Most people with basic returns can do taxes themselves with online software – no reason to spend $100’s for an accountant – let's get you empowered to file your own taxes.
While a professional tax adviser may help in certain complex situations, in many cases taxes can be relatively simple. If you've never filed your own taxes, you might be scared off by all of the mystery and complexity that seemingly surrounds the process.
However, like many things in life, once you've filed your own taxes once, you will see how easy it is and wonder why you never did it before! Hiring a professional may not even have the effect you think in terms of audit protection or liability. You can simply follow instructions shown with any basic online program or software and complete the return yourself.
Here are some popular, yet untrue myths regarding taxes.
Taxes are too complex
The popular press makes taxes seem complicated by quoting politicians demanding reform and referencing just how many volumes the tax code fills. In reality, the vast majority of taxpayers don't have to worry about most of the tax code or forms, which applies to very specific situations.
Although times are changing, most American taxpayers still hold a "traditional" job, work for an employer, and receive a W-2 filled with most of the tax information needed at the end of the year. There will always be situations in which hiring outside help makes sense, particularly if you run a large complex business or have extensive investment assets. But if you are the employee of someone else's business with little outside investments, then keep it simple, since it is simple!
While you shouldn't avoid itemizing if you have the requisite expenses, for most taxpayers this isn't an issue – especially after the recent tax law passed.
The Standard deduction almost doubled, so most taxpayers will be using the standard deduction instead. This makes doing your own taxes a much simpler process. The online programs or software will easily compute which kind of deduction is better, the standard or itemized.
You simply enter various deductions such as Charity, Mortgage interest and others.
For the self-employed, again, you can follow instructions shown with any basic online program or software. You can list your income, subtract your deductions and credits, and arrive at the correct amount of tax you owe all on your own.
TurboTax and H&R Block even let you speak with tax professionals like CPAs, EAs and tax attorneys for free by phone or live chat, in the event you run into any questions.
I'll get audited
Doing your own taxes in and of itself doesn't make you more likely to be audited. Similarly, having someone else do your taxes doesn't necessarily make it less likely that you'll be audited. Since the IRS can't possibly review in detail every single tax return it receives, it has a series of triggers that flag suspected returns for further review. If your return carries any of these red flags, it might not matter whether you did your taxes yourself or used the highest-priced accountants you could find.
Professional tax preparers may be less likely to make certain errors, since they are more familiar with the tax filing process in general, but hiring one is no guarantee you will be shielded from an audit.”
When you use TurboTax or H&R Block to prepare your taxes, you automatically gain access to their Audit Support Center, and can talk to their tax professionals year-round, in the unlikely event you are audited.
I don't have to file
Some taxpayers believe that if they don't make enough money they don't have to file a tax return. However, many other factors come into play when it comes to filing. For example, if you earn any self-employment income, you're responsible for filing a return as soon as you earn just $400.
Additionally, if you qualify for various taxpayer credits, such as the earned income tax credit, or if you had excess money withheld from your paycheck, you should file a return no matter what your income. You can't get money back from the IRS if you don't file a return.
Learn about you tax situation, know it well, you can file on your own, save money and not pass up on refunds you did not know about.