Filing On Your Own
Albert Einstein once said, “The hardest thing in the world to understand is the income tax.” Well, they don’t call him a genius for nothing!
Truthfully speaking, tax laws are complicated and every year new tax laws come into play. Obviously, a professional accountant has the knowledge to handle any changes in tax law and smoothly file taxes online. By comparison, you, as an inexperienced novice, could end up missing important deductions.
If you’re considering filing your tax return on your own, there are several factors you should review.
How Simple is Your Tax Situation?
The less complicated your tax situation, the more sense it makes to file on your own. For example, if you have only worked one job during the year and are not claiming itemized deductions, then filing on your own is a straightforward process. However, if you are self-employed, own your own business, or need to itemize your deductions, then an accountant can prove useful. If you think you qualify for education, child tax, retirement savings contributions, or other credits having an accountant can help you get the largest possible return.
How Costly Will Filing Your Own Taxes Be?
For individuals filing their tax returns through national preparation chains, the price typically runs between $100 to $200. Online tax preparation programs and software will range about $100 with the cost of buying the program and the filing fee. You can always choose to fill in paper tax forms, but the process can be inconvenient and confusing, especially if you are new to filing your own taxes. The IRS, however, does offer an electronic version of these forms that are free for anyone to use. Much like the paper forms, however, these forms are basic and may not be ideal for those without much experience filing on their own or those looking for more advanced error checking to avoid delays in getting back their refunds.
The most popular option for those choosing to file on their own is use IRS Free File. A number of leading tax preparation software companies offer free filing of the federal return (and some states). To qualify for free filing you have to access these companies through IRS.gov and have an adjusted gross income of $58,000 or less. Some companies may have additional eligibility criteria such as being within a certain age range.
The benefit of tax preparation software for those looking to complete their tax return is the software’s ability to ask questions tailored toward your individual situation. Software programs also simplify the process for individuals who need to claim disability, retirement, and other forms of income, thus ensuring even those with limited awareness of how deductions work can get the biggest possible refund and that their tax return is likely error free when filed.
Even if you don’t qualify for free file, you can use still use tax software to complete the return. Since tax software programs don’t charge until you file your return, you can check with several tax preparers for accuracy and then choose to file your program through a different method to save the fee.
The truth is anyone can learn how to do their own taxes and file taxes online with a little research. If you have income from several different sources, are confused about tax laws or don’t have the time to research tax questions that may arise, however, then skip the do-it-yourself route. Instead, you should contact a certified public accountant, tax attorney or other tax professional to ensure your taxes are completed correctly, and you take advantage of all possible deductions.
Free File: Frequently Asked Questions (https://www.irs.gov/efile/article/0,,id=220412,00.html)
H&R Block Estimate Your Return (https://www.hrblock.com/taxes/doing_my_taxes/price_estimator.html)
(Photos courtesy Public Domain Photos; PublicPhoto.org/)