Last week was April 15th, the deadline for filing your taxes, the GlobalTax team expects you could filed without major inconveniences. But, if you haven’t filed your taxes, don’t worry, you are still in time to file, but you will have to assume the payment of penalties for not filing and/or not paying on time.
If you are always aware of your taxes, you are probably a person who has paid a tax professional – be it a CPA, a lawyer or an enrolled agent – to file your tax return year after year.
However, you may have a concern because many of your friends and acquaintances use some software to calculate their taxes, an online product or an app, and the following question arises:
Which of these options is better?
There is no decisive answer, because there are different types of Taxpayers with different conditions that makes them unique. Choosing the method for calculating and filing taxes will depend on the situation that best suits your circumstances.
However, keep in mind that ignorance and lack of experience in tax matters is something that sooner or later takes its toll, always being the best decision to hire qualified and professional tax preparers.
Next, we share with you some important factors to help you make the right choice.
The complexity of your tax situation
The more complex your tax situation is, the more convenient it will be for you to hire a tax professional. What makes your tax situation complex? Pay attention to the following options, which can help you decide for a specialist:
- You own a business
This is because there are more complex tax rules and different tax-related choices that you will want to discuss with a professional. For example, if your business bought equipment, you will have different ways to assess its cost; the best way to do it will depend (in accounting and tax matters, it always depends) on your current tax situation, as well as on your future projections.
Of course you can use tax software in complex situations, but you will not have the expertise and experience that a good tax preparer always gives you, with extensive knowledge in the field.
- Had a major event in your life
For example, if you sold a business, went through a divorce process, sold your home or had any other major change in your life, a tax preparation specialist will advise you on the laws and regulations applicables to your situation.
- You were busy on the stock market
Tax preparation software sometimes has options to fill out form 1099-B, which reports transactions in the stock market.
However, the safest thing is that you will need to work closely with a tax specialist to ensure that you have all the necessary information to file your taxes properly.
- You want to itemize
Again, the tax preparation software allows you to input all the information, but an expert in tax matters will advise you on the legitimate deductible expenses, and will provide you with all the background you need to optimize your deductions and avoid problems with the IRS.
Your knowledge in taxes
Lots of people don’t like anything related with numbers, taxes and in general, everything that involves taxes seems terrifying. However, for others, taxes have become a routine activity that must be done every year.
If you are like the second type of person, and you have done your taxes year after year, without many changes in your financial or personal situation, then most likely you are perfectly capable of handling your taxes.
In this case, you just have to familiarize yourself with all the changes that the tax reform Tax Cuts and Jobs Act brought to the table.
For example, the standard deduction basically doubled, personal exemptions disappeared, and there were major changes in the way mortgage interests and state and local taxes are handled.
Also, keep in mind that you still have to file what you received for health insurance according to the Affordable Care Act.
Also, keep in mind that for the 2018 fiscal year there is a new 1040 form, with the 1040EZ and 1040A forms disappearing.
If you have never done your tax return, it is time to think if you really ready for the challenge.
The cost of tax preparation services can influence your choice. According to the National Society of Accountants, the average fees from 2017 to make a tax return that do not include the itemized deduction is USD $ 159, or USD $ 273 when it includes these deductions.
The fees can be higher or lower, depending on the state where you live.
You can file yourself for very little or no cost. If your Adjusted Gross Income (AGI) is less than $60,000, you can use the free IRS service to prepare your taxes online and send it at no cost.
If your AGI is higher, then you can buy some software or use an online solution. The prices for federal tax returns start at approximately $20.
But, keep in mind that ignorance in taxes takes its toll. Unfortunately we have seen in our long history how people end up paying more than 3,000 dollars, because they use commercial tax preparation software, commiting many mistakes and losing deductions.
So, if you think you paid $99 for your taxes, think again, because if you didn’t received $3000 you could have or paid $3,000 more, actually you paid $3,099 for your tax preparation.
You have the final decision
Whether you decide to hire a tax preparer expert, use software or the online services of a web page, remember the points mentioned above and examine yourself to see if you are ready for the tax challenge.
If you decide to use a tax preparation software, first research about the program, as well as the latest updates of the tax laws.
If you opt for a tax expert, be sure to find someone reliable that meets all your needs and make the most of all the deductions.
In GlobalTax, we will solve all your doubts, will assume your case with all the professionalism that you deserve, reducing to the maximum your tax burden, so that you enjoy life without the complications tax season produces.