Mark Steber for HuffPo/ Jackson Hewitt writes: As I mentioned, it could be a very complicated season - late law
changes, the Affordable Care Act rules, and much reduced IRS resources.
It's the perfect storm for potential taxpayer confusion, problems
filing tax returns, and delayed refunds. Whether you need IRS help or
not, filing electronically and as early as possible is one of your best
defenses against delays. Of course, in any tax year with issues,
changes, and new rules it could be best to let someone else prepare your
tax return. So how do you know if you should do your own return or
hire a tax pro?
Step one, either way, is organizing all your
documents- you know the ones in your mailbox that have, "IMPORTANT TAX
DOCUMENT" stamped on them. Take those and your canceled checks,
receipts, and last year's tax return and do a quick review of your tax
situation. These documents can help you determine if you have a simple
return, which you might choose to complete yourself, or if you have a
more complex return that might be best prepared by a trusted tax pro.
Let's
look at the do-it-yourself (DIY) approach first. If you have a couple
W-2s and some 1099's, you can probably do your own return; you might
miss something like a tax credit or deduction, but the odds are you will
get it mostly correct. Most of the DIY tax preparation software is
user friendly, walking you through the forms in a question and answer
format, or allowing you to enter data directly from the forms you
received. DIY is convenient; you work at your own pace, grabbing an
hour here and there. Another advantage of DIY is the cost savings.
Generally, if your income is less than $60,000, you can file for free
right from the IRS website: Free File: Do Your Federal Taxes for Free.
Certainly, there are good software products and some even reasonably
priced. However, do not be fooled - YOU will be doing the work, taking
the risks, and relying mostly on YOUR tax knowledge; AND, if IRS has
questions, you are on your own. America is founded by risk-takers and
adventurers, but is your tax return where you want to take risks or be
adventurous?
A tax pro is a good idea if you; had significant
life changes (think marriage, babies, and moves), own rental properties,
are self-employed, have many deductions, or you have questions about
the impact of the new healthcare laws. Another reason to seek a tax pro
- you have better things to do. Taxes take time and they are complex,
the average taxpayer spent more than 23 hours to prepare and file a Form
1040 last year and Accounting Today reported that average tax
preparation fees were $246. Being a numbers guy, that averages to less
than $10.70 an hour. A tax pro ensures you get every deduction or
credit you are eligible for, even the complicated or lesser-known ones,
so that you get every penny that is yours. Combine the low price with
not worrying about reading form instructions, forgetting a deduction,
missing a credit, or worst-case scenario, making a mistake and that
money is well spent. Not to mention that if you were to be audited, you
would have professional help.
For many hard-working Americans,
preparing their tax return is the largest financial transaction of the
year. Whether you prepare your return or you have it professionally
done, make sure your tax return gets all the attention it needs to be
done right. After all, it is YOUR money and you want the biggest refund
you are entitled to.
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