Believe it or not, there once was a time when preparing and filing your own tax return wasn’t that difficult. But over time, the tax law has grown and become more complicated, leading many Americans to seek help on tax matters. Here are some instances when you might benefit from hiring a tax professional:
- You’re not familiar with tax law. According to the U.S. Treasury Inspector General for Tax Administration, in 2007 Americans forfeited some $4 billion in phone tax refunds, in part because they didn’t know the refund existed. Tax professionals are up to date on current laws, and often find deductions that can offset the cost of paying to have your taxes prepared.
- Your taxes are complicated. Have you moved out of state recently? Do you own your own business? Buy and sell investments? The more complex your taxes, the more paperwork that’s required, and the more likely it is that a tax professional would be a worthwhile investment.
- You have better things to do. The IRS estimates it takes an average taxpayer 13 hours to complete a tax return. If your time is worth $10 an hour, that $130 could help pay for someone else to do your taxes.
- You want help in an audit. If you’re audited, most tax preparers will represent you if they prepared your return.
- You want a quick return. Tax professionals usually file returns electronically rather than by mail; that means if you’re due a refund, it will arrive sooner and can be deposited directly into your bank account.
If your taxes are relatively simple, or if you enjoy preparing your own return and feel capable of completing it, then go for it. But the more of these categories that apply to you, the more you’ll want to consider hiring a professional.