Filing Taxes on Your Own Vs Using a Professional

For every important job out there, there will always be the question of whether individuals should do it themselves or engage the services of a professional. The ever-advancing nature of technology, especially in the financial market, makes this choice seem even more tasking.

Despite the availability of software that helps with filing taxes on your own, it has not put tax professionals out of business. You can get help with your taxes by visiting Tax Preparation Service.

Here we look at the two ways you can handle your tax issues and explore the benefits each one offers.

When should you consider filing taxes on your own?

There are two times when you should file your tax returns on your own. The first is when you have T4 income slip and thus claim the standard deduction. The second is when you have not experienced any change in your previous taxes.

1. When there is no change in from your prior taxes

If you have not experienced anything major in your tax situation over the year in review, referring to your work from last year with those of the year should help out. This is in a situation where it got handled the previous year.

If you did not experience any real changes in your life over the year in a review such as having a child, becoming unemployed, or getting divorced, filing taxes on your own may be the best route to take. This is more so when your budget does not allow for engaging the services of a bookkeeper.

2. When your budget doesn’t support engaging a professional

One thing about doing your taxes yourself is that it would save you some money. There are several generic tax software packages out there that offer such services free of charge. If you are to use the services of a tax expert, you may have to pay from $70 upwards. One unique thing people may not know is that there is about a billion dollars worth of income benefits left unclaimed for seniors each year.

Some reforms sought to lower the requirements and complexity involved in preparing tax returns for persons. They did this by doubling deduction standards. For instance, in the 2019 tax year (for 2020 returns) the stated standard deductions amount was $12,200 for individuals, while it was $24,400 for married people who were filling together. To overcome these high amounts, you should have a reasonable amount of charitable donations and other deductible expenses that can get itemized.

When you should consider filing taxes using a professional 

If you sold a business on the way to retirement

If you have gotten to a stage in your career when you do not want to make any silly retirement error and sell your business, you will need the services of a tax expert. Even though you should be able to prepare the forms on your own, none of the software that enables filing taxes on your own gives you support when preparing your Asset Acquisition Statement.

Due to this reason, you must go through the process of reaching a compromise of the price with the seller and grouping your assets and making sure each of the forms tally on both the seller and buyer tax returns.

When you need quick and accurate results

Quite several people often opt for the services of a tax professional to ensure speed and accuracy when filing. However, when engaging the services of a professional, you must know your requirements. For instance, are you in search of a tax preparation service or perhaps a tax counselling and advice from an expert?

If you are searching for basic mechanical processing of your tax return based on the data provided by you, you may simply engage the services of a reliable individual tax preparation service around. If you are however searching for tax advice and planning, a CPA firm might be better suited.

Engaging a tax professional would not only assist you with your taxes but also give you the needed advice for planning your finances. However, with such professionals, you can expect the rate to be quite higher especially if the tax return is quite complicated.

Bottom-line 

When it comes to choosing between doing your tax yourself or engaging the services of a professional to handle the same, it will always boil down to how complex your tax situation is. Added to the comfort level as well as the effort you are willing to apply and the cost.

For individuals who have less complex financial situations, it shouldn’t be much of a challenge filing taxes on your own. Can your situation be simple? How exactly can you know this?

Generally speaking, if getting your tax prepared involves getting data from sources such as brokerages, Bank accounts, and other related documents, you may qualify to handle your taxes. In this scenario, all you need to do is rely on the available tax software.

But if you are the type of person that finds it quite difficult handling any part of your taxes, consulting a professional may be the best route to take. Even though this route may seem more expensive than doing it yourself, it gives you peace of mind as you stand a better chance to avoid issues with the CRA.

Irrespective of the choices you make, you will want to create time to check your tax returns for the sake of accuracy. But note that while a professional handling your tax issues may guarantee you accuracy to some extent and as such would need them for your tax audits, your return is a function of the information your provide.

You must focus on the details on your return regardless of who handles it. Finally, after you must have filed your tax returns, ensure that you keep a copy along with any other relevant document in the event of facing an audit. This is regardless of whether you are filing taxes on your own or engaging the services of a tax professional.

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