I mentioned earlier that I am forgoing all the free federal and state tax filing software options and paying an accountant this year. A reader asked why. That’s a good question, here’s what I (as a non-tax pro) think the decision process should look like:
Do I even want to deal with it?
Some people just think about taxes and feel queasy. It’ll cost at least $100 to pay a person to do it for you, but it’ll get done. Or maybe you feel your time is worth enough that it’s cheaper to just outsource it.
Try doing it online yourself for free first
Most online tax websites only make you pay for your return at the very end, when you want to print or e-file. So you can go through the entire process and even figure out your refund without paying a dime. I used to run my taxes both with TaxCut and TurboTax online just to make sure the final numbers were identical (they weren’t once!). Usually they ask enough questions to tease out any concerns you might have. If you find yourself unsure of something, maybe it’s time to do some more reading or pay for an accountant.
The side benefit to doing this is that it makes you get all your records and papers in order. This will save your accountant time, and thus save you some money!
Taxes Too Complicated?
If your taxes are easy (you don’t itemize), I bet that any software will ask the same questions as the people at your local H&R Block. But in my case, I formed an corporation for my business this year, and with the payroll issues, qualified expenses, and deductions there is no free online version I could try for free. I could buy a copy of the beefier TaxCut Business that handles corporations, but it’s very possible that I’d still miss something.
Therefore, I want my records to be examined at least once by a professional who’s familiar with similar small businesses – an independent accountant, not a chain. If I’m lucky, I will find someone that adds value and maybe even form a long-term relationship. If not, at the very least I’ll have the finished return to act as a template for next year’s taxes.
By Jonathan Ping | Taxes | 1/29/07, 12:33am