When it comes to doing your taxes, there are really only two options: preparing them alone, or hiring a professional. There are many positive aspects to hiring a tax professional including less stress, saving money on your taxes, confidence, and less risk of an audit.
Despite all the positive aspects, the only downside is that, yes, it does cost a bit more than doing them yourself. Therefore, you must decide whether or not hiring a tax prepares is right for you. Do you want to hire a tax professional? Or, do you want to complete the daunting task of tax preparation on your own?
You Might Want to do your Own Taxes If…
You have many hours to devote to completing your taxes, then you can opt to do them yourself. For the average person, the IRS estimates taxes will take up to seven hours. This includes the processes of gathering forms and preparing the tax return.
The “average person” is categorized as someone who works for a company, makes less than $69,000 annually, does not have a side-hustle of any kind, and is not looking for an exceptional tax return.
If you are a business owner then you are not considered the “average person” and instead, you can expect to spend at least 20 hours on your taxes.
You can consider yourself to have a “non-complicated” tax situation if you have no dependents, are single or married, (but not divorced, hold no investments besides a retirement account, and hold no significant assets.
You also should not have donated anything substantial to a charitable contribution that you are looking to claim. If this sounds like you, then you most likely will have a simple tax preparing session, and might not need to hire a tax preparer.
For anyone who owns a business, is self-employed or has a side-hustle, it is important to truly understand the responsibility of preparing your own taxes. Business-related tax forms can be very complicated, and business income adds a whole new layer of preparing and filing a tax return.
If you do decide to prepare your own taxes, then you will definitely need to find software that fits your needs, but you are opening yourself up to a higher chance of an audit. Additionally, although you might not be audited, you might lose out on possible business deductions that a tax professional may have found.
You should Hire a Tax Preparer If . . .
You are busy and you do not want to spend countless hours stressing over your taxes. If you feel that you have better things to do than prepare your own taxes, then you should outsource for help.
Especially if you are someone with anxiety, then it is not worth losing sleep over your taxes. Why stress over a possible audit, when you could leave it to the professionals?
Typically, those who make over $200,000, business owners, busy individuals, and anyone who does not feel confident doing their own taxes, should hire a tax preparer.
For those who have a “complicated tax situation” with dependents, investments, or significant assets, it is better to leave your taxes to the professionals at Denver Tax Advisors for Tax Preparation in Denver.