Should you prepare your own taxes?

Should you prepare your own taxes instead of paying someone else to prepare them? Personally, I think you should prepare them yourself. The IRS allows you to prepare your returns on their site for free provided you meet their income requirement. This year, Turbo Tax is also allowing you to prepare your Federal Income tax return for free on their site.

If you don’t want to prepare it online or don’t meet the IRS’ income requirement, then you can purchase Turbo Tax or one of the other tax preparation software packages that are available. I personally use Turbo Tax and have used for several years. Turbo Tax has a “Guide Me” feature on it that basically runs you through each income and deduction category in a good bit of detail. The program is not hard to use. One thing you do need to have is your records. Make sure you have all of your Forms W-2, 1099-B, 1099-INT, 1098, etc., as well as all of your deduction records, medical bills, tuition payments, etc. If you have a small business or a rental property, make sure you have those records as well. If your state requires you to file a state income tax return, you can also get that from Turbo Tax. Make sure when you buy the program that it includes the free state download. Otherwise, you have to buy it. When it gets done with the Federal return, it asks if want to file a state return. You can then download it from their site for free, if you bought the one with the free download or you can buy it and download it then.  It takes the information from your Federal return to compute your state return. It will also ask you about situations that are unique to your state and if they apply to you.

Then, start going through the program using the Guide Me method. It will ask you questions about your filing status, your dependents, your income, etc. As the program goes along, it shows you up on top whether you are going to be receiving a refund or are going to owe money. The amount changes as you add income and enter deductions. Don’t be afraid to try and do your own taxes. The key is to have good records. Remember even if a tax professional prepares your returns, you are the one liable for all the information on the return. If they make a mistake, you are the one that pays for it.

 

 

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