If you’re wondering whether to file your taxes yourself with tax software or get help from a tax professional during tax season, here are some guidelines to help you make the right choice.

What Are Tax Professionals?

A “tax professional” isn’t a defined job title but more so describes a person with the knowledge, credentials, and hands-on experience to assist you with tax-related services. These professionals stay up to date on tax laws, rules, and regulations, which can change every year and have a big impact on how much you owe or get back in your tax refund.

Typically, the main types of tax professionals are:

• Enrolled Agents (EA) – are tax experts licensed by the IRS. They can prepare and sign tax returns and offer advice on how to reduce future tax liability.
• Certified Public Accountants (CPAs) – are people who have been licensed by state boards.
• Tax attorneys – are individuals licensed to practice law who specialize in tax matters. They are especially helpful if you have a dispute with the IRS and are looking to have it resolved in court.

When to Use a Tax Professional

So, now that we have defined “tax professional” for this blog, when should you hire one instead of taking the DIY route with tax software? Here’s when it will benefit you.

You Have a Complex Tax Situation

If you’re dealing with more than just a W-2 and a couple of 1099 forms, it’s probably time to call in a tax pro. What do we mean by a “complicated” tax situation? A few situations that could complicate your tax situation and require a tax professional for help include:

• You have a lot of taxable investment outside of your retirement accounts
• You made a big Roth conversion
• You own a rental property
• You owe taxes in multiple states

You don’t want to be making mistakes on your tax return. And the more complicated your return, the easier it is to mess it up, especially when you’re doing it yourself with tax software. Not only will a tax professional ensure your return is mistake-free, but they are invaluable in navigating the complexities and optimizing tax outcomes.

You Had a Major Life Change This Year

Online tax software can handle a few specific life changes (getting married, buying a new home, and having a baby), but tax pros can help you navigate through any major life change.

So, if you started or sold a business, retired, went through a divorce, received an inheritance, or had any other significant life change, a tax pro can give you the personalized help you need. They’ll also understand the nuances and ever-changing tax codes that impact people with tax situations, meaning they’ll help alert you to relevant rules you have to follow and the tax breaks you may be entitled to.

You Own a Business

Whether your business is a full-time endeavor or simply a side job, there are special rules that you may want a tax pro to help walk you through. They’ll be able to help you file (and may know deductions you can take) and take the headache out of figuring it out yourself.

You Want to Save Time

Filing taxes takes time. Tax software is convenient, but you still need to dedicate time to sitting there and inputting your information. Even when pulling from last year’s data, you need to verify what’s there and report new data.

For qualified tax pros, preparing taxes is second nature. When you have an expert prepare your taxes, your only time commitment comes from collecting your paperwork and handing it over – and maybe answering a couple of questions. If you’ve got better things to do on your Saturday (or any day) than taxes, contact a tax pro to help you out.

When to Use Tax Software

There are plenty of reasons why it’s smart to get advice and work with an expert when it comes to your taxes. But, there are some times when it makes sense to use tax software.

You Have a Simple Tax Situation

You can probably get away with using tax software if you have a simple tax situation. A “simple” tax situation could mean:

• You have a fixed income, or you have one or two sources of income (like a full-time job and part-time job)
• You have few or no investments outside of your tax-advantaged retirement accounts
• You haven’t taken money out of your retirement accounts before you’re eligible
• You plan on taking the standard deduction

You’ve Had Few Life Changes This Year

If you got married this year or welcomed a new baby to the family, you can probably handle filing with tax software. Tax software can handle simple and few life changes and shouldn’t make filing yourself any more complicated.

You’re Comfortable Filing on Your Own

For some, dealing with taxes is a daunting nightmare, and in that case, a tax expert is the way to go. For others, taxes are a yearly routine chore. If you’ve been doing your taxes year after year and not much has changed in your financial or personal situation, you’ll likely be able to handle doing it for another year. Just make sure you don’t make any errors and are familiar with any relevant changes in the rules.

Also, if you ever get stuck, know you can always reach out to a tax pro for guidance.

Remember – it’s better to work with a tax pro a bit before you need a tax pro. 

Gaylor Tax Services is Here for You

If you’re still on the fence about deciding what to go with, remember – it’s better to work with a tax pro a bit before you need a tax pro.

Decided your situation is too complicated or want personalized, strategic guidance? We’re here to help. At Gaylor Tax Services, we can assist you with tax compliance, tax filing, tax planning, and even support you in case of an audit. Our experts are here to answer your questions year-round, so do not hesitate to contact us. We are located in Phoenix, Arizona, but can assist you anywhere in the state.