Filing your taxes each year is like running a race with hurdles and hoops to jump over and through with no clear idea of what prize will await at the end of the race. Sure it may be fun for some, but if you are like most people, it is a dreaded affair. At least there is the hope of a positive lump sum of money when you are done.
Doing your own taxes is much cheaper than going to a CPA and is probably worth the effort on your part should you not have a very complex return. When should you fork out the money and get help from a CPA?
1. You have inherited a large sum of money. There is a complex set of rules that your CPA will know about when you receive a large gift or amount of money. It’s best to trust their advice in this situation.
2. You are starting a small business. This is highly recommended when you start; then, if you feel comfortable, you can do your own taxes in the years to come. You want to get as much money as possible and flying solo when starting out is risky.
While getting your taxes done by a professional has gotten cheaper over the years, it still is not fun paying someone before the possibility of paying more back to the state and federal governments. You will find that it may include a little painful stretching as you venture to do your own taxes this year, but it will be cheaper, and you will feel satisfied with the new skills you have learned.
The most common concern with doing your own taxes is that you will not get as much back from Uncle Sam than if you went through someone like TurboTax software packages range from the simple filer for free to someone that owns a corporation. Even so, it will be cheaper than having a professional do it for you. The good thing about TurboTax is that it makes it simple enough for the amateur.
Even though the price is cheap and the process is simple, there are a couple things outside of TurboTax to remember.
1. Keep track of all of your employers, investments, retirement accounts, charitable donations, and other income before you start. This will help you not miss out on potential returns and will help you miss out on penalties.
2. Organize. The better you keep things together, the easier the process will be. After you have written down a list of all accounts and income, follow up with employers or fund managers that you have not received anything from. Once things are put together it involves following easy steps that TurboTax provides.
About the author: Gunter Jameson writes about minimalism, pell grants, and anything else that interests him.
- File Your 2011 Taxes Online (goarticles.com)
- TurboTax Presents Overlooked Tax Deductions (2010tax.org)