Should I Use an Accountant to File my Taxes?

by M.E. Hansen, All rights reserved. Do not duplicate without permission

Tax Software or Online Tax Preparation is easier and cheaper than ever before. However, that doesn't mean you should use it.

All of the technological sophistication in the world will not compensate for taxpayers who don't know what they're doing. The best programs can guide you through a relatively straightforward return, but there are many instances where a professional tax preparer is a much better choice.

If any of the following apply to your situation, strongly consider hiring a tax preparer :

You don't follow instructions well.

A friend recently asked my wife which schedule she should use to write off as business expenses her commuting costs (to and from work). When told she couldn't do that, that it was not a matter of whether to use Schedule C or Schedule A, she insisted she'd been writing off these expenses for years.

This friend had been steadfastly ignoring all the "help" boxes in her tax software that could have explained that she was making a mistake. A tax preparer could have made the issue clear in about two minutes. A good tax preparer would not have signed off on her tax return had she insisted on deducting nondeductible expenses.

You need to be told what to do.

Using tax software requires you to be inquisitive and willing to sort through all the advice provided, to find what applies to you. This makes preparing many tax returns time-consuming, and you can still not get all the information you need.

Some people just don't want to go to the effort. If you've got anything more complicated than a 1040EZ or 1040A, you can expect to spend several hours researching tax law and typing in data on your own. It's much easier to spend 30 minutes to an hour with a tax preparer and let him or her do the work.

After many years of checking out differant tax software packages and uncountable hours of professional tax training, I have never gotten through a complete return on any program without encountering numerous areas on some point of tax law not adequately described in the software's help package.

Personally, I use a glorified tax calculator and form printing software. All information must be entered on the proper forms and in the correct places. This software does not try to do my thinking for me and would not be appropriate for most people.

You don't bother to keep up with the latest in tax law.

Just because you understood what the rules were last year doesn't mean you can file a correct return this year. Every year congress passes new laws, the IRS cames out with new rulings and judges make decisions that affect your tax situation. Your daily newspaper will cover developments that concern a large number of people, but they don't report on every change. Professional Tax Preparers and Enrolled Agents subscribe to newsletters and alert services and take continuing education courses to stay up to date. We live, eat, and breathe this stuff 24/7, whereas the rest of you have lives to lead.

Next Page: More Reasons you May Consider Hiring a Tax Professional