During tax season, there are many different thoughts that go through the minds of taxpayers. Some examples might be:
- How much am I going to have to pay this year?
- What am I going to get back?
- What can be done to lower taxable income?
- You mean I have to work so hard, only to have so much taken from me?
- Ugh! Working on taxes is like getting a root canal!
Yeah, I think we can say that while some people might look forward to tax season, it’s not really a reason for excitement for most folks. It’s not like the annual ritual of getting together for a Super Bowl party. Tax return party, anyone?
Back to the list of examples above. What resonates with me, after writing that, is that preparing one’s taxes can be a different experience for different people. Some people have very straightforward, simple financial lives – and correspondingly simple tax returns. Others who have various income sources and investments, property, and different dependent situations – well, their taxes can be much more complicated.
For me, it boils down to this: I pay a CPA to do my taxes.
Now, as a reader of this blog, you might be wondering: “What? Don’t you really like to save money?” Well, even though I sure do like to save money, I will pay to have taxes done for me. When it comes to the question of DIY or pay, I think that it can often be a worthwhile move to pay someone to get something done for you.
There are a variety of reasons I think it could be worthwhile to pay a CPA to prepare your tax return. Here are 3 reasons why:
Saving Time on Taxes
I don’t know about you, but I have the belief that time is more valuable than money. We can have all the money in the world, but we can’t make more time. That’s not to say money isn’t important, as you’re not likely to have me go that far, anyway 🙂 But our time isn’t free, and there is an opportunity cost to it. If taxes will take you a long time to do, then it can be worth considering paying a professional instead.
Specialized Tax Knowledge
Tax professionals should, one would think, know more about the tax code than regular folks like us. If we wanted to get a root canal – you know, that fun procedure to which I compared taxes earlier in this post – we would go to a dentist or endodontist. It’s not like we would really know how to do that on our own! So why not hire a pro to do taxes? Sure, it may be more necessary for some than others. When looking at tax rates by country, some pay more than others. Some tax codes might be more simple that others. Here in the U.S., it’s often complex enough for a lot of people and their own situation to make it worthwhile to see a pro.
Fewer Mistakes on Tax Returns
There is something about the power of practice and habit. If you’ve never done something before, or only a few times, you may not be that great at it. If you’ve done something 1000 times before, you should be less likely to make mistakes, all things being equal. Along those lines, a professional might be less likely to make mistakes than someone not thinking about taxes for a living.
Bottom Line: There can be times when it might be worth it to pay a professional to do your taxes. I’ve decided that this is indeed the case for me. What about you?
My Questions for You
Do you get your taxes done by a professional, or do you handle it by yourself?
Why do you take the approach you do?
If you do taxes on your own, how low would tax preparation fees have to be to get you to have someone else do the work for you?