With Christmas and New Year in our rear view mirror, we begin that often dull and dreary trudge to the colorful beginnings of spring. While we are on the topic of things that are dull and dreary, I thought we would talk taxes! With tax season approaching, it makes sense to take a look at the many different ways you can file your taxes to determine if you are doing what is best for you. So let’s dive in!
Digital Tax Preparation
This is a very common way to file taxes. For a price that typically ranges between $30-100 you can either download or buy a disk to install a program like TurboTax or TaxAct to your computer. Other alternatives like H&R Block’s tool allow you to simply process everything through a website. This allows you to enter your tax information and file your taxes easily from the comfort of your own home.
While this is certainly convenient, it is definitely not the best method for everyone. If your software is not up to date or you do not enter all the information, it can cause you to file incorrectly. This can mean you don’t get as much money back, or you end up owing more down the road when the IRS discovers any discrepancies. However, if you are diligent, pay close attention to the details, and your information is relatively straight forward, this method can be an effective one.
Brick and Mortar Tax Companies
This refers to those locations like an H&R Block or whatever your local tax place is that has the guy spinning a sign out front come the end of January. Many people are more comfortable with this kind of setup than with processing their own taxes at home. They involve going to sit down with an actual person to discuss your taxes and allow for some advice and knowledge from a third party who likely knows more than you do about tax law.
The problem is that this is not always the case. As these locations often need to fill seasonal positions, it can sometimes be the kind of situation where the employees are not really qualified to do the job they are in.
This route is more costly, and any place worth going to will provide a guarantee on their work if something turns out to be done incorrectly. You should expect to pay between $150-300 for this service, but with that guarantee on the work, it is likely worth it for some added peace of mind.
The DIY Method
Some people choose this method because it only costs time (and maybe an aspirin). The main problem is that tax law is a constantly changing and it puts a great deal of burden on yourself to adequately understand how to fill out everything.
A common alternative to this is for people to have a friend or relative file their taxes for them. If this is what you choose, make sure to ask yourself, “if my taxes are done incorrectly, who will be the one dealing with it?”
File With an Accountant
The best and safest way to file is through an accountant. Accountants are paid to understand tax law and be up to date on changes year-round. They do not do this on a temporary or seasonal basis, and so are generally more qualified and easier to get in contact with should any problems arise. In the event of an audit, they are the best and most helpful option. There may be a slightly higher cost, but the benefit of both knowing things will be done right, and that if there is an issue you can count on them to help you through it, is worth the cost.