With the numerous tax preparation software products currently available, is it truly beneficial to hire a CPA or professional tax preparer to complete your taxes when you could do them yourself?
Unfortunately, there is no definitive answer to this question. Instead, you should examine your personal situation and needs. If you are motivated, capable and have plenty of time, self preparation of your taxes may be the way to go. Taxpayers who file a simple 1040 with few credits or deductions usually find it relatively easy to interpret the forms.
Conversely, taxpayers with intricate returns may be overwhelmed by constantly changing tax laws and complicated deductions. Complex returns usually involve items such as rental real estate, many investments or numerous Schedule K-1s. The calculations surrounding earned income credits and the new investment tax (Form 8960) have also served to make self-preparation more difficult.
As a general rule, if you are not 100% sure of what you’re doing, it’s time to call a professional. Even one wrong answer to a question can lead a return with significant errors. By choosing a certified tax professional such as a CPA, you can eliminate many of these risks, save time and avoid the frustration and confusion of dealing with complex tax laws.
In case of an audit, CPA’s, enrolled agents and tax attorneys will usually provide full support their clients. They are also allowed to represent citizens in front of the IRS. This process will be covered by a separate contract and fee, outside of the tax preparation services.
If, after examining your situation, you realize that it would be unwise to self-prepare your taxes, it is important to look at more than one tax professional. While there is little variance in the services you will receive, the rates charged can differ widely. Find a CPA who will give you quality service without draining your wallet.
The post Tax Returns: Self-Prepared or Professionally Completed? appeared first on .