I think it’s such good idea that I’m willing to make this bold statement: I think that everyone should do their own taxes at least once.
Why Should You Do It Yourself Taxes with a Home Tax Software?
Let me clarify that there are some of you who should continue to use an accountant. Hey, I’ll be honest that I’m not sure if I’m going to do the taxes myself this year. I’ve changed jobs, sold a home overseas, and other such potentially complicated transactions. Some of you have very, very complicated taxes, and the idea of doing your own is torturous. I get that.
However, the principle of this post should apply to almost everyone. Most of our lives are very similar year in and year out. This makes tax preparation easier.
1. What you learn by doing it yourself with taxes is the most valuable part of the process.
Each year when I prepare my own taxes, I come across a situation that I need to research a little more. I wonder – is this deductible?
It’s important that YOU know what is deductible and what is not deductible on your taxes. You see, when you drop off all your paperwork with an accountant, he may know what you don’t know. Perhaps you’ve always invested in Roth IRAs and never traditional IRAs. However, in the process of doing your taxes you’ll realize that there is a DRAMATIC difference in how these types of IRAs are treated by the IRS. The sooner you discover what’s best for you, the sooner you can start making adjustments in this current year.
I always learn more whenever I’m the person doing the work. Our minds remember what we do more than what we observe.
2. By doing your own taxes, you’ll have the necessary motivation to keep better tax records.
The IRS is kind of funny because they actually want proof of purchases and expenditures. Too often people buy eligible tax deductible items, but neglect to keep the proper paperwork. As you go through your own taxes, you’ll recognize the areas where you haven’t kept the best records.
3. When you do your own taxes you are more likely to be aware of the need for year-end tax planning.
Look, I don’t think a tax deduction is the primary motive to give, but if I’m going to give to an organization I want to be sure to do it in a way that helps me avoid as many taxes as possible. At the end of the year, you’ll be able to use the knowledge you’ve gained from doing taxes in the past to help you make sure you’re maximizing all of your year end deduction opportunities.
4. You can get your tax return faster.
When you do it yourself you can get your taxes completed faster. Also, if you can file online, your tax refund will be in your bank account much faster.
The Best of Both Worlds: An Accountant and a Home Tax Software
I know what you’re thinking. Taxes are so complicated.
Why not at least try doing taxes yourself? At most, you’ll spend an extra $75 to buy software. Then when you submit your paperwork to an accountant you can see how your results compare to his or hers. If I remember correctly, TurboTax even allows you to complete your taxes for free (online), and you only pay when you actually file. If your accountant does your taxes, why not have a go at your own taxes to see what you’ll learn along the way?
At home tax options:
- Turbo Tax – I’ve used them for the last decade. Recently, I’ve just been using their online tax program. I no longer purchase and download the program onto my own computer.
- H & R Block - Two years ago, I almost tried H & R Block because they had a really good promotion, but in the end I stuck with old faithful – TurboTax.
If your life is consistent year after year, then you should be able to do your own taxes with a minimal time investment. Each time you do your taxes, you’ll get better at it and the opportunity for savings grows.