Spring is in the air. Time to plant some azaleas, purge your closet and tackle some overdue home improvement projects. But while painting the basement can be fun even if you make a bit of a mess, one spring project you don’t want to make a mess of is your taxes. That doesn’t necessarily mean you shouldn’t do it yourself, but it does mean it’s important to examine your situation and figure out if you’re set to DIY your 1040 or if your taxes might be better off in the hands of a qualified professional. If you’re thinking about adding taxes to your spring project list, consider these pros and cons first.
When to Consider DIY
A DIY approach to filing your taxes may work for you if your returns are fairly simple and you’re willing to invest the time needed to prepare and file the required documentation. With a single income source, straightforward or minimal investments and relatively few deductions, DIYing your taxes can be a viable option for some. But to successfully go it alone, you’ll need a certain degree of know-how as well as accurate and complete records of things like income and deductible expenses.
If you feel comfortable doing your own taxes, it’s possible to file for free if your adjusted gross income is $79,000 or less for the year. The best place to find no-cost filing options is from the IRS. Their website has a list of vetted online resources that enable you to prepare and file your federal return at no charge. Many of these sites even have a troubleshooting guide to assist you if you get stuck.
While the upside of a DIY return is a free file, be sure to review your paperwork carefully. Without the expertise of a tax professional, you may miss write-offs you don’t know about. And even an innocent mistake could trigger an audit, or costly penalties.
When to Hire a Pro
Whether or not your taxes are best left in the hands of a professional depends on your financial situation, your level of comfort with doing taxes and the time you have to file. Generally, more complex taxes are better left to the pros — when they involve things like multiple income sources or major asset sales. Your investments can complicate your taxes, too. Significant amounts of atypical assets such as foreign holdings, for example, may indicate you should hire a professional. Also consider a pro if you have a lot of itemized deductions, like expenses for a home business or significant medical costs.
It’s not just the convenience that makes it a good decision to let tax professionals take care of a complex filing: it can also be about the bottom line. A professional may be able to help you find more write-offs and lower your bill, as well as keep you from missing important information. If you’re worried about a potential audit, some tax professionals may even be able to represent you if you face the IRS.
The Early Bird Gets the Return
Whether you should hire a professional to prepare your return is a personal choice. But if you do attempt the DIY route, definitely don’t wait until the last minute to file. Just like during a home renovation, once you open up the walls, sometimes you uncover a surprise you need a pro to come in and fix. If you start to do your own return only to discover it’s a bit more complicated than you thought, you can always reach out to a tax professional or your local IRS Taxpayer Assistance Center with questions — as long as you’ve put enough time on your side.
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