Should You File Your Own Taxes or Hire a Professional?

Unless your income and filing status remain the same year after year, your tax situation is always changing.

The question, “should I file my own taxes or hire a pro to help” is a dilemma that should be revisited every year. As my hobbies and passions have grown over the years, I found I need more and more guidance to help file my income taxes.

I eventually decided to add to my accounting skills and take 2 years of Income Tax classes to increase my knowledge.

You are probably in the same situation. As we get older, add more people to our lives and increase our business, we need to evaluate when/if we need tax advice.

When to file your own taxes:

There are important factors to consider once you decide to file your own taxes. This is definitely not a decision you should make hastily. You can confidently file your own taxes if…

You’re a numbers kind of person.

If you enjoy keeping track of all the numbers, transactions and receipts then by all means you’re the best person for the job. You know the ins and outs of your situation the best, and can control everything accurately.

Your tax situation is simple or unchanged.

If you only have one job, don’t have any dependents and have no other investments or sources of income, your can easily file your taxes on your own. The IRS even offers free efiling for taxpayers who have simple returns.

You don’t own property or investments.

Once you acquire property, investments or retirement accounts, it can be difficult to stay up-to-date on everything. Each type comes with deductions and credits that can be very beneficial to your taxes. Having a professional to help in the case, is probably the best idea.

You can understand tax laws.

If you can browse the IRS website, comprehend their tax jargon and stay up-to-date with changing tax laws, then go for it. Some of the forms and laws are simple and can be interpreted with a little research. Taxes Made Simple: Income Taxes Explained in 100 Pages or Less, is a great guide if you’re attempting to do your own taxes.

When to hire a professional:

While I’m slightly partial to hiring a professional for help (being a tax consultant myself), it’s really only necessary for certain people. Hire a CPA or Tax Professional if…

You can’t get a handle on your money.

If doing the books and tracking the numbers just isn’t your forte, please hire someone to help. There is no reason to get yourself into trouble, or get in over your head.

Hiring a tax preparer is like finding the right tool for the right job, the whole thing can be done correctly from the beginning (and potentially save you $$ in the long run).

You started a new business.

Starting a new business or hobby venture takes expert knowledge. You wouldn’t jump off a diving board without swimming lessons, so you shouldn’t try to do your business taxes without some guidance.

Tax experts can help you find lots of deductions and prevent you from getting into trouble. Those savings and peace of mind alone, can pay for themselves.

You got married, divorced or had a child.

If you got married/divorced, had another child or lost a spouse, you might need help finding the best filing status for that year. Some of them are easy, but others (like being a widow) have time sensitive dates.

Also, as your children get older tax credits and deductions might expire depending on their ages. If your child starts going to college full time, you can still claim them and any education expenses, until they’re 24. Determining these situations accurately takes someone who is knowledgeable.

Benefits to doing your own taxes:

  • It’s less expensive
  • Takes less time
  • You know all the details

Benefits to hiring someone:

  • They stay updated on changing tax laws
  • You get expert and experienced advice
  • An extra set of eyes to catch mistakes
  • They become your advocate
  • Find little known tax deductions
  • They give tax guidance throughout the year

Personal Testimony: One of my friends normally does her and her husband’s taxes herself. Sometimes she will ask me questions for any tips and advice. A few days ago, she was about to file her taxes and asked me to double check her information.

First off I noticed they bought a new house last year and they might qualify for a few credits. One being the Homebuyer Credit and maybe the Energy Saving Credit.

As I verified everything I found they DID qualify for the credits! This is one instance where, it definitely pays to have an expert check your work.

The Bottom Line

In the end, it’s completely up to you and what you’re most comfortable with. You can always find an expert to help and then phase them out if you don’t need the advice.

But in the event you’re not able to keep up, having a trustworthy tax professional in your corner, can make all the difference.

Do you file your own taxes or get a professional to help?

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About the author: Carrie Smith is the financial artist and owner of Careful Cents, a site that helps creative freelancers discover the art of making a living. In May 2013 she quit her full-time accounting job to pursue entrepreneurship and blogging. Since then she’s been featured in sites like The Huffington Post, Glamour Magazine, and Kiplinger Finance. In her spare time she enjoys painting, sketching, and making food with her chef husband. You can connect with her in real time on Twitter or Instagram: @carefulcents.

12 Comments... Read them below or add one of your own

  • Broke Gal NYC February 9, 2012, 9:04 am

    I do my taxes myself, but I usually ask tax pro friends for input if needed. If I ever started feeling really overwhelmed I would hire someone. Your friend is lucky to have you to check her stuff.

    • Carrie Smith February 9, 2012, 2:15 pm

      Thanks! You can always ask me any questions too, I’d love to help if I can. :)

  • Jeffrey Trull February 10, 2012, 7:25 am

    I’m still on the fence on this for this year’s taxes. I typically feel like I have a good handle on my return and always do it myself, but I did start a business last year and I am filing a Schedule C for the first time. There’s a few things that I’m uncertain about with that, which is why I’m considering meeting with a professional.

    • Carrie Smith February 11, 2012, 5:26 pm

      I think once you meet with a professional and get them to help you for the first time, you can probably file your own taxes every year. You’re a smart guy, so once they get you on the right path I think you can handle it. :) If you have any questions, I’m available if needed. I’m a pro at schedule C’s.

  • Modest Money February 10, 2012, 4:58 pm

    Smart idea to take the income tax course.  That must help out a lot and could always act as an additional source of income around tax time.

    Personally I usually do my own taxes, but I have tried using a professional in recent years.  I was hoping that they could find other deductions to claim on my home business.  If you do decide to use a professional for taxes, check sites like craiglist.  There are plenty of professionals doing taxes from home for much cheaper than H&R Block.

    • Carrie Smith February 11, 2012, 5:23 pm

      Taking the tax class was the smartest decisions I’ve made in my life. I like to be in control of my finances, so if I don’t know very much about taxes, investing or something like that, I will research it and study till I do.

      Good tips on using sites like Craigslist to find a tax professional. I never thought about that. Thank you.

  • Kristina March 17, 2012, 3:23 pm

    I always file my taxes with an accountant. I work with numbers all day and the last thing I have the patience for at the end of the day is my own personal income taxes.  Also if family and friends hear about me doing my own taxes they may ask me to file theirs and I may feel obligated to say yes. I have a great accountant and I know that I personally couldn’t do a better job.

    • Carrie Smith March 17, 2012, 3:54 pm

      That’s a really good point. I actually had one of my co-workers do the number crunching for my taxes this year, because I work with it all day long. It’s nice to have a second opinion too, and a second pair of eyes to catch mistakes.

  • Shilpan March 17, 2012, 7:52 pm

    I own businesses, so it is very helpful for me to hire a professional who knows nuances of tax laws and latest changes to help me save on my taxes. 

  • Hire Professional Accountants of Charter Partners May 26, 2014, 12:20 am

    Like Broke Gal NYC, I also do my taxes by myself. If things seem to be complicated, I always dial a friend. I’m just lucky enough to have CPA friends. They have been very helpful from the start.

  • Choose Accounting Services of Charter Partners May 28, 2014, 2:55 am

    Paying the taxes requires a complete business records or also it can be a time consuming task, so it is beneficial to hire the professional accountants!!!!!

  • Choose a Tax Accountant June 18, 2014, 4:50 am

    I have hired a tax accountant to manage the records of my business, because I don’t want any mistake that generate a great problem for my business.

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