It’s one of the toughest questions faced by a non-tax savvy business owner and individuals everywhere: do I do my own taxes or hire someone to help me? Often, this comes down to whether or not you have the time, resources, and ability to pull it off yourself versus if it’s worth your money to pull in backup.
Worse, there’s no one answer. Obviously if you’re inexperienced at doing your taxes and you suddenly have a huge change in life (unprecedented profit, wedding, kids, bought a house, etc.) then it may behoove you to hire someone to help if you have the money. But even then there’s a grey area: perhaps you want to use the headache inducing experience to learn how to do it all on your own next year.
There are benefits and problems with both routes, and depending on your unique situation you may be swayed to either side of the fence.
Doing Your Own Business Taxes
Obviously the biggest problem with doing your own taxes is the issue of accidentally leaving something out. This could be disastrous for your pocketbook, as it may result in you losing out on a big tax refund or even cause you to owe a chunk to the IRS.
More than that, though, it’s not being up on current tax law that hurts you. And I don’t mean within the last year; tax law changes all the time. You could read all the time and still miss something. A qualified tax attorney or accountant would know all this information and know how to get you the most refund or tax breaks possible.
However, the big advantage to doing your own taxes is you save money, at least initially. Hiring an accountant or going to a tax office costs a chunk of change, especially if you have really difficult and complicated taxes. The more complicated they are, the more it costs. Doing them your own also means subsequent years you save money on hiring an accountant as well.
Hiring an Accountant
A survey last year showed that small business owners were spending two full weeks on preparing federal taxes alone.
Getting help for your taxes comes with the advantage that you don’t have to worry about spending this time on something you hate – unless, that is, you choose the wrong person. Then you may find out the hard way they “forgot” to file your stuff or scammed you. You have to be very careful to evaluate the accountant you hire. If you do them yourself, you at least know they’re done.
If you don’t have the money to hire an accountant, you really don’t have a choice anyway. They can be expensive. However, there’s something to be said about simply having more time to do what you’re good at. When you hire an accountant, you’re freeing up your day to run your business instead of pulling out your hair doing taxes. It’s a luxury, but if you can afford it, well worth the money, especially when that big refund comes in!