benefit of a professional is avoiding mistakes, making sure you fill out the correct forms and all the information entered exactly. If you make a mistake in your filing, your return may be delayed, or you may even face penalties from the IRS.
Professionals also have extensive knowledge of tax codes. These changed in 2018 and may change again in the future, so having an expert on hand is really helpful. They can also help you get more of a tax return with potential deductions you might otherwise miss.
Filing your own taxes for free requires focus and time. If time is more of a sacrifice than money, paying someone to file your taxes may be worth it.
Another reason to hire a professional is if you have a more complicated financial situation. For example, if you’re a business owner, taxes get much more complicated. It helps to have a professional to walk you through the process and make sure you tick all the boxes. A professional can also help you itemize deductions for costs related to your self-employment, business, or freelancing.
If you decide to hire a professional, look for a tax lawyer, CPA, or enrolled IRS agent. You can find a credentialed tax preparer near you at taxprepareregistry.com.
Deciding whether to file for taxes for free by yourself or go to a professional often comes down to concerns about costs. Ideally, you should make this choice based on your individual needs.
If you need help covering expenses and bills, try applying for a personal loan. Lift Credit can help ease your financial burden, freeing you up to pay your bills and make the decision about filing taxes that’s right for you and your family. Apply today for a personal loan to get the cash you need.