To do your own taxes, you need to allocate at least a few hours for this task. It requires you to go over every detail because one mistake could lead to penalties and fines. So, if you have neither the time nor the patience to file your taxes, you’re better off hiring a pro like FreeTax USA. Of course it may seem expensive to pay for their expertise, but unless you actually know what you’re doing, paying a tax pro may be the more logical choice.
If you decide to go the DIY route, you’ll need to go through the IRS website or use a tax software. There’s no charge to file taxes if you choose the former. Simply print out the form from the IRS website and mail in your paperwork. If your income is $73,000 or less, the IRS will direct you to its free filing portal which has a list of qualified tax preparers offering free services.
On the other hand, if your income is higher than $73,000 and you are self-employed or have complex investments, you may need to use a professional tax preparer that charges a fee for their service.
Tax preparers are either tax lawyers, CPAs, or enrolled IRS agents. Their rates can vary depending on your state and the complexities of your tax/source of income. Companies like TurboTax offer full-service packages that will ensure you get a completed return in just a matter of days.
You can do your own taxes if:
- You have a lot of spare time
- You have a lot of patience
- Your tax situation is very straightforward
- You are comfortable navigating tax forms and figuring out tax related terms
According to the IRS the average American spends 7 hours to gather and fill out forms. Business owners on the other hand could spend up to 20 hours just doing their taxes.
You should hire a pro if:
- You don’t have the patience dealing with it.
- You are busy.
- You have better use for your time.
- You have a complicated tax situation.
- You want to itemize your tax deductions.
- You’ve had a major life event.
- Advantages of Hiring a Pro
Aside from what has already been mentioned earlier, hiring a pro offers other key advantages. You can include your tax preparation fees in your miscellaneous deductions if you choose to itemize as long as the sum is higher than 2% of your adjusted gross income.
Moreover, hiring a pro can definitely take off such a heavy burden on your shoulder. Filing a tax return is very complicated and the changes to the Federal tax code every year makes it almost impossible for the average tax payer to always be updated of the latest changes.
And believe it or not but you can actually save money when you hire a professional tax preparer because they can find all the deductions and credit relevant to your specific situation. And in the unlikely event that you get audited (only 1% get audited every year) they can help you with any necessary paperwork.