Filing your taxes can be frustrating and confusing, and you might be wondering if it's worth using a tax preparation service, or if it's better to go at it alone. There are many new programs that allow you to fill out your taxes online, as well as e-file. The process has become easier than ever, even if you don't have accounting in your background. Still, there are instances when you are going to need guidance.
Using a Tax Preparation Service: Advantages
If you have a complicated tax return that includes many credits, itemizations or other details, then you might want to consider hiring someone to do your taxes for you instead of going at it alone. If you don't want to hire an accountant, then you could consider a company such as Liberty Tax Service, Jackson-Hewitt or H & R Block. These companies, and companies like them, deal with taxes and make it their business to be up-to-date on the latest changes. They will also charge you considerably less than a CPA.
However, a CPA might be better if you own a small business, or a large business, and your preparation is a little more complicated.
Using a tax prep can also save you time. If you try to do it yourself then you might end up spending many hours, usually late at night, trying to figure everything out. Then, of course, there is always the chance of making a mistake.
Using a Tax Preparation Service: Disadvantages
The price is probably what turns most people away from hiring someone to do their taxes. Some businesses charge quite a bit to file taxes, especially when you consider that you can do them for free yourself online. Trying to set aside some time in your day to meet with a tax preparer can also be a hindrance. In addition, it can be difficult to tell how good a tax preparer is. Will they know all of the current tax laws? Will they really find all of the deductions that you can have? Will you you really get all of the money that should be refunded to you? These are questions that many people have when trying to decide if they want to pay someone or simply do it themselves.
If your taxes are fairly straightforward, then you might be better off using an online service like Turbo Tax or H & R Block's online service. Their features run from free for simple returns to around $30 or more for more complicated returns. They walk you through the process step-by-step with a series of questions.
Using a Tax Preparation Service: What You Should Bring
If you use someone to do your taxes for you, you will still have to get together your financial information. You will need to bring along your W-2s, 1099's, 1098's, your federal and state returns from the previous year, your driver's license, charity receipts, child-care receipts, receipts from large purchases that you are claiming, student loan interest amounts, and anything else that you might want to claim.