Hire an Accountant Or Do it Yourself?

One of the most common dilemmas encountered when filing an income tax return is who to enlist in preparing the return. Whether you choose to file your income tax return with the aid of a professional accountant or just your own resources, there are a few factors that must be considered. Of course, cost efficiency is important. But beyond value for your money, you want to be sure that the tax return guidelines do not confuse you. After reading this article, you should be able to choose between using a professional accountant or just tax software to file your tax return.

In general, when all you have to report is a W-2 from your employer and maybe some interest income, it is more cost effective to file your return on your own – if doing so is not too difficult or time-consuming. There are several inexpensive tax programs that provide step-by-step guidance to ensure that the various forms are correctly filled out. For those with limited budgets, it is the preferred solution.

However, in most cases there are many complicated tax rules that apply; filing a return that does not comply with these rules can result in overpayment or even charges of tax evasion. Some of the most common scenarios involving such rules are: capital gains or losses, sale of a primary residence, rental property losses, casualty losses, employee business expense, medical costs incurred for a dependent parent, marginal loan interest, and investment advisory and other professional fees. When filing any tax return involving complicated tax laws, the advice of an experienced accountant is invaluable.

Even for individuals whose situations are not particularly complicated, there are still benefits to hiring an accountant to file their tax returns. Accountants have a very thorough grasp of the tax laws and filing procedures, and can complete and file tax returns far more quickly than the average taxpayer. Accountants can also utilize their extensive experience with tax laws to ensure that your return complies with all applicable regulations, preventing complications that might delay your refund. Most importantly, accountants can employ their comprehensive knowledge of tax regulations to maximize your deductions and credits to obtain the lowest possible tax outcome for you. For the average taxpayer who is not quite as well versed in tax laws, tax preparation can be stressful and difficult. The average taxpayer may not be aware of certain tax benefits to which he or she is entitled, or may incorrectly fill out their tax forms, resulting in a less-favorable tax outcome. Not only can an accountant provide peace of mind, but an accountant can also save you time and money when filing your tax return.

In conclusion, for the simplest of tax scenarios, employing tax software to file your tax return should be sufficient. But for any of the aforementioned complicated tax situations, or for those who are unsure or unable to file their own tax returns, hiring an accountant can be an excellent decision. For any questions regarding this article, feel free to contact us at gotacpa@gmail.com.

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