Doing your taxes yourself may seem like a viable option, but many people still choose not to do them that way. The main reason that people do not do taxes themselves is that they worry about getting into trouble. The choice is yours, but you should weigh the positives and negatives of it before you make a decision.
The Pros and Cons of DIY
There are both positives and negatives of doing your taxes DIY. The positive side of doing your taxes DIY is that you can save a lot of money by using the government’s site to do your taxes. You can still save money even if you use a tax program to assist you. The simplest tax program may only cost you around $20, whereas you’ll be looking at spending $100 or more to have a professional tax specialist do your taxes.
The negative side to DIY is that you take full responsibility for all information you enter into the forms. Therefore, you will be responsible for any mistakes that you might enter. If you allow someone else to do your taxes, that entity becomes responsible if the I.R.S. needs to audit you for some reason. Doing your own taxes can be hard if you have a complex situation, as well. Simplified tax situations have fewer accidents occur.
Situations Where DIY Is a Good Choice
The ideal situation for DIY taxes is one where you have one W-2 form to file and no itemized deductions. If you were a regular employee of one company for the entire year, live in one state and didn’t have any changes to your dependents or marital status, that would be great, too. You could get away with filing a 1040 EZ form, which is truly easy as pie to complete. You may only have to complete one page of question answers to get to the end of the form and be done with it. That’s virtually no stress at all.
When DIY May not Be the Best Choice
DIY taxes may not be the best choice if you were a freelance worker or a business owner. It may not be the best choice if you own a home, sold your home, have an IRA, invested a lot of money or went to school during the year. Those situations will require you to complete additional information. Then again, many of the modern tax software programs have excellent features that you can use to get through the process of doing your own taxes. The programs do most of the work for you.
Now you should be able to decide whether it’s best for you to try to DIY your taxes or call a professional to give you a wee bit of assistance. Choose the option that gives you the greatest benefit. If you’re confused about anything, just ask your local tax advisor or visit the I.R.S. and try to conduct a search for the information that you need.
Davenport Laroche, a leading shipping container investment agent out of Hong Kong