Tax Preparation: Should you do-it-yourself or hire a professional?
Tax preparation requires keeping up with the latest tax laws. This article explains different avenues of preparing your tax return, as well as why you might want to seek a tax expert to prepare your upcoming tax filing. It briefly distinguishes tax firms and why you should not always shop for price but rather value.
DIY: Tax Return by Hand
While many people prefer to prepare their own annual tax returns, it may be best to change this old-fashioned habit and seek professional assistance. By using tax software, you will reduce mistakes, have the ability to e-file, and quickly send your return to the IRS with immediate electronic confirmation.
DIY: Tax Return by Tax Software
There is an oft-quoted saying in computer programming: “Garbage in, garbage out”. Assuming you are fluent in a particular brand of tax software, you may potentially become more productive in better understanding the language of taxation. In the case of a very simple tax return, it might make sense to use tax software. For a more complicated tax return, however, there are significant variables to consider. In 2012, the IRS estimated that the average taxpayer spent about 22 hours preparing their simple 2011 tax return. This time went up to at
least 32 hours for more complicated tax returns, such as those requiring either a Schedule C,
1. What is the “true cost” of doing it yourself? E or both. Moreover, tax laws constantly change. Case in point, over the past 49 years, the majority of U.S. tax laws have been repeatedly amended over 90% of the time. From year 2000 to 2011, there were 3,500 tax law changes. Given the, you should ask yourself the following questions.
Answer: 22 hours x your wage per hour + software cost + potential mistakes; assuming you make
only $20 per hour and the software cost of $59 including e-filing privilege, then your total cost is about $499, not factoring cost of correcting any mistakes. Correcting mistakes can prove far more costly. There is professional fee and potentially IRS assessment. If you have been preparing your own taxes, it might benefit you to get a FREE tax audit. Our tax company offers this service for FREE.
2. Are you knowledgable with tax law so as to ensure that you are answering the tax software questions correctly?
Hiring the Tax Professional—Who?
ITS Financial Groups is located on 1516 W. Redondo Beach Blvd in Gardena. Within a 1 mile radius of this location there exists at least a dozen tax companies. The credential and relevant tax experience of staffs among tax firms range from having none to having highly qualified associates. In general, the taxpayers ultimately are responsible for mistakes. So instead of just hiring anyone to prepare your tax, do your homework. Treat it as if you are getting a major medical procedure done. Would you want just anyone to operate on you? Good tax accountants go beyond inputting figures. First, they will ask tons of questions to understand your specific situation. Second, such top tax accountant seeks to cover lawful tax credit and deductions. Third, they will give you some advice and future tax planning. Lastly, a great tax accountant who has a coordinated financial team is hard to find. Tax and financial mistakes can cost you hundreds, even thousands of dollars over your lifetime. Opinions are abundant and cheap, so it is best to shop for value instead of price when it comes to professional services. Look for a tax company that will give you at least 20 minutes complimentary meeting, because value takes time to judge. Ask lots of questions and ensure you are completely comfortable with their resources. Should you need further guidance, please do not hesitate to contact us at 424-999-8829. To learn more detail about “How to Pick the Right Accountant”, read our article on the home page.