Thursday, 4 February 2010 10:24
It seems that tax forms get more complicated and frustrating with each passing year. If you complete your own tax forms, you may have given thought to finding a better way. Perhaps you should hire a professional to handle your taxes, or possibly purchase tax-preparation software.
Hire a pro.
One advantage of hiring someone to do your taxes for you is obvious: they get to sweat over the forms instead of you. The biggest disadvantage is the cost. Hiring a tax preparer is probably your best choice if your tax situation is complicated or you simply believe that you cannot prepare your own taxes.
You can turn to a local tax preparation service, but because the government doesn’t regulate them, it’s hard to tell how much experience or expertise their employees have. Or, you can choose one of the three types of licensed tax preparers, all of whom can represent you if your return is audited by the IRS. Enrolled agents are either former IRS agents or individuals who have passed a tough federal examination. Certified Public Accountants (CPAs) have passed a difficult state examination and can offer additional financial expertise. Tax attorneys, the third choice, are usually best for people who have complicated tax shelters.
Software such as TurboTax allows you to prepare your return on your computer. By asking a series of questions, the software determines which forms you should file and requests all the right information. If you’re confident with the accuracy of your information, this may be the right approach for you. But if your information is incorrect or incomplete, your return will be, too.
If your tax return is usually fairly simple and straightforward (for example, you’re single and don’t own a house), consider one of the free filing services available online through the IRS website, www.irs.gov. When you file electronically, the IRS can process your return more quickly, so you should receive any refund faster. (Taxpayers who do not qualify for the free filing services can take advantage of other inexpensive online filing options.)