Can you believe it’s February already? Before you know it, it will be April and you’ll be scrambling to meet the income tax filing deadline.
That’s why there’s no time like the present to get ready for tax season. The IRS is already accepting individual electronic tax returns, so why not go ahead and file your return and mark that chore done for the year?
If you haven’t already received tax forms from your employer and your mortgage company, those documents should show up in the mail, or by email, any day. Don’t forget to gather other documentation like childcare and medical expense receipts.
As you plan to file your taxes, you’ll also need to decide if you’ll do your own taxes or hire a tax professional this year.
Here are a couple of scenarios to help you figure out which could work for you.
When it makes sense to use tax software
Seeking out a professional’s assistance on important financial matters is generally a wise choice.
But there are instances where online tax preparation services can be a practical choice. For example, single people who have one source of earned income and don’t own any property probably won’t need a tax pro to find hidden credits or deductions.
If you fall into that category and plan to take the standard income tax deduction, online tax prep sites do a good job of walking you through that process.
However, you’ll still need to schedule plenty of time to gather your paperwork and fill out your forms. Depending on the value you place on your time, the potential savings may not be enough to justify the time it will take to tackle all those tasks on your own.
When it makes sense to use a tax pro
The IRS is in charge of income taxes, so it shouldn’t surprise you that your taxes could go from simple to complicated in the blink of an eye. You could be eligible for a slew of additional deductions and credits when:
- You’re married
- You have kids
- You plan to itemize your deductions
- You own a small business
- You make donations to churches or charities
- You have multiple sources of income
- You don’t have time to devote to filling out your forms
Unfortunately, many taxpayers miss out on important deductions by choosing the quicker, easier option of taking the standard deduction instead of itemizing their tax returns.
According to the U.S. Government Accountability Office, those taxpayers may overpay their taxes by nearly $1 billion each year.
With that kind of money at stake, it’s clear that a tax professional’s ability to spot deductions and credits you qualify for can more than pay for their services.
Plus, a tax expert’s advice is worth the extra expense for simple peace of mind. You won’t have to worry that you marked the wrong box or made an incorrect calculation. That means less stress for you at tax time.
Making the call
Here’s what we’re saying: Tax software can be an inexpensive, convenient option in the right situation. But to make sure you’re getting every deduction you deserve while lowering your stress level during tax season, a tax pro is the way to go.
Of course, it’s important to work with an experienced, licensed tax professional – a true tax expert. So go ahead and take the first step to getting your taxes done right this year.
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