Should I Do My Own Taxes Or Hire An Expert? (2024)

Deciding whether to prepare your own tax return isn’t always straightforward. In some instances, doing your own taxes is the best option. For example, if you have only one W-2 and no deductions, the best do-it-yourself tax software may be the way to go.

But in other cases, you may need more guidance. If you own a business, sold investments or worked in multiple states in 2022, you may want to hire a tax professional.

Still not sure? Here are a few factors that may help you decide whether to hire a tax professional.

Should I Do My Own Taxes?

It depends. For starters, consider your tax knowledge, the complexity of your tax return and whether you expect to need additional assistance after Tax Day.

Here are examples of more complex tax situations where it may be worth paying someone to prepare your 2022 return.

• You worked multiple jobs.
• You sold investments, a home or business interest.
• You received investment, rental or business income, and paid related expenses.
• You started or operated a small business or were self-employed.
• You were audited in previous years.
• You recently were married or divorced, had a child or experienced the death of a loved one.
• You want to maximize your taxable retirement contributions.
• You would like to reduce your tax liability overall.
• You worked in multiple states.

You should also think about the time it would take to complete your tax return on your own. The IRS reports that the average American spends about 13 hours preparing their taxes. This includes time spent on recordkeeping, tax planning and other tax-related activities.

What Steps Can I Take To Do My Own Taxes?

If you decide to prepare your tax return yourself, you’ll want to take certain steps. First, you should research different online tax software and apps to see which product fits your situation best.

To assist you, we analyze a variety of tax products to find the best of the best. Whether you’re a self-employed person or simply seeking the best tax product for your situation, our tax guides can help you choose.

If you qualify to file your tax return at no charge, you can use the IRS Free File program. Free File is available to taxpayers who earned $73,000 or less during 2022.

Depending on your tax situation, you should ask these questions before committing to any tax product.

• How much does the online tax software or app cost?
• Does the tax preparation company offer a free trial?
• Can the product handle my tax situation?
• How easy is it to use the tax product?
• Does the tax product offer assistance from tax experts if I need help?

After you determine which tax product works best for you, the next step is to gather your tax documents. These may include your W-2, 1099 forms, interest or dividend statements, charitable contribution receipts, investment forms and other documents. Many online tax products allow you to upload or import your documents directly into the tax product to simplify preparation.

If you need assistance, most programs provide helpful tools, answers to frequently asked questions and other guides to help you navigate through the filing process.

What To Consider When Hiring a Tax Expert To Do Your Taxes

Before you hire a tax professional, it’s wise to learn about their education, experience and certifications and licenses. You can do this in a few different ways.

You can start by checking the IRS Directory of Federal Tax Return Preparers online tool. It enables anyone to look up a tax professional’s skills, education and work background. The directory allows you to search by professional qualifications to find, say, an attorney or a certified public accountant (CPA).

The directory also indicates whether a tax professional has the Annual Filing Season Program Record of Completion certificate. This voluntary program provides continuing education for tax preparers who aren’t attorneys, enrolled agents or CPAs.

Once you’ve narrowed your list of possible preparers, it’s a good idea to contact each one and ask certain questions. You should inquire about costs, their preferences for meeting with clients, and availability during the months after tax season. If you have a niche business, you should also ask the tax pros about their experience working with businesses like yours.

Finally, as you research each tax professional’s certifications, licenses and expertise, make sure the person has a valid preparer tax identification number (PTIN). The IRS requires tax professionals to have a PTIN to prepare federal tax returns.