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Tax software, DIY or accountant: Which one’s best for you?

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As a taxpayer, the single most important decision to make is how to file your income tax returns. While not everyone wants to do their taxes due to busy and active lifestyles, there are those who choose to do it themselves because they want to be in control of their finances and don’t want others to do it for them

As a taxpayer, the single most important decision to make is how to file your income tax returns. While not everyone wants to do their taxes due to busy and active lifestyles, there are those who choose to do it themselves because they want to be in control of their finances and don’t want others to do it for them. Whether you engage the help of professionals for preparation and filing of your income taxes, it is important to note that you have options. You don’t have to do it yourself if you don’t want to and if you do, several self-guided DIY software are available for you to choose from. Select one that is right for you.

Should you decide to do it yourself, you will find online solutions helpful. Refer to a professional tax software comparison for the best cloud-based products which offer efficient systems allowing users to continue working even if you don’t have your computer with you. Information can be accessed online anywhere with internet connection and is simple and very user-friendly though some taxpayers are wary about using them due to the cost involved. Using a tax software is ideal if you have simple finances specifically your sources of income, investments ̄͢and deductions like if you are a single filer having your workplace 401(k) and apartment rental as your only investment.

The majority of tax software are designed for individuals with simpler finances however if you run your own business whether on a full-time or part time basis it is prudent to consult with a tax professional. Despite the speed and simplicity of said software, it cannot ask you important questions on your specific situation like capital gains and losses the way a tax accountant or tax preparer can. These experts could provide the appropriate guidance about how to reduce taxes on your capital gains including tax-friendly ways to save for your children’s education and also if you inherited a property or bought a home.

On the other hand, there is no shame in hiring a tax pro to get the preparation and filing done for you. Errors in filing forms can be minimized by availing the services of experts. In 2016, close to 132 million returns were filed using a tax software — about 79 million of which were computer-prepared, completed and e-filed by tax professionals. This comes as no surprise because engaging specialists is a practical alternative as it saves you time and money. One thing you should watch out for are scammers. Be responsible, do due diligence and check references as you would when you are about to hire a new employee. Ask for recommendations from family and friends.

Generally, filing of returns is due on April 15th so it means that the most reputable professionals will be extremely busy during this season. Considering that President Trump recently signed into effect the new Income Tax Law with new brackets and deductions for 2018, you might want to consider contacting a specialist and booking an early appointment with them.

Not ready for the IRS?

Signing on your tax return forms make you accountable for all the information indicated on the documents. This means you’ll need to answer all questions raised by the IRS even years after you’ve filed the returns whereas if you hire a tax pro, they can be your point person and with a power of attorney may represent you when dealing with an IRS audit related inquiry.

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