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Pro or Not? Deciding Who Should Do Your Taxes

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Every tax season, we are faced with a decision: should you let an expert handle it or do your taxes yourself? Especially for the thrifty tax payer, it makes more sense on the surface to do it yourself. However for financial and personal reasons, sometimes taxes aren’t as cut and dry as other do-it-yourself projects. Sometimes it is simply the responsible thing to do to let a professional in the field take the reins when it comes to something as important as our payments to the government.

A large part of this important decision usually boils down to whether or not your taxes are simple or complex. But how do you know for sure? We’ll cover when you should, or shouldn’t, decide to do your taxes without professional assistance.

Do Your Taxes

When Taxes Are Simple

Using common forms such as the 1040EZ or other supporting documents are fairly straightforward, even for those new to filing their taxes. Free IRS forms, or eFiling can make the job even easier, and making the choice to invest with tax software can assist even more. Most entry level to intermediate jobs will provide W-2 forms and even if you don’t comprehend the exact wording on the forms, it’s an easy task to get a more experienced colleague to assist you in understanding where you stand with tax jargon, making the process required to do your taxes a simple part of your routine.

For people like college students or those who are just now striking out on their own, low income jobs and lack of viable assets usually find that their taxes are quite easy to file. People who are single, have no dependents, or are unemployed can also generally complete their taxes easily and with little or no professional help.

..And When It Gets Complicated

As you go through life, it might become complicated to do your taxes alone. Varying factors such as owning or operating a business, purchasing a home, owning a car or other mode of transportation, and unexpected windfalls or losses can catapult your taxes from simple to hopelessly complicated in an impossibly short amount of time.

Filing concerns with state, city, and governmental taxes can become complicated. Having different financial scenarios or an abundance of complexly worded forms are a sure sign that you might want to seek out professional aid when you do your taxes.

It’s easy to miss something even with do-it-yourself tax software that promises to ease of use with premium packages. If your city or state passes new laws and regulations or you’re worried about overlooking a crucially important piece of necessary information that could lead to greater returns, hiring a trusted professional is a smart move that could help you avoid unpleasantness with the IRS as well as gaining you more money than you originally thought possible.

Tax specialists worth your time are usually well-versed in different financial scenarios as well as current tax laws and regulations. This form of expertise can spare you a lot of money and time, especially if you don’t thoroughly understand what you’re doing or can’t get your calculations to add up after reviewing them several times. And remember, not being able to do your taxes isn’t a sign of financial weakness or ignorance. Sometimes letting people play to their strengths is the important thing, particularly if you have a business or dependents that are relying on you to get things right the first time.

Another aspect to consider in the process of choosing whether to do your taxes is whether you have enough time. Sometimes life can get busy or complicated, especially during tax time. Even if you have the skills and know-how to do your own taxes without help, the weighty investment of your time and energy are resources that you can’t get back. This is part of what makes hiring a professional so attractive to most tax payers. Instead of spending hours of your own time that could be spent on other activities better suited to your personality or profession, you hand off the entire responsibility to someone who not only has more experience but more time as well.

Still feel confused? In the end, hiring a tax professional or deciding to do your taxes yourself are both equally valid and potentially profitable endeavors. Which one you decide to go with, however, is completely up to you. When the way your tax situation, deductions, and asset allocation start to matter, that’s generally the time that you need to start looking for a professional, but with enough knowledge of current tax procedures, regulations, and laws it’s possible that the decision to do your taxes on your own would not only be more profitable but more complete than allowing an professional with no personal involvement to handle the situation.

The decision is yours.

Last-Minute Tax Tips for Procrastinators

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We all know that the 15th of April tax deadline is on its way, but there is no need to panic. These tax tips for procrastinators will always help no matter how behind you are. Already, more than half of taxpayers have filed their returns, but annually, about 28% of people usually wait until the last couple of weeks to file their taxes. If this is you, then first of all don’t worry, as below are some last-minute tax tips for procrastinators that will help you avoid any mistakes, increase your refund and help file your taxes by the deadline.

Organize and Gather Your Documents

  • First of all sit down and prepare your taxes.
  • Ensure documents like 1099s from contract work and W-2s documents from employers are all in one place.
  • Receipts for things like job search expenses, charitable contributions and Department of Motor Vehicles fees should not be forgotten.

Go Online

The strategy of preparing e-filed tax returns yourself from home computers has risen to about 6 percent, when compared with the same time last season. This research has been provided by the Internal Revenue Service. Going online is definitely one of the top tax tips for procrastinators, as it avoids the hassle of waiting for an appointment and fitting it into your schedule. This is because you can easily file conveniently from the comfort of your own home. With a simple tax return, you can save from up to $100 as opposed to the leading tax store. One thing that is against the tax tips for procrastinators, which needs to be avoided is waiting until the last minute. However, you have until 11:59 pm on the deadline date, which is the 15th of April.

E-File with Direct Payment

It has been reported by the IRS that about 85% of refunds have been deposited directly this tax season. Not only is E-file with direct deposit easy, but it is also secure and one of the quickest ways to get your tax refund. Related to six to eight weeks for paper-filed tax returns, nine out of ten tax refunds are distributed within 21 days or less.

Double-Check Important Info

Tax tips for procrastinators have no room for mistakes. A common mistake that is made by taxpayers is the last minute rush, which is made in order to meet the deadline. During this rush, taxpayers gather the wrong Social Security numbers for their spouses and children. You need to ensure you have the correct Social Security numbers whilst you are preparing for your taxes. This is definitely one of the best tax tips for procrastinators, as these numbers are required to get valuable exemptions, deductions and credits.

Maximize Your Deductions

If you are single, then the IRS gives you a standard deduction of $6,100 and if you are married filing jointly, they then give you $12,200. However, you may be able to make the most out of your deductions by collecting receipts for expenses like charitable contributions and other expenses, which will give you a better tax deduction.

Take Above-The-Line Suppositions

If you don’t have enough deductions to detail, you can decrease your taxable pay with above-the-line suppositions. This includes, transferring expenses for a job, allowance paid, the educator expense, tuition and fees deduction. Above-the-line suppositions cut your taxes without listing.

Don’t Forget Usually-Missed Deductions:

  • Charitable Donations – if you donated to any charities, then don’t forget to have acknowledgements for your contributions ready.
  • Tuition and Fees Deduction – you may have taken one college course to secure the promotion you have always wanted, but you could still be qualified for a deduction that is worth up to $4,000.
  • Points – you can deduct points if you paid points or loan origination fees for a new home your brought. Ensure that is in front of you, as this will allow you to subtract the amount paid in full. Points paid to refinance your home can also be deducted. The paid points can be found on the 1098 mortgage interest statement and settlement statement.
  • Gamble Losses – gambling losses can balance your winnings up to the quantity of your winnings. So, if you won at the casino last year, that’s another point included on your top tax tips for procrastinators list!

Last-Minute Tax Move

Usually, money-saving tax moves are made by the end of the tax year. However, there is still one more chance to decrease your tax accountability on the taxes you are filing. You can still pay up to $5,500 or $6,500 (if you are over 50) to your specific retirement account until you file by the deadline. Doing this, allows you to gain benefit of a deduction for your contribution.

File Even If You Owe

With an extension, you can get an extra six months to file your taxes. However, you need to keep in mind that this extension is to file and not to pay. You will still need to send the IRS at least 90% of your tax obligation to avoid any penalties; only if you owe money.