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Filing Tax Return as Self-prepared vs. Professional Preparer

March 27, 2017 by Ed Becker

Tax return filing deadline is creeping up pretty quickly! If you have not already made a decision of how you will file, it’s getting down to the wire now. Many tax professionals will be booked up by now, or have very few openings. If you have never used a tax professional, you should be choose wisely and not just hire someone randomly. The higher cost of a real professional, could be much less than having an issue with the IRS!

Choosing to self-prepare your tax return could save the fees of a professional, as well as, the time required to make and attend an appointment, possibly talk on the phone and sign your return if it is being mailed. To self-prepare you must invest a lot of time to have all your information and documents together, prepare them and make the time to appropriately file.

Pros & Cons of Self-Preparing

  • If you have a simple return, such as a 1040EZor 1040 short form, it is pretty easy to file your own return.
  • Flexibility of filing on your time schedule and not someone else’s. You can file your return at 2am in your pajamas if you choose.
  • Even if you have itemized deductions or more advanced tax situations, the tax software available for consumers and even small business owners, is very user friendly. The software will walk you through almost every possible scenario to ensure you get all the credits and deductions you should.
  • Time is definitely a factor. If you have never prepared your own return, you have complicated tax situations, or you are just not confident that you can DIY; it will probably cost you more in time than hiring a tax professional.
  • Self-preparing your tax return will teach you about your finances and ways that you can save money in the future. It will give you a precise overview of your financial year, and show you where you may have missed credits and deductions that you were not aware of.

Pros & Cons of Professional Preparation

  • Someone who knows the tax laws and changes, especially for complex tax situations.
  • Someone who will defend your tax situation to the IRS in case of questions or audits.
  • A professional that will not only prepare and file your return but give you financial/tax advice and suggestions to maximize your financial situation.
  • Reduces stress from your life and allows you to spend your time on other things that you are skilled at. The time you save, you could spend generating more income than your tax professional costs.
  • If you are a business owner and your business is growing, finding a tax professional now could save you time, money, and stress for many years.

Whether you choose to self-prepare or have your taxes prepared professionally, it is a very personal choice. Only you know your financial situation, your skills and your stressors. With the tax preparation software and IRS Free-File options, many more people are able to self-prepare simple returns. But more complex financial situations can still require hiring a professional, not only to prepare & file but to advise and support you.

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