Generally, I tend to find many of the articles on MSN Money either too narrow-sighted or overly-simplistic.
I did, however, feel that Jeff Schnepper wrote a very interesting article called Should You Do Your Own Taxes?
It wasn’t one of those entries about how anyone can do their own taxes as long as they have all of the documentation needed and a piece of software.
At the same time, it wasn’t one of those pieces that downplays the ability for people to do their own taxes while calling for the need to use a professional.
Instead, this article speaks to the rational side of people.
He called on them to take the time to truly assess whether or not they can handle this important task on their own.
This isn’t a review of the article, but Mr. Schnepper makes the point that it isn’t about what you know, but rather what you don’t know (as well as what you think you know, but actually do not) about taxes that is the key to making the decision to bring in a professional tax preparer.
The problem here, is that many people do not know about many items contained in the US tax code that pertain to their individual circumstances, and that is the dangerous part.
If you do not keep up with tax code changes you will never know that your previous understanding was either correct or incorrect.
What’s more, is that by the time you find out the truth, it may actually be too late.
I’ve never been a big proponent of tax software or tax services, simply due to the fact that there is no relationship (ongoing or otherwise) involved with either.
Once the tax return is done and submitted to the IRS, that is the end of the “relationship”.
The way I approach my clients and accounting business is more of an ongoing relationship than a task that has a specific start/end date or a specific goal such as filing a tax return.
I view it as being a vital step to find out as much as possible about clients to be able to provide the most accurate and targeted advice possible.
It isn’t just about the hard numbers, but about goals, plans, and emotions.
Storefront tax services and software packages simply cannot, or choose not to, provide the kind of on-going advice and planning, not to mention emotional support that a live person who is available all year round can provide; it is simply not what their main concerns are.
In the past I have said that for simply preparing a return, out-of-the-box software programs will do the job nicely.
On the other hand, I will never back the use of storefront tax preparation services (and will not even give them the benefit of mentioning any names) that require nothing more than a crash course in simplified tax theory and use of that chain’s software in order to gain employment with them.
I especially discourage these options when there are many degreed, experienced, and licensed options out there with much more knowledge available.
Not only do they pay low rates to the tax preparers whom they employ (commensurate with the lack of knowledge and experience), but many also pay commissions based on the number of returns prepared which is also not the best business practice since it promotes quantity over quality.
It is not a good idea to hire someone whose main concern is the speed in which a tax return can be completed, while sacrificing accuracy and care in making sure everything that needs to be there is there, or possibly spending a little extra time looking for more ways to minimize your tax liability.
Each person is entitled to choose which is the best way to get their taxes done, and there really is no right or wrong answer unless upon later review the return was discovered to be incorrect.
The best choice is the informed choice, so read through the article, the links contained within (which are very informative as well), and any other resource you can find to make the best decision for yourself.
And remember, if you are not completely comfortable with the outcome, you generally have 3 years from the original tax filing deadline for file an amended return.
If you end up deciding going with a professional tax preparer in the future, be sure to ask if they will do a free review of the previous years tax return.
Many do not, but like me, I’m sure there are some out there who will do it for free in an effort to best serve the client.