Should You E-File Or See A Tax Specialist For Your Returns?
Does the thought of tax time send shivers down your spine? Like it or not, your taxes have to be filed. The question that remains is, how will you get them done? Unless you're the pen-and-paper type, your two main options are using a software program or paying a specialist. Here's help for deciding which route is best for you.
Using Software
Pros:
Low-cost: If you're on a tight budget, the cost of visiting a professional may seem like more than you can afford. Tax software can be purchased at reasonable prices. In fact, there are even no-frills free programs available.
Quick and easy: If your taxes are fairly straightforward, inputting the figures into a software program and letting it do the calculations doesn't take very long. If the only things on your tax plate are a W-2 and a standard deduction, you may be able to use software to have them over and done with in no time flat.
Cons:
Computer skills required: If your computer skills are virtually non-existent, using software may be more of a hassle than it's worth. If you're not confident when it comes to computers, you may want to avoid trying tax software.
Not foolproof: Neil Johnson, The Tax Dude, points out, "Tax software is a tool. It lacks human intelligence." There's a good chance, especially if your taxes are a bit complex, that software will end up costing you. Whether that's because you enter information incorrectly or miss a deduction you could have taken, it may pay off to spend the money on a tax preparer's fee rather than rely on software.
Enlisting a Professional
Pros:
Personal touch: Sometimes it's nice to have the assistance of a real, live person. If you have questions about various deductions or credits, you can turn to your tax pro for the answers you need. You can also ask for help in planning ahead for next year's taxes.
A trained eye: Many tax professionals have been doing this job for years, and they have acquired plenty of knowledge and experience that helps them catch the little things that you or a software program might miss.
Cons:
Higher cost: It's hard to beat the cost of free software. You'll probably pay more to have your taxes prepared by a specialist than you will to purchase a program. However, if a pro finds ways to increase your refund, you may be glad you shelled out the money for his services.
Varied experience levels: Not every tax preparer is of the same caliber. Some are seasonal workers who receive only a modest amount of training, while others are year-round professionals who can offer financial planning assistance in addition to preparing your tax returns. Johnson suggests, "The best way to find a good, qualified tax pro is to ask your friends and co-workers."
When it comes down to it, the choice between tax software and a specialist is really up to you. For a simple return, you may find that the low cost and convenience of a computer program makes it the best choice for you. But if you can afford to hire a pro, it may significantly pay off in the long run, especially if your tax situation involves more than just bare bones calculations.
One final note: Whether you figure your taxes by hand, use software or have them professionally done, your return can be submitted electronically. In fact, the IRS recommends e-filing as the best method of filing your taxes, because it's safe, convenient and efficient.
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Meghan Ross is a freelance writer covering all things home and living. Her work can be found on Examiner.com.