Image by: Jason Dirks
By Judy Willard
2014 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.
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 difficult to know who should do the 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 yourself if you want to figure out if you should take on your own tax preparation, or if you should have a professional do it for you.
#1) Can You Handle the Pressure?
Tax preparation can be very finalizing. 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 that you cannot answer some of the questions on the documents, because you cannot figure out what the questions mean. This can cause quite a bit of pressure on you, as you always want to do your taxes correctly, and you don’t want to accidentally cheat on your taxes.
If you are the type of person that gets frustrated with odd wording and confusing rules (especially the ones you are not sure 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 woman find that they can get a larger return by itemizing. This is a process that shows exactly how much you put in to your small business or line of work. You only itemize money that you took out of your pocket to purchase items for work. This is money that has not been reimbursed by your employer.
According to Libby Kane of businessinsider.com, “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 whole bunch of hassle if you seek the help of an expert.
#3) Did You Experience Big Financial Changes in 2014?
There are several large purchases and financial changes that can affect your tax return. Was 2014 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.
According to Libby Kane of businessinsider.com, “These all impact your tax filing, and, at least the first time you document them on your taxes, you might want someone to show you how best to do it.”
Even if you learn quickly, it may be best for you to see how the professionals work with this big financial changes before you try your hand at your own taxes.
#4) How Complicated Are Your Taxes?
We’ve already discussed large financial changes in 2014. However, there are even more elements that can make your tax preparation confusing. Consider everything you plan on writing off in your taxes for 2014. Now, consider your total income.
For example, if you started your small business in 2014, 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.
According to Carrie Smith, “Starting a new business or hobby venture takes expert knowledge. You wouldn’t jump off a diving board without swimming lessons, so you shouldn’t try to do your business taxes without some guidance.”
It might be dangerous to attempt such complex tax matters without expert knowledge.
After considering how complex 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 paramount to 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 own taxes. If you are someone who works very closely with your own books throughout the year, and you know exactly where every dime of your money has gone, you are in a good 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 prepare your own taxes. Remember to weigh the options against the time and stress you will use to prepare your own 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 own taxes? What are some of the troubles you have experienced? Share with us in the comments below!