What’s the Best Way to Do Your Taxes?

March 21, 2014

By Angie Moreschi

Doing it Yourself vs. Hiring a Professional

Tax time is fast approaching, so if you haven’t already buckled down to get it done, time is running out.  The good news is doing your own taxes is easier than ever.  However, depending on your circumstances, that’s not always the best idea.  So, when should you do it yourself versus taking it to a professional?  Let’s break it down:

Doing it Yourself

The idea of sitting down with an adding machine, receipts, documents, and forms gives most of us a headache, but online tax software programs like H&R Block Online and TurboTax are better than a bottle of aspirin.  They are game changers when it comes to doing your own taxes.  Online programs guide you through the process, helping to eliminate a lot of the confusion and making it much easier than the old fashioned way.

To start, you go to their website and pick a product that fits your needs.  When you login, there are no confusing forms.  The program simply goes through a series of questions – like “What do you do for a living?” and “Do you own a home?” and so on, to figure out what forms you need and the information to fill them in.  With your answers, the computer does the work, automatically fills out the information, and spits out the completed forms at the end for you to e-File.  Voila!  Hopefully, your tax refund will soon be in the mail.

It’s actually free to file for the simplest returns, no matter what service you use.  That generally entails having just a W-2 and using the 1040EZ form.  You can go right to the IRS website or use the free filing option on different online tax software sites.   Depending on the complexity of your needs, both TurboTax and H&R Block have various price levels for everyone else, but the most popular program for homeowners with an average number of deductions generally costs about $29.99.

If you’re computer savvy and have a fairly straightforward return without complex financial arrangements and deductions, using the online software is a good option.  You do have to have patience and be somewhat organized, but it is certainly the cheapest route.

Using a Certified Public Accountant

Certified Public Accountants can come to the rescue when individuals and businesses have more complicated returns.  “When you start adding the other schedules, when you have mortgage interest and children and you might have dependent care, that’s when you want to try and add a tax professional,” suggested Tampa CPA Michele Overbeck.

Overbeck seems to enjoy the process that drives most of us crazy.  Her fingers punch numbers into her adding machine at lightning fast speed.  Some clients bring her neat boxes of paperwork; others come in with bags of receipts and just let her organize it all.

“Mom’s still working. Dad’s retired.  How much of dad’s Social Security is taxable?  Filling out that form sometimes makes people go ‘Aaaaaaah!’” she said, joking about the frustration over confusing tax laws.

CPA’s must pass a rigorous exam and maintain 40 hours of continuing education a year, which help in finding credits and deductions you might miss.

“I have a client and she has a lawn care business, and there are fuel credits for her business. She didn’t know.  Or they might manage a restaurant and drive all over the state.  They only get reimbursed 30 cents a mile. Well, the IRS guideline is higher than that, so they might be able to take a credit for that.”

Another benefit of using is a CPA is that they are available year round and can help you develop tax strategies that will save money in the future.  A good rule of thumb to consider is that a CPA can offer helpful tax advice in a year when you have a life changing event.

“Getting married, getting divorced. Those type of things. Sometimes you might want to wait a month or you might want to hurry it up,” Overbeck explained.

According to a 2013 study by the National Society of Accountants, the overall average cost for a CPA to do a tax return is about $200.

Going to a Tax Preparation Business

Professional tax preparation services like H&R Block, Liberty Tax Service, and Jackson Hewitt offer another option, if you hate the idea of doing it yourself.  “Everyone gets confused. The law is constantly changing,” said Jose Martinez, the Client Services Leader at the H&R Block on Armenia Avenue in Tampa.

Franchise tax services are very convenient for folks who need help.  They open in shopping plazas and malls all around town during tax season, but most are not open year round.  You can make an appointment or even walk in off the street without an appointment.

“People anticipating a refund want to be here first,” Martinez chuckled.  “And those individuals who have to pay, come in last.”

Martinez says that while most H&R Block employees are not CPA’s, they do undergo yearly training to stay on top of all the tax changes and are prepared to help clients find credits and deductions.

H&R Block charges customers per page, per form they fill out.  Martinez says the average customer spends about $175 at his office, less if their return is simpler.  “If you come in with a 1040EZ and it’s really a 1040EZ, it’s $40,” said Martinez.

Paying Uncle Sam

Whether you go it alone or rely on a professional, it really depends on the complexity of your return and your comfort level with computers and numbers.  Either way, it’s best not to procrastinate, especially if you’re getting a refund!

Angie is an investigator for the James Hoyer Law Firm.  You can catch her Consumer WISE reports every Tuesday on Bay News 9 in Tampa and Central Florida News 13 in Orlando.