Should you pay someone to do your taxes, or should you do them yourself?
This is the age-old question that we all must ask ourselves come tax time, and as the dreaded April 15th inches closer and closer by the day, it’s one that is on a lot of minds at the moment.
There are plenty of great tax professionals and accounting firms out there who are ready and waiting to help you file this year, but the question as to whether or not you should take the time to do them yourself or pay someone to do them for you is a very personal one.
The truth is that, whether the cost of hiring a CPA is worth it or not, largely depends on your individual situation. In some situations, it totally makes sense to do your taxes on your own, but there are many situations when hiring a professional is the way to go.
5 Reasons to Hire a Tax Pro
Reason #1. Your situation is a bit more complicated.
When the only things that you really need to take into account while filing your taxes are your W2 and proof of health insurance, the process is pretty simple. However, things get more complicated with every itemized deduction you decide to take out.
Here are a few things that can complicate the process of doing your taxes:
- You own a business or you’re self-employed.
- You utilize a state or federal exchange for your health insurance.
- Your income taxes were filed too late.
- You own a home.
- You have children.
- You’re taking out itemized deductions.
If one or more of the above situations apply to you, then it might be in your best interest to simply hire someone to do your taxes for you. That’s because, the more complicated your taxes are, the more likely you are to miss something or make a costly mistake.
Reason #2. You want to avoid making a costly mistake.
The fact of the matter is that filing taxes in the United States can be complicated, and that’s true regardless of how simple or straightforward your situation may be. To make matters worse, changes and updates to the tax policy happen all the time. Although some of these changes are meant to make things easier, they often lead to mass confusion.
But, even without the complications and the changes, there’s always a chance that you could make a mistake while doing your own taxes, and that’s true even with the simplest returns.
Here are a few of the most common mistakes people make when doing their own taxes:
- Missing or inaccurate information.
- Mathematical errors.
- Incorrect account numbers.
- Filing the incorrect forms.
- Filing taxes under the wrong status.
- Forgetting to sign.
- Failing to include applicable deductions or credits.
Mistakes can be costly, and working with the right tax professional can help you avoid them.
Reason #3. You don’t want to waste your time.
Filing tax returns that are a bit more complicated makes it much more likely that you’ll end up making a mistake, and it also makes it more likely that you’ll end up wasting your time and energy on something a professional could have handled much more quickly.
Did you know that the average time it takes to complete a typical return with deductions is almost 20 hours? That’s right, your average tax return with deductions will take almost a full day of your time, and even then, there’s no guarantee that you’ll get it right.
Your time has value. And, when it’s not spent doing things you have to do, like working, running errands, getting your kids to soccer practice, etc., you deserve to spend it doing what makes you happy. For most people, that’s not doing their taxes.
Reason #4. You want the best possible outcome for your money.
Cost is certainly something you’ll want to consider when deciding whether or not to work with an accounting firm to file your taxes this year. Obviously, CPAs don’t work for free, and hiring someone to do your taxes will mean paying them. However, it’s often an essential step toward getting the best possible outcome, and it can often end up saving you money in the end.
As I mentioned, tax policy can be a complicated thing, and something as simple as a misplaced decimal point, or a missed credit or deduction, could mean the difference between owing money and getting a refund.
This also goes back to the idea that your time is worth something. Twenty hours is a lot of time to spend working on your taxes, and the value of your time should absolutely be weighed when determining the cost-benefit analysis of hiring an accounting firm.
Oftentimes, working with a CPA or an accounting firm is the best option for many people in terms of cost. A tax professional can help you save time, avoid mistakes, and get the most value out of your return.
Reason #5. You want advice for planning ahead for next year.
It’s never too early to start thinking about filing taxes next year, and if you owed more or didn’t get as big of a refund as you were hoping for, there might be things you can tweak or change to make it happen next year.
If your situation will be changing in the next year — for instance, if you’re buying a house, making new investments, switching jobs, having a child, or getting married — hiring a professional could help you plan ahead accordingly.
The last thing that you want is to end up at this time next year with the knowledge that you could have avoided owing thousands of dollars by simply adjusting your deductions.
Find an accounting firm near you with Top Rated Local®!
There are lots of situations where hiring an accounting firm is the best way forward, and if you’re ready to find the right firm to work with this year, start your search with Top Rated Local! With Top Rated Local, you can read an accounting firm’s reviews from across the web from one place. Find the right accounting firm near you today!