As tax season gets close to wrapping up, I thought this piece from Business Insider was timely
It gives a flowchart, decision-tree on whether you should do your taxes yourself or have someone else do them for you.
The times they suggest you should hire someone include:
- Household income over $200k
- Self-employed or own a business
- Extensive investments
- Make large charitable donations
- Had a major life change like baby or marriage
- Don't have the time and patience to DIY
Other than the major life changes, all of these pertained to my family for most of the past 20 years. That's why we've used a CPA to do our taxes for most of that time.
This year it took me a fraction of the time to get everything together for my CPA. Once I retired things did get a bit less complicated in some ways, but more complicated in others (like having a daughter in college.) So unless things shift drastically for us, we'll probably keep using a CPA for taxes for the foreseeable future.
How about you? Do you hire someone or DIY? Why did you decide to do it this way?
We have our taxes prepared every year by our CPA. I am terrible at numbers, math, and anything associated with taxes. Its peace of mind for us.
We have a rental, recent inheritance from parents, and high charitable giving to keep track of. Anytime I have a question during the year about anything financial, I can call him and ask.
Posted by: ~Lisa~ | April 02, 2018 at 09:48 AM
Not necessarily.....There are great software packages and also support from Audit Companies that will buffer the investors / individual from IRS. All this can be done for under $100 per year, plus personal time. I have pretty complex taxes, but do it myself right now.
It is just a bunch of 200 odd questions on investments, job, expenses, charity and real estate. Answer them, put in the numbers, and whalla! You are done with refund coming to you.
Posted by: Kenny | April 03, 2018 at 02:36 AM
I have been handling my own taxes since I was 16 years old and so far so good. Maybe since I started early, the complexity has only slowly been added over time, e.g. the small business, the investments, etc...
I do toy with the idea of getting an accountant to handle them sometimes, but it always bugs me to think about paying someone else to do something I could handle perfectly well myself.
Maybe I'll reconsider next year when my daughter starts college or when I get closer to retirement and things may get more complicated for a few years as I transition funds around.
Posted by: Jon Sharpe | April 04, 2018 at 07:40 PM
I completely agree with Kenny. Complicated taxes are rendered simple and cheap to self-prepare with Turbotax. Also, I've been hit with tax penalties twice for mistakes originating from professional tax preparers, i.e., human error. I trust software sold to millions more.
Posted by: Gurgling Snurg | April 06, 2018 at 12:22 PM
I have our taxes done by a CPA. High income, dealing with issues around stock options, multiple states involved (travel extensively with job), etc. Another major reason is that if something ever happens to me, the CPA can assist with any future questions.
Posted by: JimL | April 08, 2018 at 03:04 PM