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SALT LAKE CITY — Tax season began on Monday and the IRS has officially begun the long project of processing tax returns for millions of Americans.
Tax filers have until April 15 to turn in their needed paperwork and information in order to get a refund on time. With employers sending out W-2 forms with income information, taxpayers are beginning to consider what their best options are for filing. The following is an overview of different preparers available, and how to decide which will be the most effective:
Free filing through the IRS
At a gross adjusted income of $66,000 or less, free filing software options are available through the IRS. These processors allow for easy online tax filing for those with less complicated financial situations for free.
According to the Free File Alliance, an estimated 70 percent of American taxpayers qualify for free filing. While this is the cheapest way to file taxes, it is the least convenient and should be used by those with a solid understanding of paying taxes or those with simple financial situations and few sources of deductible income.
Tax software
Tax preparing software cuts down on time and costs for individuals with less complicated financial situations. Some main reasons to consider utilizing a tax software rather than a CPA include:
- Speed: If all necessary documents are present, taxes can be completed on one’s own in less than an hour. Good accountants can take anywhere from several days to weeks to process and file all tax forms.
- Price: CPAs often charge at least $200 to file taxes, while tax preparing software ranges from $10-120, making it a far more attractive option cost-wise.
- Simplicity: For those with few deductions, sources of income and investments tax preparing software is far easier.
- Turbo Tax
- H&R Block
- TaxAct
- TaxSlayer
- Liberty Tax
- Intuit
- 1040Now Corp.
- FileYourTaxes.com
- TaxHawk
- OnLine Taxes
- Free Tax Returns
- EzTaxReturn.com
- Drake Enterprises
A Certified Public Accountant
Despite lower costs and greater speed associated with filing taxes alone, professional assistance will add a lot of convenience and reduce the risk of human error. Some reasons to utilize the help of a CPA include:
- Better software: Accountants pay quite a bit more for their tax filing software, which is far more sophisticated than that which is available to consumers. There is less chance of error present to impact a tax return under these optimized programs.
- Reduced human error: People make mistakes, especially those who aren’t well versed in finances and taxes. Accountants are trained professionals, often with both undergraduate and masters degrees focused solely on accounting and ensuring that taxes are done properly.
- Human touch: Developing a relationship with an accountant can ensure that the person filing taxes understands their client’s financial situation and future goals. The value of their advice may far exceed even that of a consultant.
- Convenience: Taxpayers with a lot of investments, dependents, or complicated business situations may be able to figure out how to do taxes on their own, but their time might be better spent on other matters. Accountants can save time and ensure that complicated tax filings are done correctly.
- Year-round assistance: Accountants can offer assistance and answer important questions throughout the entire year, not just during the annual consultation.
There are multiple ways to go about filing taxes, and which one is best is entirely dependent on the lifestyle and financial situation of the tax filer. When picking a means by which to file taxes, consider how the service will best compliment individual needs.
