“Taxes are so fun,” said no one ever. If you’ve ever looked at the instructions for filing your tax return or seen a tax law book, you know that figuring out your taxes yourself can be a daunting task. That’s why many of us use tax software or head to one of those pop-up tax shops to get our taxes done each spring.
I have relied on tax software for most of the years I’ve had to file a tax return and last year’s filing was no different. But toward the end of last year, I decided to have my taxes corrected by hiring a Certified Public Accountant (CPA). He found deductions that I could’ve taken as a freelance writer that I didn’t take when I filed using tax software. Since then, I’ve chosen to get my taxes done by only going to a CPA, despite its higher price tag. What are the pros and cons of choosing to use tax software or hiring a CPA? Does it really matter?
At-Home Tax Software
Tax software, like TurboTax or H&R Block, can be helpful for the determined DIY-er. The inexpensive software leads you through every step of the return, asks you questions and pre-populates the final form based on your answers, then does all the math and even electronically files the return for you! This is great when your taxes are straight-forward, such as if you only have one or two jobs that provide you with a W-2, and don’t have to factor in things like education, home ownership, a move to a different state or side income. If you don’t have any special circumstances, or have taken several classes in accounting and have some idea what you’re doing, then using tax software can be a great choice for a quick and easy tax filing.
A Pop-Up Shop
Going to a tax pop-up shop to get your taxes done might be risky. According to a 2015 study, tax preparers at places like Jackson Hewitt or H&R Block frequently make mistakes. Because, hey, tax law is confusing. The IRS provides tomes (not books, TOMES!) filled with all of the laws and exceptions. Not something that can be taught in a one-day course, which is all the tax preparers at the pop-up shops need to take to get qualified to work there.
Certified Public Accountant
If you’re a freelancer or otherwise self-employed, have dependents or other extenuating circumstances mentioned above, going to a CPA can make a big difference if you were to get audited by the IRS. Your CPA would be the go-between and could help you deal with the IRS, so that’s a good relationship to have. The more complicated your circumstances, the safer it would be for you to have your taxes prepared by a CPA. The caveat is that a CPA does cost more, but you’ll get the most for your money.
Sometimes, pop-up shops charge as much as what I paid my CPA, so to me it makes more sense to turn to the certified professional than to rely on someone who took one or two tax return classes. Like any of us, CPAs want and deserve to be paid well for doing their jobs well, right?
Finding What’s Right for You
So, how do you decide which tax prep method is right for you? If you have a complicated tax circumstance, such as you own property or have your own business or freelance on a regular basis, then choosing a CPA will ensure that you get the right tax deductions and file everything correctly. You’ll also have the added protection of having a CPA if the IRS were to audit your tax return. On the other hand, if your taxes are fairly simple and you’ve got some DIY prowess, tax software would be the most economical, as well as practical, for filing your tax return.
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