- October 21, 2022
- Posted by: Smith & Smith
- Category: Tax Preparation Service
Taxes can be filed either by yourself or by hiring a tax professional to do it for you. If you are planning to file taxes on your own, you should be ready to spend a significant amount of time. You should also have the patience to do it. Even if it is expensive, hiring a tax professional is best since you do not have to bother about the procedures involved. If you have a large number of assets or multiple sources of income, then hiring a tax professional is the right way forward.
Filing Taxes On Your Own
- Filing taxes need undivided attention, and seven hours are required for spending on gathering forms and preparing the tax return. For business owners, it could take more than 20 hours for tax planning and management.
- You can file your taxes if you have a straightforward tax situation, no dependents, no significant assets or contributions to charitable organizations, and no other investments except retirement accounts.
- You are a self-employed person who owns a business and is comfortable working on business-related tax forms. The need for tax planning on your own is also ideal for self-employed people who want to save the money they otherwise spend on an accountant.
- If you want greater control over your money and don’t feel worried about fixing the errors, you can file the taxes independently.
Choosing A Tax Professional For Filing The Taxes
- Choose a tax professional if you need more time and patience to file taxes. It’s better to take help from an expert rather than make a mistake while filing the taxes.
- Hiring a tax professional who has expertise in corporate tax planning and management would be desirable if you have a complicated tax situation wherein you have a lot of investments, significant assets, charitable contributions, or you own a business, etc.
- Hiring a tax professional will be the best option if you plan to itemize your deductions. You can save money by itemizing the deductions, such as incurring substantial medical costs, making large charitable donations, etc. To do it yourself can be tricky, especially if you are doing it for the first time.
- If you have undergone significant changes the previous year, like buying a new house, etc., that could impact your tax filing. A tax professional may manage all such filing responsibilities for you through proper tax wealth management.
- If you are not confident about entering the numbers about deductions, then it is better to leave it to a tax professional who will take care of all those aspects.
6 Tips To Keep In Mind For First-Time Tax Filers
- You should keep an eye on your income since you may have to file a tax return if you surpass certain income levels. Remember to add the income you might be earning from multiple jobs or additional sources of income that you are making from the rental property or anything you sell.
- Always keep receipt of significant work-related expenses, medical bills, charitable donations, etc. Statements of investments, grants, fellowships, and student loans should also be kept with you to help determine whether to itemize and make the process easier.
- You should also consider your income documents, such as Form W-2, which details your earnings as a full-time employee, and Form 1099-NEC. If you are a freelance employee or on a contract, the documents for interest earned will be shown in Forms 1099-DIV or 1099-INT. The student loan interest you have paid will be available in Form 1098-E, and as a college student will be Form 1098-T.
- Some of the credits and deductions you can consider include saver’s credit, student loan interest, charitable deductions, freelance expenses, etc.
- The tax filing should be performed as early as possible. You get tax documents in January and February, which gives you two months to prepare for the tax returns.
There are various ways in which you can file your tax returns. You can make use of free tax preparation software by the IRS. Tax preparation software and IRS online forms can also be used to file tax returns. Lastly, you can get help from an expert tax preparation firm or an accountant to do the tax filing for you. For more information on tax planning advice, consult the best tax planning and management company.