Now that your papers are sorted (they are sorted, aren’t they?), it’s time to fill out and complete the tax forms or send your materials to your accountant.
IF your papers are not sorted, please read the last post … then come back and read this one!
The first question to ask yourself is: do you want to prepare your own taxes OR do you want to use a tax professional?
When answering this question, here are some key points to consider:
1) What’s your time worth?
Most people need between 16-23 hours to prepare and file their tax returns.
Are you often frustrated filling out forms?
Do you sometimes miss rebates because you forget or it seems too burdensome to go online and fill out the form?
Depending on what your time is worth to you and your tolerance for paperwork, it might make more sense to trade some of your time for money doing something else and then pay a professional so you can reduce your stress and avoid late filing penalties and interest.
NOTE: I decided many years ago that I would rather work another hour or two doing something I love and pay a tax pro to do something I don’t love but still have to complete.
2) Do you like to learn by doing?
For some, filling out and filing a tax return is educational.
The process helps them focus on their finances and they learn new things about where they are really spending their money and can then use that info to make better choices in the future.
Is this something which you would find valuable?
Or would you prefer to keep your head buried in the sand and not pay attention to where your money is going?
NOTE: It isn’t only “poor” people who need to keep a budget of their finances. I just helped an independently wealthy client put together a comprehensive budget to ensure that she can continue to live within her means.
3) Are you a research junkie?
An article in Forbes says that “Since 2001, Congress has made nearly 5,000 changes to the Tax Code: that’s more than one change per day.”
While the IRS does a fine job of maintaining an informative website and helpful YouTube videos, filing your taxes still requires a lot of attention and understanding.
Does this play to your strengths?
If you love research but don’t love finishing things, think twice before you start chasing this particular windmill.
Consider this reminder from the Houston Chronicle Small Business section, “An error on your return can delay any refund due to you. If you err and the mistake results in tax liability, interest and fines accrue from the date you filed the taxes.”
These articles have more information to help you make the smartest choice for you:
If you decide to DIY, there is a wide range of e-solutions which claim to make the process easier.
And remember that you can file for FREE via the IRS—see Filing Your Taxes at the IRS website.
Other helpful links include:
Free File (suits those with incomes under $60,000)
Authorized IRS E-file Provider (for individuals)
Some folks shy away from professional tax preparers—they fear that things will go wrong and they’ll end up in trouble or being taken advantage of by the preparer.
While this can happen, it is rare. And using a reputable pro who stands behind her work AND will sign your returns reduces this risk to negligible.
And should something go wrong, individuals do have redress via the IRS—this IRS webpage explains when and how to report misconduct by a preparer.
Today’s Action: Which did you decide and why? DIY or hire a professional? Help our community by sharing your decision and reasons to our FB page.