Should You File Your Own Self Employment Taxes?
Tax season is creeping up and it’s the time of year that many self-employed people dread. From getting organized to going through the filing process and finding out how much you owe, you can spend quite a bit of time, money and energy filing your taxes every year.
It’s no secret that you can file your own self-employment taxes, but should you? Here are some pros and consider to consider.
Filing your own self-employment taxes has quite a few benefits which make it understandable that some people would prefer to take the DIY approach.
Filing your own taxes is definitely cheaper than paying someone else to do it for you. Individuals and couples can easily spend hundreds of dollars on tax preparation but when they DIY, they can keep that money instead and just pay for a basic filing software program.
Ensure You’re Receiving Tax Breaks
When someone else files your taxes, you run the risk of them not catching all the tax deductions and credits you may qualify for. When you’re self-employed, it’s easier to miss deductions and saver’s credits because there can be multiple options to consider. When you file, you are more likely to comb through every detail to make sure you don’t miss any benefits.
Become More Financially Conscious
Another benefit is that you will naturally gain a better understanding of the tax code and become more financially conscious. For example, you’ll know how much and which types of donations to write off and you’ll see the benefit of maxing out your retirement accounts first hand. You’ll get to have a closer look at your finances and understand the tax situation for your income bracket better.
Of course, there are a few drawbacks that come with filing your own self-employment taxes which is why some prefer to just hire a professional.
For some, filing their own taxes is pretty inconvenient. While being able to file your taxes is a good skill to have, it will require lots of time and energy to learn the process and constantly be up-to-speed on the latest tax code changes. If you run a business and are already short enough on time as it is, it may seem more convenient to simply hire someone to file your taxes and save yourself a headache.
Chance That You Might Miss Something
Another reason why you might want to hire someone to file your taxes instead is for fear that you might miss something or make a huge mistake leading to several problems in the future. If your situation had gotten more complex over the years and you can barely keep up and stay organized, it’s probably better to choose a professional to look over everything and file for you.
If you know someone who comes highly recommended or who has done an excellent job in the past, you can feel rest assured that the individual is skilled and will keep your best interest at heart when it comes to doing your taxes.
Nowhere to Direct Your Questions
While online tax filing software is cheap, it doesn’t always come with the best resources or customer service. Say you have quite a few questions about your taxes or are unsure if you qualify for a specific deduction.
That would be the perfect time to deduct your questions to your accountant. If you don’t have one, you run the risk of making a huge mistake and being audited for it.
To each his own when it comes to taking the DIY approach or outsourcing when it comes to filing your taxes. It’s best to look at your current situation and needs to determine the best option for you.
If you think you might want to file your own self-employment taxes in order to save money, make sure you invest in a class first that will teach you the right procedures or even consider working with an accountant for the first year or two to make sure you do everything properly.