So, if your income tax preparation involves a few W-2 (salaried income), 1099s for interest and dividends and capital gains, even a 1099B for stock transactions (NOT Crypto, nothing more than 5 transactions), then you should be doing your own taxes. Because a professional is going to have charge way more than you want to pay to prepare your taxes. And, the professional won’t be able to come up with a lower tax bill than you could by yourself.
I would recommend that you purchase Turbotax off the web and complete your tax return. That way, you can eFile the return (you definitely do NOT want to submit a paper return!!!!) and be done with it simply.
If you are still a little nervous, you can pay Turbotax a little bit more and have a professional work with you to ensure you are filing properly. (No, I am not talking about having them do your taxes for you- this choice just provides you a talented coach to help you file your own taxes.)
The IRS says it should take you less than 13 hours to do your taxes (I think that number is highly inflated. Admittedly, I am a talented professional- but I can know that simple sort of income tax out in under 30 minutes.) If you are self-employed or have a sole-proprietorship, then you probably spend 25 hours- and that’s about the time you will find hiring someone like me will not only make your path smoother, I am virtually certain, I will save you more than a few Jackson’s ($20) and even a Grant ($50) or two.
Given the pandemic, some of you may find you have to file income taxes to more than one state. That could get tricky, and using a professional will help- but may still inflate the costs. So, that’s a toss-up.
But, once you get into restricted stock sales, rental property sales, and the like- then you will appreciate and benefit from using a professional tax preparer.
And, if you have a business (an LLC, a C corp, a partnership, or an S Corp, then you should opt for helpers to finish your taxes.
We are ready to help you when you need us!
There are also specialized situations that require a professional (in my humble opinion) – for example my husband is the guardian for his developmentally disabled brother and there is a trust involved. My late mother in law, may she rest in peace, never looked into many things she should have and it was worth it getting the professional our financial advisor (who also has a similar situation in his life) recommended. Sometimes extra cost is worth it for those who don’t know the first thing about tax codes – if you can afford it.
Great advice, Alana. Thanks for sharing.