Today I want to talk about who you should use for your tax preparation. Riveting topic I know, but a very important one if you don’t want to be stuck paying more than you should in taxes OR if you want to make sure your taxes are done right.
First let’s break this down into the three categories of tax preparation services that you can use.
- Software – there are many software programs on the market that allow for you to fast file your taxes online on your own
- Tax Preparation company – these are firms that will do your taxes for you – you simply walk in or schedule an appointment and they will help you do your taxes. Examples include H&R Block and Liberty Tax.
- CPA – a CPA (certified public accountant) has more training that the other options. Not only do they have hours of study underneath them, but they also have to work under another CPA to become official. Many CPA firms also require your tax forms to be looked at by two people to catch errors.
Your situation will determine which service you decide to use. Basically the more complex your situation the more help you need to make sure you get it right.
So if you are single and get a W-2 from an employer and then the software service will work just fine.
If you are married and both of you receive a W-2 and everything else is basic the software will also work. Once you start adding kids and a house it might pay for you to move up to a tax preparation company. To make sure you are getting the most out of deductions and credits.
If you have anything beyond what I have mentioned in the past two areas I would highly recommend a CPA, especially if you own a business. You might be surprised that most CPA’s are very reasonably priced. In fact the more complex your return the better the value of a CPA.
Things to Keep in Mind When Deciding Where Have Taxes Done:
- If you do go to a tax preparation company look for one that has higher education standards, such as H&R Block. Don’t be afraid to ask what they require of preparers.
- If you are using a tax preparation company ask for a preparer that has multiple years under their belt or they are an EA (enrolled agent).
- If you make under $58,000 you may be eligible to file your federal taxes for free, check the IRS website to see if this is an option for you. (Notice this is just for federal, states vary and you will have to check with your specific state).
- When you are picking your software, I would highly recommend the H&R block software because they offer audit support and guarantee their calculations if you need it. Since they have offices that are open year round, this is very beneficial if something comes up in August! Plus they are one of the few that is backed by an actual tax company and not a software company. (Save 15% on H&R Block Online Tax Software*)
Now it is action time: You have about two months to get your taxes done, so pick the service you want to use, gather your papers and get going!