Paying taxes is hardly the highlight of the year for anyone. That being said, there is no escaping it. The real question is should you prepare your own taxes or get professional help?

The tax world has undergone a revolution of sorts the last twenty years. The advent of software solutions for many of our life tasks has extended into the tax world. Programs like TurboTax allow millions of Americans to hunker down at their computer and have a go at filing their taxes on their own. Ah, but is it smart to take this approach?

Filing your own taxes makes sense if you have a very simple tax situation. Let’s say you have a salaried job as your only income source. Let’s say you rent an apartment. Let’s say you are single with no dependents and no investments to speak of. This is about a simple as it gets when it comes to filing taxes and you probably don’t even need a software program to do it. 

As things become more complex with your finances, the issue of getting professional help starts to become more legitimate. The first thing to understand is the tax code is very complicated. The more exotic your financial situation, the bigger chance there is of falling afoul of it and being audited. That’s the last thing you want. Even if you have paid all the tax due, you will be facing a stressful and expensive experience. 

Personally, I use tax prepares for my taxes. There are a few reasons. The first is a simple one – time. I simply don’t have the time to gather up all my information and do my taxes. A recent study suggests it takes the average American about 31 hours to do their own taxes. I barely have time for breakfast much less that!

The second reason is professionalism. I believe in using someone who knows what they are doing, does it right and can give me advice on how to avoid paying so much next year. This is why I prefer proactive CPAs. Saving money on your taxes is mostly about how you categorize money. This is where a good accountant can help you. 

Finally, I find that a quality tax accountant doesn’t actually count that much. My personal account is very high end and does the taxes for professional sports players. His fees for my returns are still only a couple of hundred dollars. That’s not bad for a lot of expertise. Oh, and you can write off the fees!

There is no right answer when it comes to the question of how to prepare your taxes. If you can afford a CPA, I highly recommend them. If not, using a software program isn’t the end of the world.