Business Week recently shared a chart that showed how Americans have their taxes prepared. 60% of people use an "expert" (their words) while 40% do it themselves. Here's the breakdown for each:
60% have their taxes prepared by an expert
- 45% by mom and pop tax preparers, CPAs, and lawyers
- 10% by H&R Block
- 5% by Jackson Hewitt and Liberty Tax Service
40% do their taxes themselves
- 20% use TurboTax
- 7.5% use pen and paper (old school!)
- 6% use H&R Block Digital
- 3.5% use TaxAct
- 3.5% use some other software product
Here are my thoughts on this information:
- I was surprised that a majority of people had their taxes done by someone else. I thought that most people did it themselves. Why? Because most tax returns are pretty simple, so why wouldn't people do them themselves?
- I was surprised that so many do taxes by hand. I guess that for very simple returns, it's no problem. But with simple things like "math" being a key reason there's a mistake on a return, I would think some software help would be prudent.
- I wonder what the breakdowns are between "mom and pop" preparers and "higher level" preparers like CPAs and lawyers.
I've detailed why I use a CPA to do my taxes, but the main reasons are that she saves me time, money, and frustration. And especially this year, when my taxes are complicated even more by an LLC with rental properties, I am glad I have a CPA working for me. (Note: You can read up on the new CPA I got last year by checking out I Hired a New CPA and How It Went with My New CPA).
What about you? Do you have someone else prepare your taxes or do you do it yourself? Why?