It’s everyone’s favorite time of year…tax season! That is just a joke, of course. We all dread having to file our taxes every year because the process can seem tedious and confusing.
As tax season approaches, many people find themselves wondering whether they should tackle their taxes on their own or hire a professional. Doing your own taxes has its advantages and disadvantages, and it’s important to weigh them carefully before making a decision. Here are some of the pros and cons of doing your own taxes:
● Cost-Effectiveness: It may seem that the biggest advantage of doing your own taxes is that it won’t cost you anything as opposed to hiring a professional that may charge per hour or per job. The good news is that there are a lot of great online tools that can make filing your taxes relatively easy, even if you have no idea where to start. The only downside to those online tools and software is that even though they may seem easy, they can get confusing if your taxes are complicated. Also, they may advertise that they are free to use, however, if there are any variations in your taxes, like if you want to make extra claims, file multiple W-2’s, or work as a contractor or are self-employed, the software suddenly becomes not so free. You’ll have to pay to use “premium” features on the website and in some cases, it can become just if not more expensive than hiring a professional to help you with filing.
● Control: It might seem like filing your taxes yourself gives you complete and total control so you can get the biggest refund. You might think that if you hyper-focus on every detail, you won’t miss anything but if you let another person take over, they might miss a key detail which could cost you money from your refund or even add to what you owe. The fact of the matter is, you are far more likely to get the most thorough job done by someone who knows the ins and outs of the tax world. Here’s an example of that: A man was referred to a CPA who discovered that his taxes had been improperly filed previously. It ended up being a mistake that was worth $50,000!
● Time: Doing your taxes can be time-consuming. Depending on how you are filing, it could take hours. That time is likely to be streamlined by a professional who knows what they’re doing and won’t have to stop and look information up or check progress as often as you might have to if you have a lack of knowledge and/or expertise.
● Empowerment: Sure, it can feel empowering to file your own taxes and you may feel extremely accomplished and capable afterward, however, what if you make a mistake? What if you miss out on money because you filed something incorrectly? It won’t feel so empowering if you completely mess up your taxes because you didn’t have a professional look at them.
There are definitely pros and cons to filing your own taxes, however, it’s important that you understand the possible repercussions and benefits before you decide. Aha! Financial can help you find a reputable CPA if that is what you are looking for.
While we worry about taxes at the end of every year, the truth is that we should be worrying about the bigger picture and what the future holds for our finances. Retirement, savings, and investments are all important factors in our journey to financial success and Aha! Financial can set you up for that success!