Should you hire someone else to do your taxes, or do them yourself? The answer depends on your individual circumstances, how comfortable you are with tax forms and recent changes to tax law, and how well you understand the process. How many income sources do you have? Do you own your own business? Have you had many life changes over the past year that will affect your deductions?
You can easily prepare your own taxes and file them at no cost if your adjusted gross income falls within a certain bracket and you use the standard deduction. If you are expecting a refund, filing online and requesting direct deposit into your bank account is extremely simple. Even if you are itemizing your deductions and required to pay the IRS an additional tax amount, it is still possible and sometimes preferable to prepare your own return using one of the many downloadable software programs or online websites that are available these days.
If you have a complicated financial situation, preparing tax returns on your own can seem a daunting task. However, it is not really that difficult, even for the self-employed business owner. As with simple returns, filing online is just a little data entry, using all the documents that you have either received from employers and financial institutions or that you have accumulated in the operation of your own company. And with the business software that is becoming commonplace, creating tax documents with saved data takes just a few keystrokes.
No matter what your personal situation, if you are not comfortable preparing your own tax return, by all means hire a reputable company or individual to prepare your return. Any cost to you for preparation of taxes will be deductible in the following year.
If you do choose to have someone else prepare your return, make sure you have retained copies of all documents that you are providing to them. Anything can happen, and it is always prudent to ensure that you can provide the IRS with copies of items they may request in the future. When the preparer has completed the forms, he or she will generally want to go over them with you before you sign. This is an important step in the process which will protect both you and the preparer.
Whether or not you prepare your returns yourself or hire someone else, you should always save copies of your return and all the documents that have been filed with it, and keep them all together in a safe place. It is recommended that at least seven years of tax returns be kept at all times, just in case you need them in the future for credit or IRS purposes.