Jason Steele for Forbes/ Investopedia writes: With every important job comes the question of whether or not
individuals should do it themselves or hire a professional. While the
ever improving selection of tax preparation software certainly makes it
easier to do your own taxes, it has hardly put Certified Public Accountants (CPAs) and other personal tax preparers out of business.
The Advantages of Using Tax Software
Price
There is no way around the fact that you will pay less for a software package than you will to hire a CPA
or another qualified tax professional. The price of tax preparation
software ranges from the $10 to $120 range to websites that offer the
service for free. On the other hand, the least expensive tax preparers
will cost at least $100 and a CPA is likely to charge at least twice
that amount. The upfront savings of using tax software over an
accountant is one of the most attractive benefits of filing your own
taxes.
Speed
Once you have all the necessary documents in front
of you, it is possible to complete your own taxes in less than an hour.
In contrast, the best accountants will usually take from several days
to a few weeks to process your paperwork and file your forms.
Simplicity
Good tax preparation software walks you
through the process very quickly and easily. For those who have only a
few deductions, sources of income, or investments, there is little need
to sit down with an accountant to sort it all out.
The Benefits of Hiring a Professional Accountant
Better Software
According to Denver CPA Carl Wehner, accountants pay around $1,000 to
$6,000 for their software, which is far more sophisticated than the
products sold to consumers. These more advanced programs have the
ability to quickly scan your information and organize line items and
forms correctly. By automating much of the data entry and organization,
there’s less chance for human error to hurt your tax return.
Human Touch
Like a good family doctor that knows your
medical history, you can develop a relationship with an accountant so
that he or she understands your family’s financial situation and future
goals. According to Wehner, who has been preparing taxes for 45 years,
“A tax professional is often able to make valuable tax savings
suggestions that a software program just can’t anticipate.” The value of
this advice can easily exceed the additional cost of consulting with a
professional. For example, a tax accountant can provide you advice on tax-friendly ways to save for your children’s education, or how to reduce taxes on your capital gains.
Accountants Can Answer Your Questions Year Round
As a
trusted professional, a good accountant will be able to answer important
questions that arise not just during your annual consultation, but at
other times during the year.
A CPA Saves You Time When Handling Complicated Issues
Taxpayers who find themselves at the center of complicated business and
investment matters may even have the skill to sort through their taxes
on their own, but is it worth their time? A professional tax preparer is
so familiar with the system, he or she can quickly and easily
accomplish tasks that might take even skilled taxpayers hours of
research. For busy non-tax professionals, their time can generally be
better spent earning money in their area of expertise. Even if your tax
situation is straightforward, hiring a professional will save you the
time and stress of doing your taxes.
The Bottom Line
Ultimately, there is no
universally correct answer to the question of hiring a tax professional
or doing your taxes yourself with software. Your comfort and familiarity
with IRS
rules will be part of your decision, but the complexity of your finances
should be the key deciding factor. Those with a single employer and few
investments may save hundreds of dollars by preparing their own taxes,
while those with business income or rental properties will find the
expense of hiring an accountant to be worth their peace of mind and potential tax savings.
Saturday, February 8, 2014
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Nothing can be most irritating than having some problems over tax especially authorities are sending you reports and papers about your tax status. That is why most companies acquire some help with a tax return accountant to protect their business.
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