Hire a Pro or Do it Yourself – the Best Way to File Taxes
By Alan Olsen
It’s that time of year when you’re starting to accept the cold harsh reality that your taxes aren’t going to get done by themselves. No matter how long you hide all your paper work in a file cabinet, or tucked under a pile of junk mail, they’re still going to need your attention at some point. By now you should have received all your W-2s, 1099s, and any other tax forms you need, so all that remains, is getting down to business. It’s time to do your taxes. You do have an alternative, though: you can hire a professional to prepare and file your taxes for you. Of course there are some pros to doing your own, taxes, but the question each person has to answer is do the pros outweigh the cons. The answer is up to the individual.
Advantages of Doing Your Taxes
So what are some of the advantages of doing your own taxes, without the help of a professional? Perhaps the number one reason people do their own taxes is because it’s cheaper than having a professional do them. So, yes, you can save money by doing them yourself, especially if your tax situation is still very simple. However, if your taxes are complicated, then you might end up losing money. The reason: you could very likely end up making a mistake that will cost you more than you would have paid if you had just hired a professional in the first place. Another advantage to doing it on your own is the time factor. Again, if your taxes are simple, then you can do them much faster than it would take to find the right CPA and go through the entire process with him or her. One more benefit of doing it yourself: you get a personal education on the tax system.
Why a CPA Is Better
If your situation is much more complicated, which is the case for most high net worth individuals, then saving the time and money by doing your own taxes does not outweigh the benefits of hiring a CPA. First, you get expert advice and direction. A qualified CPA knows the tax code, including all the most recent changes. He or she will be able to make the right tax-saving moves in order to get you the best outcome possible. Additionally, as mentioned previously, you might end up saving more money by hiring a professional because they won’t forget any important deductions or credits that you might not even be aware of. As for time, if you do have a complicated tax situation then doing your taxes is likely going to take you many long, tedious hours of work.
Make Your Choice
So which option is right for you? Ultimately it comes to down to your personal tax situation. If you value your time and money, then determine which one will save you more of both. In the end, for most people, especially high net worth individuals, the pros for hiring a professional far outweigh the cons.