Should I Really be Doing my own Taxes?

Posted by MoneyThinker in featured, Taxes | 4 comments

Should I really do my taxes myself?

As a teenager, I remember my mom always doing her taxes, my grandma’s taxes and my own. Mine were easy enough, but I always wondered if my mom really should have been doing her own.  Last year’s taxes were a hassle, my mom was terminally ill and I had to figure out what I was doing myself. I promise you, I will never be doing that again. There are too many things that I could (and probably did) miss out on.

Nowadays, more and more people are doing their own taxes with software programs like Turbo Tax, or use online services like H&R Block offers. This isn’t a bad thing… if your taxes aren’t going to be complicated. What do I mean by ‘not complicated,’ you ask? Ask yourself these questions if you are considering doing your taxes yourself this coming year:

1.       Do I live in the same state that I work in? For some of you, this probably sounds really odd. But, I’ve lived both on the Pennsylvania/New York and Pennsylvania/Maryland border. Things get really complicated when you live in PA and work in MD or NY. You have to file their state taxes, your state taxes, all kinds of things on federal taxes. So, if you live in one state and work in another, you may want to consider going to a professional.

2.       Who do I work for? If you own a small business or are self-employed, there are some tax laws you really need to pay attention to that you may miss without the help of an experienced tax professional. This will help you avoid a potential audit.

3.       Do I have education expenses? Do you pay a child’s tuition or your own? Or are you in the process of paying off student loans? Did you know that you can write some of those expenses off on your taxes? I didn’t either, until recently. If you have a lot of educational expenses, take the time and money to try and figure out what the deductions are.

4.       Have I recently lost a family member? Inheritance, gifts from the estate, life insurance, and all of those things can confuse us when it comes to be time to do our income taxes. See a professional to see what you have to claim and what you don’t.

5.       Have I made any charitable donations? Do you put money in the offering at church? Have you donated clothes to the local Salvation Army or other local organization? Have you donated food to the local food pantry? Make sure to get receipts for these (all of those organizations have ways to keep track so you can claim them on your taxes) and see a tax professional to get the most out of your returns for these.

6.       Do I receive any federal assistance? Health insurance, food stamps, social security disability, whatever it may be; some of these may have to be filed on your claim.

7.       Am I retired? Retired persons don’t necessarily have an income. A tax professional can help you figure out how to file best to your benefit.

8.       Did I take advantage of any of the tax breaks offered in the past two years? I wrote another article on the “going green” tax breaks a couple weeks ago. There were also tax breaks if you bought or built a new home, and many more. Make sure you have your paperwork in order and that you get the maximum benefit by going to your tax professional instead of guessing where these go.

9.       Do I really have the time and effort it takes to do it myself? A lot of this information you really can figure out yourself. But the problem is, it takes a really long time and a lot of patience. If you don’t have a lot of one or the other (or both!), consider shelling out the extra money to get your taxes done by a professional. It will save you a lot of time and headache.

Did you answer yes to one or more of these questions? Then, you should consider getting your taxes done professionally this coming year. If not, then sure, it’s not a big deal to do them yourself. It’s estimated that over 60% of Americans get their taxes done by a professional. So, don’t feel silly for taking the time to do so.