Growing up, I saw my parents spend a weekend every March or April firmly planted at the kitchen table surrounded by stacks of paperwork, pencils and calculators. You see, my dad has been self-employed for most of my lifetime. And that yearly weekend of paperwork at the table was their tax preparation.
After witnessing such a thing my whole life, it did not even occur to me to ever pay someone to do my taxes. In fact, I have always done my taxes on my own – even when I have needed to file taxes for a LLC that I started and had for a while.
While I am currently self-employed, that was not always the case. In fact, there were several years during my early working years where I was a regular W-2 employee like most people. That was when doing my own taxes was the easiest. Most of the time I didn’t even have to pay to e-file them. These days though, my tax return requires some extra forms and schedules, so I use a paid version of TurboTax do it on my own. And I firmly believe that everyone should do their own tax returns.
Why You Should Do Your Own Taxes Each Year
When it comes to doing your taxes, you have three basic options:
- do them on your own
- go to one of those walk-in centers, like H&R Block and pay a few hundred to get them done
- pay a lot more for a CPA or accountant to do them for you
That list is in order of lowest cost to most cost. Financially, it makes the most sense to do them on your own. And I am not talking about a printed 1040 form, a pencil and a calculator either. Plenty of places offer free e-filing if you just have normal W-2s and do not have any type of complicated tax situation.
Reason #1 – Filing Online is Cheap
If you are self-employed or need to itemize and list some deductions and such, then you can opt for a paid option like TurboTax online or a related service. This is usually around $50 (note that many companies offer discounts – CapitalOne, Chase Bank and Vanguard all usually have a TurboTax discount – try looking on SlickDeals.net for discount offers).
Reason #2 – You Need To Be Knowledgeable About Your Money
Doing your taxes on your own puts you in complete control of your money – and that is a good thing. It is important that you know everything about your finances, including taxes, so that you can make the most informed decisions for your financial well-being. And the truth is that learning how to do your own taxes is not that difficult.
Reason #3 – Doing Your Own Taxes Is Easy
While just the thought of taxes may give you hives and send you into a panic attack, the truth is that doing them is actually pretty simple. When you use one of the online sites like TurboTax, you are walked through the entire process with plenty of prompts. There are even places to click for more information or ask questions as you are completing the tax form. It doesn’t get any easier than that. And, you get the bonus of learning about taxes and how they affect your income.
Reason #4 – You Can Save Yourself Just As Much Money As A CPA
Do not think that a CPA or other tax professional can save you more money on your taxes. The laws surrounding taxes are very clear – there are certain things that can lower your taxes and certain things that cannot. If anyone tells you anything different, then they are likely breaking the law and you certainly do not want any part of that!
Reason #5 – It Saves You Time
Have you ever paid someone to file your taxes? I haven’t, but I do know people that have done so. It takes a lot of time! You have to make an appointment, drive to the office, spend a good hour or two there and then you usually have to come back at a later date to pick up the completed tax forms. That is a lot of time that it just wasted since you can do your own taxes at home in an afternoon.
Reason #6 – You May Be More Qualified Than The Tax Preparer
While this is probably not true if you’re using a CPA, it most definitely will be the case if you use one of those walk-in tax prep enters like Liberty Tax or H&R Block. If you happen to open the job ads section of your local newspaper in November or December, then you will come across the many ads for these tax centers hiring seasonal tax preparers. Little experience is required and the pay seems to range somewhere between $10 and $13 per hour. The people hired for this position get between two and four weeks of classroom training. That is it.
I knew someone three years ago who worked at a H&R Block tax center. He does not have a college degree and his prior work experience includes working as waitstaff at a restaurant and as a customer service rep. at a call center. He was hired as a supervisor and head tax preparer at the tax center.
Still want to get your taxes done at one of those places?