Tax Prep Debate: DIY or Hire a Pro?

taxes1.jpeg
Posted on 02/24/2012

Whether you’re expecting a tax refund or will have to pay out of pocket, it’s going to cost you an average of $258 to get your taxes prepared. According to Forbes.com, about three in five taxpayers now pay CPAs, enrolled agents, H&R Block or other services to prepare their tax returns. Twenty-nine percent of Americans choose to use software like TurboTax. Cost aside, here are some clues that will guide you in deciding whether to do your taxes yourself or hire a professional.


Is Your Income Over $50,000? If you make more than $50,000 a year, financial pro David Bach says hire a pro. He believes that shelling out $500 for professional tax help will save you five to ten times your investment. That’s like shaving $2,500 to $5,000 off your tax bill.


Do You Rent?
There are certain life events that make taxes more complicated and buying or selling property is one of them. If you don’t own property, don’t have significant investments and you have a standard job then there’s no reason why you can’t do your taxes yourself.


Are You Self-Employed?
If you’re self-employed then you may want to enlist the services of a tax professional. Being self-employed adds a degree of complexity to your tax paying process. And having someone professionally educated in the process could help ensure you’re not paying too much or too little.


Are You Comfortable With the Tax Filing Process?
If the thought of W-2s and Earned Income Credits make you break out in a sweat, then you may want to hire a pro. But if you’re comfortable with the idea of doing your own taxes and not worried about making a costly error then go ahead, give it a shot.


Can You Afford To Hire a Professional?
The cost of hiring a CPA or tax attorney can vary greatly, but it will at least set you back $100 or more. You probably won’t pay nearly as much if you use software to complete your taxes yourself. But then again, getting professional help could pay off. Just like with any decision, you must weigh the pros and cons before deciding whether to take the DIY approach or not when it comes to filing your tax returns. No matter what you choose, don’t forget you can write off your tax preparation expenses.


By Alison Storm


Shop The Children's Place for adorable outfits for your little ones! Save 15% sitewide when you use coupon code X3G2012 at checkout. Coupon is valid for use through 02/26/2012.

* Hot deals expire quickly. This deal may no longer be valid.

Post A Comment