The first 3 months of the year is tax season and by this time, you may already be preparing to talk to your accountant and discuss your tax returns due in April. Before you pick up the phone and write a check for your accountant’s fees, discover the top 11 reasons why you should do your own taxes.
- Saves you money. Accountants charge at least $200 to their clients. This means that every time you do your own taxes you get to save that much. It seems counterproductive to hire an accountant because you assume he will magically be able to reduce your taxes only for you to pay him a fee in the end. Depending on your financial profile or situation, TurboTax, a software that can automate filing for you, offers its services for free. You will only have to pay a fee when your return requires advanced and specific forms to file.
- Saves you time. Your accountant will most probably ask you to search then organize your receipts, bank statements and other financial documents. Then, he will ask to meet with you on a scheduled appointment. You get your car, meet with him and spend at least an hour during the meeting. You leave and he will certainly call and ask you additional questions. You go back and get the documents and pay his professional fees. You get to cut a lot of the above steps, such as travel to and from the accountant’s office and long meetings when you do your own taxes. Again, TurboTax can provide you with a do-it-yourself tax software that will allow you to do your own taxes at the comforts of your home and during your most convenient time.
- Archive previous returns. Unless you experienced a major financial breakthrough in the current year, your numbers, tax codes, brackets and other financial information will relatively be the same as with the previous financial year. This means that you may require minimal changes or adjustment for this year’s return. TurboTax has a function that makes archiving your previous returns much easier to access than having to locate last year’s physical documents that may have already been misplaced.
- Avoids audits. Accountants are measured today not only on their fees and promptness, but also on their ability to provide you with the highest refund possible. This reason makes accountants more pressured to skirt around strict tax codes to ensure that their clients remain faithful to them. However, the risk in their strategy is the more refund you get, the higher the probability that you will be randomly selected for audit. Audit becomes more possible when your refunds are far above your usual average amount. Most people will prefer an average refund over a full-blown audit.
- Gives you privacy. The moment you share your financial information with others and bring your documents outside your home, you may be exposing yourself to several security risks such as identity theft, fraud and other dangers to your finances. Doing your own taxes only gives you more privacy, especially on your financial documents.
- Avoids accountant shopping. You spend considerable time and effort inlooking for the perfect accountant for you. You may look for one through online profiles, friends’ recommendations or visiting an accounting firm. You want an accountant, who is objective, looks after your interest, focuses solely on you and delivers early so you do not have to pressured by deadlines for submission. Most probably, you will never find this perfect accountant, but you will find all these characteristics of a tax filing software, such as TurboTax.
- Gets you organized. You get to appreciate the importance of keeping your financial documents organized. When you are rewarded with the ease with which you filed your returns, you are motivated to be more mindful on your future tax filings. Plus, with all your documents under your roof, you reduce the risk of them getting misplaced outside the home. The last thing you want is your accountant telling you that he lost your receipts.
- Learn as you go. As adults, we no longer have the luxury of the brainpower we once had as children. We learn better when we actually do it ourselves and when we practice, we can gain mastery over a task. By doing your own taxes, you are able to significantly shorten the learning curve.
- Protect yourself. Chances are, you are only one of the many clients that your accountant is working on, especially during tax season. The more clients your accountant has, the bigger the possibility for error and a wider margin for miscalculation. The only person who can truly look after your finances and interests is you. By doing your own taxes, you can remain sharp and focused during the duration of your computations.
- Gain awareness. The more hands-on you become on your returns, the better you can see both the big picture and the small details of your finances. If you ask an accountant to do your taxes for you, you only get the bottomline figure. You lose the opportunity to see patterns and trends that may predict your financial situation next year. If you do your taxes yourself, you get to see how one expense item here affects the taxable bracket there or how minimizing a figure here can maximize the benefits there. With more awareness, you are better prepared to monitor your financial transactions for the next financial year. You gain a consciousness that can guide you on next year’s financial decisions that you have to make.
- Gratifies you immediately. The suspense of whether you have a small or big refund, or worse a payable amount is removed when you do your own taxes. Instead of waiting for your accountant to give you his report and either experience disappointment or anger when he does not produce the figures you expected, you get the result immediately. In fact, filing tax thru on-line like TurboTax allows you to automatically file the return once you have generated it. You then will receive an email notifying of its receipt and you are done for the day. No lines, no travel and no extra costs.
Doing your own taxes may seem daunting at first, but with the many benefits gained from it, you may consider giving it a shot. Be confident, not only are you the best person to know your personal finances, but also tax returns software, like TurboTax, is already available and ready to help you in crunching the numbers.