When tax time rolls around, most people dread the task of sitting down to fill out their tax forms by the deadline. Some people still labor over paper forms, using a pencil, calculator and tax form instructions. Tax preparation software, whether bought online or purchased in-store, can make the task of doing your taxes easier and relieve the headaches involved in tax preparation. A third option is to bundle up all of your financial records for the year and taking them to a tax preparation service. Each method has its advantages and disadvantages, most of them involving time, money and labor. Whichever method you choose, the task will be easier if you keep accurate and well-organized records.
The major benefit of doing your own taxes is to save money on the costs of a tax preparation service. Be ready to commit adequate time to the job; don't do it at the last minute. Be prepared with well-organized financial records, and take advantage of all the help available from the IRS on their website or by ordering free forms and publications from them that are specific to your tax situation.
One disadvantage to doing your own taxes is that you could miss out on the many benefits that tax laws allow. Another disadvantage is that you'd be on your own with no one to advise you or represent you if you are audited.
Tax preparation services vary widely. If you decide to use a service, be sure to do some research before choosing a company. Look for a company that has been in the business for a long time and has a solid reputation with well-trained employees.
A major advantage of using a service is their thorough knowledge of tax laws. Tax laws are complicated and change every year. Some benefits may affect only a single tax year, and if you don't know about them, then obviously, you can't benefit from them. The preparer's knowledge of current tax laws, deductions and credits may get you a much larger tax return, and that could easily take care of the cost of having your taxes professionally prepared and still leave you with extra cash.