Filing Taxes: Should I Do It Myself or Hire a CPA?Feb 28, 2019 | 0 Votes by Justo - rate Everyone knows there are two ways to do your taxes - either you do it yourself or you spend some money and hire a profession CPA to do it for you. However, the million-dollar question remains - which option would be best for you?
Doing your taxes is a must, and you should make your best effort to do them the right way. Before starting filling the infoboxes right-and-left, there are some questions you should answer to determine if you need to hire a professional to make your taxes or do them yourself with the help of some apps you can find online like TurboTax, H&R Block, and TaxAct. If you are about to embark on this task and don't want to waste time redoing your own steps, then keep reading and you will find the answer.
How much is your household income?
You need to consider how much is your combined income among the active members of your family. If your final number goes over the $200.000 mark, you should definitely hire a professional to go through your records and gather the required information to file your taxes correctly. The amount of paperwork you have to file on such income amounts increase exponentially, so if you want to do them yourself, you need to be patient.
Where does your money come from?
If the majority of your annual income comes from your employee earnings working in a nine-to-five position, you might not need to hire a professional to do your taxes. But if you are a freelancer handling a client list, or if you are an entrepreneur working on your own business, you will need to be tidier and have everything under control while considering some other items.
Do you invest or contribute to charity?
You need to consider your bank account movements and how and where do you generally spend your money in. If you have several significant investments or active assets in the present, your public profile will be different from those who have no investments. And if you contribute to charity those “transactions” can be deducted from your yearly report, so you will need some extra help from a CPA to back it up.
Did you have any life-altering event?
Our lifestyle changes every year and there are events to take into account which will alter the outcome of our revenue at the end of the year. What is a life-altering situation? Well, it could be a marriage, a new baby in the family, a new house, a new vehicle, etc. Basically, everything which represents additional incomes or outcomes in your monthly budget goes on that list, as all of this will have an impact on your tax report.
Do you have the time and patience?
You can face this task with a purpose and effectively save some considerable cash, but you will have to gather and organize all of your documents and spent up to 16 hours preparing your taxes. If you have the time and the skill to do this, it will be easy for you. For most people, this is not the case, so they instead hire a CPA to do all the heavy work.
So, to sum this all up, if your annual earnings are $54.000 or below, you should be able to do your own taxes without facing any trouble, but if most of the answers to the questions listed above are affirmative, you should look for additional help. This doesn't mean you won't have to do anything because you will still have to gather all your documents and provide them to the CPA.