Should You Do Your Own Taxes? 5 Questions to Ask

Unless you have a simple and straightforward tax return, consider hiring a pro.
By Sarah Heikkinen, Contributing Writer
Working at Home

Ah, tax season. It's that magical time of year when we scramble to find our receipts and collect our W-2s, then pray that we haven't forgotten anything important before we send in our tax returns.

No matter how simple or complex your tax filing may be this year, it's easy to get overwhelmed once you ask yourself the big question: should you do your own taxes or hire a professional to do them for you?

Since both options have pros and cons, there isn't a quick-and-easy answer to that question. You have to think about what's going to be easiest for you in the long run, and we're here to help you figure that out. Read on for a list of questions to ask yourself before starting your taxes.

Is Your Tax Return Going to Be Simple or Complex?

This question may seem vague, and maybe you don't know the difference between simple and complex tax returns yet, but that's okay. Here's how to break that down.

SEE ALSO: All the FREE Ways to File Your Taxes Online

If you have no dependents (children, relatives, etc.), investments, or itemized deductions, and you don't own your own business, you'll likely have a simple return. If you do have any of those things or are a business owner, your return will most likely be complex.

We recommend consulting a professional tax accountant if you think your return is going to be complex, just to be safe. But if you think your taxes will be on the simpler side this year, it may be worth filing on your own.

How Much Are You Willing to Spend?

Regardless of what choice you make, the good news is that you probably won't have to shell out too much cash to get your taxes filed. However, it's important to consider the cost of both independently filing and hiring a professional to file for you.

Most online tax software, like TurboTax or H&R Block, will give you the option to file at no cost if your tax return is simple. Plus, the IRS's Free File program features a variety of online software products that will guide you through filing your taxes for free.

If your tax return is simple or your income is below $66,000, you can find tons of free tax software online.

If you have to file a return that's going to be a little more complicated, and you're going to do it yourself, you could end up paying anywhere from $40 to $125, based on the complexity of your return. For example, H&R Block has four different tax software products: Basic (for simple tax needs), Deluxe (best for homeowners and investors), Premium (good if you're self-employed), and Premium & Business (recommended for small business owners).

On the other hand, if you decide to let a pro take the reins, you should be prepared to pay a little more for the extra work that'll be put into your taxes. Tax accountants can charge an average of $176 to $457 for their tax prep services, depending on how complicated your return ends up being.

What Do You Know About Tax Laws?

While you don't need to be a tax expert to file your own taxes, it's still important to have at least a basic understanding of current laws before you get started. The new tax laws put into place by the passage of the Tax Cuts and Jobs Act in December 2017 are particularly complex, but those won't affect your taxes until next year. You should still make sure you have an idea of what you're getting into if you decide to file on your own this year. If you'd rather avoid the headache, hire a professional.

Do You Have the Patience to Do Your Own Taxes?

Filing taxes is a tedious task, whether you're doing it alone or outsourcing the work to a tax accountant. You're going to need to make sure you have all the necessary forms — you should already have received most of them — to properly fill out your return. Organizing and understanding all of that information can be difficult if you're not used to doing it every day.

SEE ALSO: How to Make Sure You Don't Owe on Your Taxes Next Year

Are You Prepared to Deal With the IRS?

The scariest part about filing taxes is the possibility that the IRS will come to you with any questions they have or problems they may find in your return. If you file on your own, you're signing up to be responsible for every last bit of information you include in your return. If someone else does your taxes, you can tell the IRS to direct any questions about your filing to your tax preparer.

The bottom line is that regardless of what decision you make this tax season, you have to make sure that you are comfortable with what you're doing. If you're confident in your patience, organization, and understanding of your personal assets, it wouldn't hurt to file on your own. But if you're even a little hesitant about your ability to responsibly do it yourself, you might want to consider consulting a professional.

Readers, what are you doing this tax season? Are you going it alone or hiring a pro? Tell us why in the comments below!

DealNews may be compensated by companies mentioned in this article. Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).
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