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Last year was a crazy year for you. You tried your hand at a small business. You invested your money. You bought a house. You had a baby. But, should you do your own taxes?
Now that it is tax time, many women are asking themselves if they should prepare their taxes on their own or if they should seek professional help. With tax preparation being so difficult these days, it can really be challenging to know who should handle the tax preparation for you.
Tax time can be tricky, so there is never a perfect answer to the questions you ask yourself. If you find yourself overwhelmed, check out these five to ask before you make a decision.
Five Questions to Ask Before You Do Your Own Taxes
#1) Can You Handle the Pressure?
Tax preparation can be very taxing. It can give you an overwhelming sense that you are doing things wrong. This is especially the case when you find yourself stuck on the tax terminology and the impossible jargon of tax law.
If you are preparing online or filing by yourself, you may find it difficult to answer some of the questions, simply because you can’t figure out what the questions mean. This confusion can cause quite a bit of pressure on you, as you always want to do your taxes correctly, and you don’t want to cheat on your taxes accidentally.
If you are the type of person that gets frustrated with odd wording and confusing rules (especially the ones you are not sure to apply to you or not), you should seek the help of an accountant or CPA.
However, if you are the type of person that can figure out exactly what a question means, you may be able to do your taxes on your own.
#2) Are You Planning to Itemize?
Many women find that they can get a more substantial return by itemizing. This process shows precisely how much you put into your small business or line of work. You only itemize money that you took out of your pocket to purchase items for work. Your employer has not reimbursed this money.
If you have major medical costs, a mortgage, or make large charitable donations (among other factors), you might save more money itemizing your deductions than taking the standard deduction.
Additionally, if you are itemizing, you may save yourself a whole bunch of time and a lot of hassle if you seek the help of an expert.
#3) Did You Experience Big Financial Changes this year?
There are several large purchases and financial changes that can affect your tax return. Was this a year of changes for you? If you bought a house, had a child, got married, started a business, or borrowed from your 401k, you may consider seeking an accountant.
These life changes have a big impact on your taxes. Even if you learn quickly, it may be best for you to see how the professionals work with these significant financial changes before you try your hand at your own taxes.
#4) How Complicated Are Your Taxes?
We’ve already discussed significant financial changes. However, there are even more elements that can make your tax preparation confusing. Consider everything you plan on writing off in your taxes. Now, consider your total income.
For example, if you started your small business this year, it is essential to know that your business taxes are going to be different from your personal taxes, and they will be different in many ways.
It might be dangerous to attempt such complex tax matters without expert knowledge.
After considering how complicated your taxes are, you will have a better understanding of how you should prepare them. If you find yourself overly frustrated trying to do your own taxes, consider the cost of the time you are taking to prepare them, and weigh the options if it is worth it to pay a professional to do so.
#5) What is Your Comfort Level With Your Taxes?
In the end, your comfort in doing your own taxes is more important than anything else. This question goes hand in hand with question 1 concerning your ability to handle the stress.
If you are a numbers person who loves to figure out what everything means, you should attempt to do your taxes. If you are someone who works very closely with your financial books throughout the year, and you know exactly where every dime of your money has gone, you are in an excellent position to prepare your own taxes.
However, if you get confused by numbers easily (and yes, a lot of people do, so don’t feel as though you are “stupid”), you will benefit from seeking a professional accountant.
In the end, only you can know if you are comfortable enough to file your own taxes. Remember to weigh the options against the time and stress you will use to prepare your taxes. Ask yourself the right questions to help you make the right choices when it comes to filing your own taxes. Do you file your personal taxes? What are some of the troubles you have experienced? Share with us in the comments below!