If you’re among the many do-it-yourselfers across the country, please think twice about tackling your tax returns without professional guidance.
There are several reasons for letting somebody else handle the details of your tax returns.
The first one’s obvious: completing the required IRS forms can be extremely time-consuming and frustrating. The average DIYer spends around 14 hours completing a tax return.
And remember how maddening it was the last time you filed your Form 1040 on-line? Remember what it felt like to reach Line X, only to be instructed to verify that Line A was 3 times smaller than Line Z on Form ADP and to enter the greater of the lesser numbers multiplied by the figure in Line E, after you divided it by the sums of Lines L and M on Schedule Q? (Obviously I’m exaggerating a little here, but you get the drift.) Remember how everybody in your household suddenly recalled very important dates, far, far away from the house, when you blew up at the computer?
Remember how you stomped around your home office, muttering that you would never, never, never, ever again, complete your tax return yourself?
That image alone should convince you that the dollars you save by preparing your taxes yourself don’t offer adequate compensation for the headache you get from the teeny print of your tax software program. But if you’re still longing for bragging rights to conquering Uncle Sam’s puzzling tax forms, understand that Uncle Sam doesn’t hand out trophies for wading through the endless instructions and forms of the annual tax return. Think about that fact while you dash madly toward the nearest qualified CPA. Here’s why:
- Uncle Sam likes you to use tax software. It makes his job easier. But you take a chance on supplying the right numbers in the right categories contained in the software. And if you get the numbers and categories wrong, your return triggers attention from auditors. If you’re audited, Uncle Sam might ask to review your “work papers” – the way you come up with the figures you provide to the IRS. If you don’t possess an in-depth understanding of the software you chose, you won’t be able to explain those numbers satisfactorily.
- Major changes in your life – for instance, marriage, divorce, the purchase or sale of your residence, death of a household member – can mean changes in your tax liability. While you may remain in the dark about exactly which late-developing situation will alter your tax liability, a CPA is skilled at ferreting out which life circumstances will impact your tax return and advise you accordingly.
- CPAs provide you with personalized service designed to take advantage of every tax break available to you.
- CPAs can offer you guidance to minimize your tax liability through wise financial planning, so that your future tax liability doesn’t increase substantially.
Of course, if you’re a true DIYer at heart, come April 15, you’re probably going to be morose at the thought of having hired somebody else to do what you could have done in a long, irritating 14-plus hour mathematical marathon. Shove the emotion aside and get started on a home improvement project instead. Uncle Sam’s not likely to audit your latest installation of a deck on so no tubes strong enough to support a 16-person hot tub. Unless, of course, you attempt to write off the materials as charitable contributions.