It's never been easier to file your taxes on your own. With IRS Free File, taxpayers with an adjusted gross income of $72,000 or less can file through the IRS website for free. But using a tax preparer can save money, especially if you have a more complicated tax return.
Before you reach out for tax help, though, it's important to make sure you're getting the right person for the job.
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Types of Tax Professionals
Before you determine whether you need a tax professional, it's important to look at the various types of preparers and the unique purposes they serve.
- CPAs: For small businesses and those with complicated taxes, certified public accountants are likely the best. CPAs are licensed by the American Institution of Certified Public Accountants after completing 150 semester hours of education.
- Tax associates and specialists: Outfits like H&R Block tend to staff specially trained tax pros to handle taxes. Not all of these specialists will have certifications, so if this is important, be sure to ask about it.
- IRS enrolled agents: If you ever need to present your case to the IRS, you'll likely have to track down an enrolled agent (EA). To become an enrolled agent, professionals must complete at least 72 hours of continuing education every three years.
- Tax attorneys: For those sticky tax situations, you might need someone who knows tax law. This type of tax expert can help with tax settlements, wills and estates and other types of legal issues.
Consider also: Are Medical Expenses Deductible?
DIY Tax Preparation Options
In most cases, you can file your annual income tax on your own. There are several options now available, some free and most cheaper than using a professional tax preparer.
- IRS Free File: There are several options for filing your taxes for free through IRS.gov. If you made $72,000 or less, you can e-file for free, or you can do your own taxes using the fillable forms option. Those who qualify can also get free tax prep assistance through IRS Volunteer Income Tax Assistance and Tax Counseling for the Elderly.
- Tax software: There's a wide range of tax filing solutions on the market, including TurboTax, TaxAct and H&R Block. Simple tax forms can often be filed for free, but you'll be prompted to upgrade if you need special forms.
- Paper tax forms: There's always the old-fashioned way of filing for free. You can find all the tax forms online, print them and mail your return in. Public libraries typically also stock all the forms at tax time.
When Tax Professionals Are Necessary
As tax season nears each year, you're likely wondering if you can get by with a DIY tax preparation solution. The answer is it depends. If you're self-employed or are unsure about tax credits, you'll probably need some expertise. Small business owners and corporations often need professional tax preparation.
But even if you have simple taxes, there are benefits you'll get by going with someone who has professional credentials. Tax preparers can help with tax planning, and some CPAs can provide financial guidance. Professionals can often help you minimize your taxable income while also helping you avoid tax issues.
Before you reach out for tax help, though, it's important to make sure you're getting the right person for the job. Check the credentials of any tax return preparer you're using. Also make sure your preparers will stand behind their work with an audit guarantee, offering assistance and guidance if you're ever audited on any returns prepared by them.
Consider also: How to Know if You Can Deduct Tax Prep Fees
Tax time can be stressful, but the right tax pro can make the process easier. Whether you go with a CPA, tax associate or an e-file option, it's important to make sure you double-check your return and make sure it's factual to the best of your knowledge before sending it to the IRS.
- IRS.gov: Free File: Do Your Federal Taxes for Free
- Association of International Certified Professional Accountants: 150 Hour Requirement for Obtaining a CPA License
- H&R Block: Our Tax Professionals
- IRS.gov: Enrolled Agent Information
- IRS.gov: Electronic Filing Options for Individuals
- IRS.gov: Forms and Publications by U.S. Mail