Tax Software vs. Accountant or Tax Pro: Should I Do My Own Taxes? (2024)

One of the most common questions I’m frequently asked is, “should I do my own taxes this year?”

It’s a new tax season and many of you all will be receiving your W-2s soon. The next step is to choose how you want to file your taxes this year.

Should you use a tax software or hire a tax pro?

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Why should I pay for the services of a Tax Professional or Accountant?

Let’s say you need some quick legal advice and decide to use a web service like Legal.com. Most of the advice from their website would be free because it is general information.

Now if you need expert legal specific to your personal needs, you would hire an attorney who would give you professional legal advice and cost for his or her professional expertise.

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Or let’s say, you were looking for free general medical advice from a site like WebMD.com.

The information provided would be general information not specific to your individual needs.

If you needed specific attention, you’d need to go to a professional like a physician or a specialist to get to the root cause of your problem.

Both examples show how complex situations require expert advice and guidance. These examples are why you should thing about hiring a tax advisor.

File with Ease from Home Today!

Tax Filing Software

Online tax software can be simplistic and doesn’t always apply to your individual needs that may change from year to year.

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Don’t get me wrong, online tax software can be an excellent choice for a SIMPLE tax return, but not necessarily the best choice for a more detailed tax return.

Think of yourself as a business, and as a business you make income and incur expenses.

Don’t let the file for free advertisem*nts fool you.

Filing for free usually mean that you have a basic tax return with minimal or no deductions.

You’ll notice that with online software your fees increase as your deductions increase.

Also, the confusing question increase to a point where you start questioning yourself and the legitimacy of your return.

Save time on tax prep your free tax preparation checklist here!

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Click HERE for the complete tax preparation check list needed for filing your taxes.

Common concerns you may have before hiring Tax Advisor or Accountant:

  • I don’t like sharing my financial info with anyone
  • It’s hard for me to trust anyone
  • I like being in control of my taxes
  • An accountant may not keep my information private

A great accountant or tax professional will help alleviate all of those fears you may have.

If you still are not sure if your situation calls for a tax pro, then review a few common life events below.

8 Reasons You Why You Should Hire an Accountant or Tax Advisor Instead of Doing Your Own Taxes

  1. Own a small business
  2. Have rental property
  3. Want to start estate planning
  4. You are subject to the alternative minimum tax (AMT)
  5. Experienced a big life change (new baby, married, divorce, retiring, etc.)
  6. You don’t know if you should accelerate or postpone your income
  7. You have employee stock options
  8. Need to make quarterly tax payments
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Why does a Tax Professional cost more than using a Tax Software to do your own taxes?

Most of us have important deductions and credits that we earned throughout the year. The salary you make is not money you keep. We incur expenses on a day by day bases.

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Keep in mind that there’s a lot of gray area when it comes to IRS law.

There are lots of deductions and credits that you may or may not qualify for as the qualification criteria changes year to year that a tax pro can help you with.


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A tax advisor or CPA (Certified Public Accountant) are experts in their field and will know how to deal with your specific situation, ensuring that you come out on the best end for your financial situation related to taxes.

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It cost on average $350 to have a more detailed tax return prepared by and accountant or tax professional.

Compare that to the $75 (average) spent on an online software such as Jackson Hewitt.

What does the extra $275+ give you with a Tax Advisor or Accountant?

Filing with a qualified accountant or tax advisor will give you peace of mind knowing that you’ve receive all the deductions and credits you qualify for.

You’ll also be updated on new tax laws that may affect your financial situation.

So, why put yourself through the trouble of spending hours of answering confusion tax questions from an online tax software?

Remember: Keep track of your expenses and income on a spreadsheet or bookkeepingprogram such as FreshBooks.

These are some questions you can avoid asking yourself later by hiring a tax professional:

  • Did I give all my hard earn money to the government?
  • Should I have claimed this credit or deduction?
  • Will I have to pay it back if I get audited?
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Key Questions to Ask When Looking for a Tax Advisor:

  1. Do they provide clients with an honest, secure, educational, and efficient tax preparation experience?
  2. Are they a respectable tax service?
  3. Is the company accessible, accurate, affordable, convenient, efficient,fast, knowledgeable, reliable?
  4. Is the Accountant or tax advisor easy to get a hold of
  5. Are the tax advisors competent with tax advice, fast and accurate?
  6. Do they provide you tools for making informed financial decisions?
  7. Will they ensure that the information received and transmitted is secure at all times?

So, should I do my own taxes?

It doesn’t take a genius to do your tax return, but in some circ*mstances it does take a qualified tax professional.

After all, you don’t miss out on your hard earned deductions.

I hope this article helped you gain some control of your tax plan this year. Remember not to stress out. Don’t forget to check outTax Formspage for any additional online tax checklists and forms you may need this year.

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If you enjoyed this article, then you’ll love these:

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Until the next money adventure, take care!

Handy

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Disclaimer Statement:All data and information provided on this site is for informational purposes only.The Handy Tax Guy makes no absolute representation of the correctness, mistakes, omissions, delays, appropriateness, or legitimacy of any information on this site.**Note: Each client circ*mstance will vary on a case-by-case basis**

(Original Article Date: January 21, 2019/Updated March 7, 2021)

Tax Software vs. Accountant or Tax Pro: Should I Do My Own Taxes? (2024)

FAQs

Is it better to do your taxes yourself or by a professional? ›

The Bottom Line. Individuals with a single employer and few investments may save money by preparing their taxes. Those with business income or rental properties will find hiring an accountant worth their peace of mind and potential tax savings.

Is it better to have an accountant do your taxes or TurboTax? ›

Lack of In-depth Tax Planning: While TurboTax can assist in preparing tax returns for the current year, it may not provide comprehensive tax planning advice for the future. A CPA can offer strategic insights to optimize tax planning and maximize tax savings in the long run.

Is it worth it to do your own taxes? ›

Not only is the process usually more efficient than commuting to your tax professional's office, it's often less expensive as well. Depending on the details of your return, you may even be able to file it for free.

What are two disadvantages of using tax software to file a tax return? ›

Are there negatives to using tax software? They usually have income limits that may prevent you from being able to file for free. And you have to be careful because they may charge you to file for your state return.

What are the cons of professional tax preparers? ›

The Disadvantages of Professional Tax Preparation

While professional tax preparation can offer convenience and expertise, it can also come with potential drawbacks such as high fees and the possibility of errors or omissions made by the tax preparer.

Why would someone use a tax professional rather than do their taxes on their own? ›

A tax professional can look at your past returns to see if any deductions were missed and, if so, amend them for you. You can reduce your risk of an audit. And, if you are audited or the IRS starts asking questions you can't easily answer, a professional tax preparer knows how to deal with the IRS.

Is a CPA worth it for taxes? ›

Most people only think of hiring a CPA when they prepare their tax return. While CPAs can provide valuable tax advice on how to prepare your return, they can also provide year-round tax and financial advice. This can save you significant amounts of money come tax time and help you navigate your financial world.

Do most people file their own taxes? ›

75% of Americans Plan To File Their Own Taxes — Why This Is a Good Money Move. A recent GOBankingRates study revealed that roughly three-quarters of Americans plan to file their taxes on their own this year, either using do-it-yourself tax software or completely by themselves with no assistance.

What is the best tax filing software? ›

TaxSlayer Self-Employed
CompanyForbes Advisor RatingLearn more CTA below text
H&R Block4.9Read Our Full Review
Jackson Hewitt Online5.0Read Our Full Review
TurboTax Deluxe4.8On Intuit's Website
TaxSlayer Self-Employed4.0On TaxSlayer's Website
2 more rows
Jul 29, 2024

When should you not do your own taxes? ›

Anytime your taxes are complicated. Hiring a pro is a prudent choice after a major life change like getting married or divorced, having a baby, buying or selling a home or business, experiencing a major health issue, or retiring.

What is the downside of TurboTax? ›

TurboTax cons

Costs may be higher compared to other tax software options, most notably for the versions that cover specialty tax needs such as rental properties or self-employment. Some users may find that the level of automation leads to less direct interaction with a tax professional.

Is paid TurboTax worth it? ›

TurboTax is generally pricier than everything else out there. Confident filers may not need all the bells and whistles that most TurboTax online products offer, but some people may find the streamlined program and the availability of human help worth the extra cost.

Is it worth paying someone to do your taxes? ›

When does it make sense to hire a tax pro? Anytime your taxes are complicated. Hiring a pro is a prudent choice after a major life change like getting married or divorced, having a baby, buying or selling a home or business, experiencing a major health issue, or retiring.

What is an advantage of hiring a professional to file your taxes? ›

Helps You Avoid an Audit

Since a tax pro is less likely to make mistakes on a return and is more likely to know which deductions and credits you're eligible for, hiring someone to prepare and file your tax return can make you less likely to be audited.

Is it better to file taxes independently? ›

More Room for Tax Breaks: Filing together usually means you can earn more and still qualify for certain tax breaks, like IRA contributions and education credits. Watch Out for Higher Rates: If you file separately, you might pay higher taxes than if you teamed up on a joint return.

What is the difference between a tax preparer and a tax professional? ›

While CPAs and enrolled agents are both tax professionals, the title “tax preparer” is a broad term encompassing any person paid to prepare tax returns.

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