If you’re new to filing taxes, you’re probably wondering whether you’ll be able to accurately file your return with all of the proper documentation. If you’re used to self-filing, you may be interested in looking for an alternative to ease the burden each tax season and take full advantage of all your deductions. Either way, hiring a tax professional may be an attractive option.
Should I hire a tax preparer?
Here are some of the pros and cons of hiring a tax professional:
A professional can save you time
The biggest benefit of hiring a tax professional is that it saves you time. The time you might spend going through paperwork and ensuring the accuracy of your information may end up costing you more than it would if you had just hired a professional.
You can make the most of tax credits and deductions
A tax professional may also save you money on your taxes by properly identifying all the various tax credits and deductions you’re eligible for, which can help you save on money owed.A
Paying the fee
One of the biggest cons of hiring a tax professional is the fee you must pay in order to have a professional file your taxes. Professionals may charge a flat rate, or charge a percentage of your refund. According to a survey by the National Society of Accountants, the average cost of hiring a tax professional is around $246 (depending on your situation and what type of taxes you have to file).B
Online tax preparation software
A good middle of the road option between hiring a tax professional and self-filing is using an online tax preparation software. Many of these services use a question-and-answer formula to determine your filing needs. Services such as these can be a good option for those who don’t have a complex tax situation that requires professional expertise.C
With tax preparation software, you also have the option to select how you would like to receive your tax funds, including through direct deposit to your bank account, splitting funds between multiple accounts, or receiving funds via check.
If you choose to work with a tax preparer, here’s what you should bring:
You’ll want to bring:
- Your Social Security card
- A second form of identification, such as a Driver’s License of state ID
- A copy of your most recent tax return
- Your current tax year W-2 (or Form 1099-MISC for freelancers)
- Information for any additional income sources, such as Social Security of unemployment benefit statements
- Proof of your expenses throughout the year, including any relevant receipts, invoices, or expense logs. Some expenses are tax deductible that you may not realize.
- Any real estate documentation, if you own any. Many tax deductions can be taken from real estate holdings.D
Only you can decide whether or not hiring a tax professional is the right decision for you. Consider the fees associated with all of your options, as well as the complexity of your tax situation, before making your choice.