Taxes: Hire a pro or do it yourself?
It’s decision time, taxpayers, said Kay Bell in USAToday.com. Should you do your own tax return or hire a professional? The answer, of course, depends on the complexity of your financial life. “If you’re a single filer who rents an apartment and your workplace 401(k) is your only investment, tax software should work fine.” Most tax software can be purchased for less than $100, while the average tax preparer charges $273 to complete a Form 1040 with itemized deductions, plus a state return. If your adjusted gross income is less than $64,000, you can even use free software through the IRS’s Free File program. “But if you run your own business, either as your main job or on the side; buy a home; or inherit property, it’s probably a good time to get some personal tax advice and guidance.”
Many people still prefer the human touch of a professional tax preparer, but it will cost you, said Suzanne Woolley in Bloomberg.com. Despite the wide availability of online tax prep software, brick-and-mortar tax businesses still prepare about 57 percent of individual tax returns, down just 3 percentage points from seven years ago. And fees have been rising “steadily.” Tax preparers hiked their fees by an average of 6 percent last year, according to the National Society of Accountants, and they plan to raise them by another 6 percent for the 2017 filing season. If you do go the professional route, be sure to check that whoever you hire at least has an IRS Preparer Tax Identification Number, or PTIN, on the IRS website. For added peace of mind, look for a bean counter with additional credentials. “The IRS has a database of tax professionals, including CPAs, attorneys, and enrolled agents.”
Free tax help is available for some taxpayers, said Ann Carrns in The New York Times. “The IRS Volunteer Income Tax Assistance program offers help from trained volunteers for people who generally make $54,000 or less. Another federal program offers help to taxpayers over 60.” You can find details about both programs on IRS.gov. “It’s easy to put off the tedious annual chore” of preparing your returns when the deadline is still months away, said Beth Braverman in TheFiscalTimes.com. But the time to get started is now, whether you’re seeking professional help or not. The IRS estimates that it takes most taxpayers about 16 hours to work through a Form 1040, including the time it takes to organize the necessary paperwork. “Experienced tax professionals only get busier as the tax deadline approaches, and some even stop taking new clients within a few weeks of Tax Day.”