By Lee Sherman
With the deadline for filing your taxes fast approaching, you’re probably giving some thought to whether or not to prepare your taxes yourself or hire a professional. If you go the DIY route, you’ll likely want to use tax preparation software. While there are others, the most popular software for preparing and filing your taxes is TurboTax, made by financial giant Intuit.
Now, whether or not using your own software is right for you will come down to several factors. If your taxes are particularly complicated such as those of independent contractors or corporations, then a certified financial planner, accountant, or tax preparer may be far better equipped to ensure that you get all of the credits and deductions to which you’re legally entitled. Be aware that tax law changes all the time and a professional is more likely to be up on the latest regulations. With a tax preparer, you are much more likely to avoid an audit, and if you are audited, your tax preparer will go with you to the audit, providing a level of insurance that just isn’t possible with software. As much as you might think you can do this yourself, remember that tax preparation is a skill and it may be worth paying for, especially since you’re likely to make up the cost in the form of tax savings or a bigger refund.
Tax preparation software is affordable. Depending on the software you choose and where you purchase it from (Amazon has some fantastic deals) it will cost less than $100, including filing your returns electronically. In some cases, it might even be free (if you meet the requirements for form 1040EZ, TurboTax will complete your return for you). Because it is already set up for the purpose of calculating your earnings and listing your deductions, it is much easier to use than a spreadsheet (or if you’re really old-school, a piece of paper and a pencil). It’s faster. The key to using tax software is that it is automated. For most returns, it’ll take less than a half-hour to complete and even file it. If you’re something of a Luddite when it comes to technology, consider that tax software is perhaps the most user-friendly you are likely to encounter. Most use a wizard that asks you a series of questions and then does all of the necessary calculations for you (this is another advantage over the spreadsheet approach since you don’t have to write any formulas). If you found this article without any trouble, you’ll be up and running almost immediately.
There’s nothing we can do about the need to pay taxes but we can tell you that, if you don’t want to pay anything for filing, you can always file electronically for free at the IRS website. While not quite as slick as a program like TurboTax, this site has improved greatly over the years and is now a reasonable alternative. The online forms mirror their paper counterparts but perform the calculations automatically just like TurboTax.
Lee Sherman is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Lee is an experienced journalist and editor with over 30 years of expertise with a significant history of writing in the personal finance and technology arenas.