On the fence about hiring a tax professional, buying tax prep software, or just filing taxes yourself? Let’s compare them!
Pros and Cons of Tax Prep Software
Tax preparation software is a great way to do your own taxes in a way that offers subtle guidance. So let’s talk about the pros and cons.
The pros: tax software is affordable, speedy, and (if you got a good one) easy to use. Purchasing software will always cost less than hiring a real-life CPA or another tax pro. And this price is tailored to your tax needs. If you have an easy return, without lots of property dependents, and business accounts to reconcile, you will pay much less than someone who does have assets in all of these areas that need to be accounted for.
As for speed, once you’ve collected all the necessary information, doing your taxes using tax prep software should very rarely take you more than an hour. And most software is straightforward, instructional, and user-friendly.
Many of the cons of tax prep software will be pros for hiring a tax professional and vice versa. Using tax prep software means that you are going it “alone” in a sense – while the software may have helpful tools and insights if you get stuck, it doesn’t have the human touch and knowledge that a trained tax preparer will.
Tax prep software also isn’t as well-equipped to handle more complex questions. And with all the COVID aid and new tax rules present in tax years 2020 and 2021, it’s much more likely that you’ll need some extra help navigating those changes.
Pros and Cons of Hiring a Tax Pro
Hiring a tax pro comes with its own unique perks. One pro of paying someone else to do your taxes is that you don’t have to do them! But besides that, professional tax preparers often have much more advanced (and expensive) tax software they use to make sure your taxes, corrections, and TIN checking are done correctly and accurately.
Arguably the biggest pro to hiring a tax preparer is the human touch element. When your tax situation deviates from the norm (and let’s be honest, whose doesn’t?), a tax professional will likely have the knowledge you need to get through that sticky spot, or they’ll know exactly where to look to find the solution. This also means that tax pros have insights that could save you money or increase your potential refund.
Similarly, accountants and other tax professionals are able to answer any questions you have year-round. This can help you when you are trying to work through financial issues that occur outside of tax season.
There are some cons to this route as well, though. Hiring a pro is more expensive, and more time-consuming. You pay for that extra experience and time the tax pro will use to make sure your tax returns are error-free. It’s also slower than software because you have to gather all your tax documents, pass them on to your accountant, and then wait for them to complete them. Since you are likely not the only person whose taxes are being done by the pros at any given time, that means your refunds may be a little slower in getting to you.
What about Filing Taxes Yourself?
There are plenty of ways for you to file your taxes without the assistance of software or professionals. If you are confident in your abilities – or you just don’t relish the thought of shelling out any money for these resources – you can always forgo these options.
However, the deciding factor in choosing how to get your taxes done should always be the complexity of your financial situation. A moderately complex tax filing situation could mean the difference between a refund and a penalty. As the US Tax Code and IRS protocols change, so does your tax situation.
Why Not Get the Best of Both Worlds?
No matter your filing situation, eFile360 can help. We assist business owners, accounting personnel, CPAs, HR professionals, and independent contractors across the U.S. by e-filing, printing and mailing forms or corrections for you in a quick and affordable way. Our team combines the pros of both tax software and hiring a tax pro to give you a hassle-free filing experience.
When it comes to hiring a tax pro, eFile360 is the perfect blend of affordable tax software and human touch. Sign up for a free account today.