When it comes to preparing your tax return (personal and/or as a business owner), you have three options. Do it yourself by hand, use a tax software or hire a CPA or professional tax preparer to do it for you. But how do you know which option is best for you?
Unless you’re filing with a super-simple EZ form as an individual, tax preparation can get complex once you start having to make deductions, claim tax rebates, and so on. When doing it by hand, it’s easy to make mistakes or miss opportunities that can help you maximize your tax return. So, that leaves two primary options to consider.
Let’s take a look at the pros and cons of tax software vs. an accountant:
Using tax software will almost always cost less money than hiring a professional. It can also be a relatively quick process when you have all the necessary documents and information in front of you. Tax software is designed to simplify the process and walk you through each step of filing.
On the negative side, a lot of the responsibility is still on your shoulders to provide accurate information, answer all the questions honestly and type in the precise amounts. If the IRS chooses to audit you, the tax software can’t really help ease the process because it is just calculating based on the numbers you put in.
The cost of hiring an accountant can pay for itself (and then some). Professional tax preparers are using much more sophisticated software than what is available on the consumer level. Plus, they provide a human perspective. They can talk with you, explain tax deductions/rebates, ask questions, gather more information and provide valuable advice as they walk you through the process, making sure you get the most out of your tax return.
When you hire an accountant to prepare your taxes, you have more access to them year-round. This is especially helpful for small business owners, contract workers or freelancers who need to pay quarterly estimated taxes. Your accountant is available to answer questions and offer advice unlike one-time-use software.
Last but certainly not least, a professional accountant can help handle more complex issues. From the filing process to audit services, you have an experienced expert on your side to deal with any complications.
Ultimately, it is up to you if you want to invest in a CPA to handle your taxes or trust in tax software. But it is helpful to know the benefits of what an accountant can do for you. For more information about filing your tax return and how our accounting services can help you as an individual and/or small business owner, contact Ferguson, Timar & Company today.