Should I pay an accountant to do my taxes? What are my options to protect me if I do them myself but make an error?

March 1, 2009 6:33 PM

Should I pay an accountant to do my taxes? What are my options to protect me if I do them myself but make an error?

Ideally, I would like to do my own taxes. However, I have several W2s, some self employment income, a period of 2008 when I was still a full time student, etc...these things make one's taxes that much more complicated.

I did a test run of my 2008 taxes online using H&R Block software. There are a bunch of things on the return I have questions about and I'm wondering if it would just be better to go to a professional. It would cost at least $300.

Is the peace of mind offered by a professional accountant worth it or is it better to learn it oneself? How "dummy proof" is this software? I'm not sure how to handle the questions I have...I guess I'm really afraid to make a mistake and get dinged with back taxes at some future date! I feel that what I really need is a second set of eyes to review my return and check it for errors and also to make sure I didn't miss any deductions...is there any service that offers to check your return for errors without charging a full fee for completing it?

posted by mintchip to Work & Money (10 answers total)

Conservatively, is the discrepancy from accidentally overpaying taxes (i.e. not getting as much of a refund as you could possibly get) and not paying for an accountaint greater than the cost of an accountant?
posted by Nanukthedog at 7:30 PM on March 1, 2009

I also use TaxCut to do my taxes. The questions and options are all pretty straightforward, even for the years when I was partially in school/partially unemployed/partially employed, lived in two different states, etc. If you have the Premium version of their software you're entitled to one free tax consultation with a live person, either over the phone or through email. I've never had to use it but it seems like it'd be a good way to resolve any questions you might have after you're done.
posted by xbonesgt at 7:56 PM on March 1, 2009

I can't tell you which is the right choice for you, but W-2s and self-employment are not complex tax situations. Each additional W-2 is only an extra line on your taxes, nothing more. Similarly for self-employment.

A good tax prep program will handle your situation with no difficulty. I haven't used H&R Block's software, but Turbotax has fairly good explanations of each item. If after reading an explanation, you still don't get it, you can either go to the IRS site or (if your taxes are simple, which yours appear to be) realize that you are probably overthinking the IRS's question.

If you have specific tax questions, like "what do they mean on the 1040 line X about Y," you can either ask here or call the IRS help line.
posted by zippy at 7:58 PM on March 1, 2009

The advice my dad gave me on taxes was that the less you make, the less likely the tax man is going to nickel and dime you. Think about it- if you stiffed the government out of a hundred bucks (accidentally or otherwise) the cost for them to go after you would probably well exceed $100. If you were a full time student for even part of 2008, I'm guessing your income isn't extremely high and is therefore less likely to attract attention.

I use TurboTax. So do a gajillion other people and I've not run into any horror stories. Do the software, do the best you can, and at the end they offer to have a pro check it, so you can do that if you so choose. You'll be fine. It's just taxes. All ~250 million Americans have to do it.
posted by JuiceBoxHero at 8:27 PM on March 1, 2009

I had a painful run-in with the tax system some years ago. It was a funny case in which I lived and worked in one state but was carried on the payroll of a company in another state for a few years. It worked fine for several years, then one of the states went a bit crazy. Navigating this was really hard because the rules were vague, the employer probably did the wrong thing, and my leverage was zero. I struggled for a year to get it resolved, but each conversation was more and more Kafkaesque. Finally I hired a professional tax guy. He listened to me, he figured out the rules, and he went with me to the meetings, where he completely blew the state bureaucrats out of the water. After that I realized how completely baroque the tax system is and how vulnerable I am to getting clobbered because I'm not an expert and don't have the time to become an expert.
posted by nygeek at 8:54 PM on March 1, 2009

I pay an accountant to do my taxes, despite my taxes being 'simple'. Doing my own taxes is way above and beyond my comfort level.

I also had a run-in with the IRS. In my case, it was completely my fault; I trusted a 'friend' for bad tax advice instead of going to a professional or calling the IRS directly. He's been my accountant for a couple of years now, and he's great.

Now that I can afford to, I have someone file my taxes for me. Whenever I try to do them myself, I just give myself a huge anxiety attack. It's worth the $$ he charges for the piece of mind.
posted by spinifex23 at 9:12 PM on March 1, 2009

Unless you have a complex situaton, Turbotax online is the correct answer.
posted by rr at 9:54 PM on March 1, 2009

I prefer TaxAct or Turbotax myself over H&R Block's software. Most of the online options allow you to input everything for free and don't make you pay til the end, so you can put in the numbers on multiple sites and see if the results line up before you take the plunge.

I did my own taxes until a couple of years ago, even when I lived in multiple states, had W-2s and 1099s, and had self-employment income. I switched to a pro when I started multiple businesses and had a change in my financial situation that involved dividend and capital gains income. Before that, I used Turbotax online and never had a problem.

If you are uncomfortable or nervous about doing your own taxes, take them to a professional. Or just do the upgrade to the premium or pro or whatever version that each tax program has online. They usually include a review by an accountant and some protection if they screw up.
posted by bedhead at 1:54 AM on March 2, 2009

My taxes are fairly more complicated than yours and I've used TurboTax Online for years. Your accountant is going to essentially fill in the forms for you on a similar piece of software.
posted by mkultra at 5:35 AM on March 2, 2009

I use TurboTax to do my taxes, which includes multiple W2s during some years and always some self-employment income, and I'm also a part-time student for part of last year. No big deal.

Last year, TurboTax's program asked a question that was unclear, and I did not pay enough in state taxes. I called them up to complain, the customer service guy verified that their question was the problem, and they refunded my filing fees, which almost matched the amount I had to pay in additional fees and penalties. They also fixed the program, which I noticed when filling in my information this year. Their customer service hooked me--I know that their program is reliable, and I know that they'll stand behind it if, for some reason, anything goes wrong.
posted by peanut_mcgillicuty at 5:48 AM on March 2, 2009