Do you need a tax preparer?
As you begin thinking about filing, one question you may be asking yourself is whether you should file your own taxes or hire someone to do it for you. Here’s what I suggest:
If you do it yourself…congrats! I’ve always believed that one of the best ways to get a grip on your finances is to prepare your own tax return. Sounds daunting, I know! But even if your situation isn’t completely straightforward – if you did some freelance work last year, for example – I believe that DIY-ing at least once is helpful and doable, as long as you:
- Use your past returns as a guide (even if those were prepared professionally).
- Rely on a good tax book (I like the JK Lasser’s Your Income Tax series) or software like TurboTax. Rely on an updated book or software, since tax law is always changing.
- Try IRS.gov, which provides comprehensive info on every topic you can imagine. It’s not exactly plain English, but it’s not as impenetrable as you might fear.
- File online using the IRS’s e-file system.
If you use a tax preparer…I understand! The tax code is about 14,000 pages these days, which is pretty intimidating. Even the commissioner of the IRS doesn’t do his own taxes! So if you’re determined to get some outside help, here’s what I suggest.
- Make sure to ask up-front what the preparer charges for his/her services and shop around to make sure you’re getting a fair price.
- Try chains like H&R Block, or local independently-owned storefront accountants, for the cheapest options. If your taxes are relatively simple, any of these places should be able to do the job, though you should keep in mind that the level of expertise can vary quite a bit.
- Avoid the “pop-up”-style shops that just open for a few months around tax time, and then close at the end of April. They’re less likely to be staffed by the best professionals.
- Ask your friends and family members if they have good local recommendations.
If your taxes are extraordinarily complicated…you might need to call in the pros. A higher level of tax protection is necessary if, say, you’re completely self-employed, you received a large inheritance last year, or you got divorced. Some options:
- Consider a certified public accountant (CPA), who have to meet tough licensing requirements. Ask for their price up-front and shop around to judge whether it’s fair.
- Find an “enrolled agent,” which means the preparer has passed a tough exam or worked for the IRS as an auditor (or a similar job) for at least five years. You may be able to find an enrolled agent at a chain like H&R Block; ask before you make your appointment.
In the end, even if you pay someone else to prepare your taxes, you are ultimately responsible for making sure all the information is accurate. Take your time and look it over before you sign on the dotted line.