Filing your taxes: DIY or hire a professional?

Considering whether to complete your taxes yourself or hire a tax professional? Here are some pros and cons of each to help you decide.

Do it yourself

Pros:
Save money. You can likely save money if you do your taxes yourself. Anyone can file electronically for free at IRS.gov, or you can use online software (for a fee).

Increase your financial fitness. As you review your taxes, you may find small changes you could make, such as maxing out your IRA contributions or donating items for a tax deduction.

Cons:
Time. If you file your own taxes, be ready to commit more time than if you hire a tax professional, especially if you work for yourself or own your own business.

Risk of error. Even if you use tax preparation software, you may miss a deduction or take one that turns out to be incorrect.

Hire a professional

Pros:
Peace of mind. Your tax professional should know the tax laws and stay updated on anything new – something you might not have time, or interest, to do.

Audit assistance. In the unlikely event you are audited, your tax professional may work with you to prepare or work with the IRS directly on your behalf. Be sure to understand whether they offer these services and the amount they charge if you need them.

Cons:
Cost. Cost can be a drawback if you are considering hiring a professional to complete your tax returns for you, especially if your tax situation is complicated.

Must plan ahead. When is a tax professional's busiest time? Tax season. So, you'll likely have to schedule an appointment in advance and definitely not at the last minute.

The choice ultimately comes down to the complexity of your tax situation, comfort level, effort you are willing to put forward and cost.