Every year, New Yorkers need clarification about whether to file their taxes themselves or hire a professional tax return preparer. So, Today, we’ll look at both choices and explain the good and bad points of each. So ready? Go!
DIY Tax Filing:
DIY filing is an excellent option for someone with straightforward tax returns and little knowledge of tax laws. For instance, if you are an employee with a single income stream, then DIY tax filing works best.
What is DIY Tax Filing?
Are you confused by the term? Well, DIY tax filing means doing tax preparation and filing yourself without professional assistance. It can be either fruitful or risky, depending on your knowledge and hands-on experience.
Well, we agree that software tools can help you in the self-filing process. Additionally, this software can be frustrating. Imagine finding a specific button in software without any help. Furthermore, what if your data get breached due to software loop holes?
Pros of DIY Tax Filing:
DIY tax filing is a good option and comes with multiple benefits for taxpayers. Here are some pros for your consideration:
Cost Savings:
If cost-saving is your first priority, then DIY tax filing will be an optimal solution. It will cost you more time than money. The tools used for tax filings are relatively cheaper than tax professional fees. Additionally, there is a high chance of finding free software for tax preparation and filing.
Control and Flexibility:
You are the only person responsible for filing your tax as a self-payer. So you get total control over how things are working, when to e-file your taxes, and more. Furthermore, you don’t need to go to a tax accountant’s New York office to discuss your case and wait for meeting times.
Learning Experience:
As you do your tax preparation, you encounter a lot of new information. Tax preparation is not a one-time process. You need to do it every year. So, if you know about legal terms and law updates, it will help you in the long run. How about having knowledge of itemized deductions? It will save you on taxes while giving you a fresh punch of expertise.
Cons of DIY Tax Filing
Every good comes with a bit of wrong. So does DIY tax filing:
Complexity and Errors:
New bees always make mistakes in tax preparation. Submitting a W-2 or 1099 is okay! However, if you have complexity in taxes, there can be a lot of errors that ultimately lead to penalties or rejection.
For instance, you might not be aware of last-minute legal changes or missing some necessary information on the form, making it invalid for processing.
Time-Consuming:
NYC tax accountants already know the law. On the other hand, you need to do the research, learn new things, and file according to specified criteria. Furthermore, relying on software will not be a good bet. Especially if something fails during the process. Imagine spending more than 15 hours on a tax file while the work could be done in just 3 hours with the minimum headache.
Limited Guidance:
Tax return preparers have studied the law, but for a new preparer (consider yourself), there can be significant mistakes due to a lack of knowledge. For instance, submitting an unsigned form to the IRS can result in penalties or a delay in a tax refund.
Using a Tax Return Preparer:
Most of the New York population relies on tax return preparers. The reason behind it is simple. You get peace of mind on all tax-related issues. Just pay their fees, and they will handle everything for you.
What is a Tax Return Preparer?
Simply put, a person who files taxes, prepares documents, and advises you on tax-related concerns is a tax preparer. There are different degrees and certificates that enable a person to handle legal entities and prepare taxes. Below, we have some tax preparer titles that usually handle tax-related work.
- Enrolled Agents (EAs): Primarily handle tax preparations, document submission, and document preparation, as well as representing your case to tax authorities.
- Certified Public Accountants (CPAs): CPAs prepare documents, file tax forms, and work closely in tax planning and legal advising.
- Tax attorneys: Usually deal with audit issues, fraudulent cases, and international tax concerns.
Pros of Using a Tax Return Preparer:
Expertise and Accuracy:
Find a tax accountant who will bring expertise and accuracy to tax matters. It’s that simple! Professional accountants have years of experience handling tax work like yours. They built up the skills to handle everything accurately. Working with tax return preparers eliminates the risk of missing details or mistakenly entering the wrong information.
Time Savings:
Tax preparation is a matter of experience. A certified public accountant can do it faster than a non-professional filer. Furthermore, they know more about tax details, which can be missed in DIY tax filing.
Maximized Deductions and Credits:
As we all know, NYC has its own tax laws. So, having a personal tax accountant NYC will be the best idea. They can save you more on deductions and maximize your credits.
Support in the Case of Audits:
Minor mistakes can put you in audit territory. So, to keep you on the safe side or handle your case, you need expert tax advisory services. Audits take a lot of time, and the details demanded from tax authorities might not be digestible for you alone.
Cons of Using a Tax Return Preparer:
Cost:
Tax accountant salary in NYC is relatively high. Furthermore, there can be additional charges for different services, sweeping money out of your pocket. If you have a simple tax return and can e-file it on your own, then it’s better to do it yourself.
Dependency:
Tax Advisor NYC requires a lot of information, including your social security number, bank account number, mortgage, and loan details. That means you are entirely relying on a person for your tax matters.
Comparing DIY and Professional Tax Filing:
Tax accountant New York have more tax knowledge than a resident. However, the fee can be a big chunk for you. Let’s compare them side by side to get a deeper understanding and better selection:
Cost vs. Value:
Tax return preparers’ fees range from a few hundred to thousands of dollars, depending on their expertise and time requirements. On the other hand, DIY filing is a quick way to save money. But keep in mind the potential for mistakes and hassle that come with self-tax preparation.
Complexity of Your Tax Situation:
Count on your tax situation. Can you do it yourself, or do you need professional help? For instance, tax audits and disputes require professional assistance, while forms 1040, 1040A and 1040EZ can be self-prepared.
FAQ (Frequently Ask Question)
1- Should I do my own taxes or pay someone?
It totally depends on your tax situation. You should do your own taxes if its a simple W-2, W-7, form 1040, form 1040A. Meanwhile for complex situations get help from a tax return preparer.
2- Can a tax preparer get me more money?
- No, a tax preparer will not get you more money than your refund. However a professional can help you minimize tax deductions and guid you about tax reliefs you might not aware of.
3- How much does it cost to hire someone to do your taxes?
Typically, it cost $170 to $250 in NYC. however price can fluctuate according to CPAs experience and your services you require.
Wrap up:
A good rule of thumb is to weigh your tax situation. Determine yourself, whether you need a tax return preparer or matters can be handled on your own. The choice between these two is all yours too make.
Additionally, if you are super confused, you can also consider the best tax service NYC. They can guide you through the process, offer multiple services simultaneously and provide complete peace of mind.
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