As of 2018, 63.4% of all electronically filed tax returns are prepared by tax professionals. Even though there are some solid benefits for trusting an accountant with this task (such as accuracy and time savings), there are other reasons you may want to consider doing your own taxes. Whether you still need to file your taxes for this year, or you are planning for the future, filing on your own may even prove to be the best option for your unique situation.
Explore three of the top reasons for learning how to file your taxes without professional assistance.
Eliminate or reduce expensive tax prep fees
Depending on your employment and financials, tax professionals charge different amounts for the forms that they must file for you. However, the average tax preparation fee was between $176 and $273 for those filing their 2017 taxes. If your taxes are complex enough, it isn’t uncommon to be assessed a fee of upwards of $400 to $500. When you learn how to file your personal income taxes without an accountant, you can reduce (or even eliminate) your tax preparation fee. For most people, DIY tax prep software is a sufficient solution. These programs run between $40-$80 on average, making them much more affordable than professional assistance.
It is easier than ever before to file your own taxes
If you have always been nervous about doing your taxes by yourself, there are more reasons than ever before to rid yourself of this anxiety. When using one of the leading tax preparation software programs, you can expect step-by-step guidance. From start to finish, you are prompted to enter all important forms, deductions, and personal information. These programs have even become advanced enough to detect mistakes and possible risk factors for audits. This is true for both your federal and state returns. Also, to help boost your confidence even further, you can often chat online with a tax professional (through your program’s software or support site) to answer any questions you have about filing your return.
Better understand how tax deductions and credits work
Lifelong learning has been proven to keep your brain healthy, boost your income, and improve social relationships. One excellent skill to learn to help achieve these benefits is doing your taxes by yourself. Rather than never seeing what goes into preparing a tax return, you can learn how each variable affects your situation. For example, you can discover how credits and deductions impact your refund, and if you are paying too much or too little in taxes with each paycheck. When you have a better understanding of how taxes work, you can also grasp how changes to tax laws affect you.
Rather than paying hundreds of dollars to have someone prepare your taxes for you, consider whether or not it might be a better choice to file your own taxes for the upcoming year.