Personal Finance
January 23, 2018

Should You Do Your Own Taxes Online?

Written By Mary Beth Eastman
Last updated February 14, 2019

Note: We receive a commission for purchases made through the links on this site. Our sponsors, however, do not influence our editorial content in any way.

Simple. Thrifty. Living.

Everybody has to pay taxes. But figuring out whether you should do your own taxes or hire an accountant to help you is a question that is particular to your specific circumstances. It’s also worth it to ask yourself every year whether or not you should do your own taxes, because financial situations can change over time. You have the option of using one of the best online tax services or through the IRS website or hiring a qualified tax preparer to file for you. Here are some tips to help you decide which option is right for you.

It’s best to do your own taxes if you have a fairly simple financial situation. This means you don’t have any dependents, investments or significant assets, and you don’t own your own business. Tax preparation software is made for people in this situation, because it is very straightforward and doesn’t account for many deductions and other factors. Check out reviews, such as our Turbo Tax review, to find the service that meets your needs.

You also need time and patience in order to do taxes. The IRS estimates that you’ll want 16 hours to prepare your basic 1040 form. This involves gathering all the necessary paperwork and figuring out your expenses and deductions, etc. It’s also important for you to feel confident navigating the software and confident that you are submitting your taxes without any errors or oversights.

If your household income totals over $200,000 per year, it might be in your best interest to hire a professional. Sometimes, they can help you get the biggest refund. However, the rate of audits is much higher for those with an income over $200,000, and in the event of an audit, you want to make sure your whole financial situation is covered as thoroughly as possible.

It’s also best to work with a professional if you have had a major life change in the last year, such as getting married, buying a house, having a baby, etc. All of these events impact your tax filing and will need to be documented on your taxes. A professional can show you the best way to do it.

If you have a more complicated tax situation that involves dependents, investments, contributions, etc. or if you run a business, you’re probably best off working with a professional who knows the guidelines for all of these scenarios. The same applies if you are planning to itemize your deductions and take more than the standard deduction. This can be a red flag for the IRS, so you want to make sure you are properly calculating everything.

Doing your taxes online is much cheaper than hiring an accountant — professionals will generally cost $100-$200 or more depending on your income and other variables. But hiring a professional can help take some of the pressure off if you have a complicated tax situation and aren’t sure how to properly file yourself.

About the Author

Mary Beth Eastman

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.

  • No comments yet. Be the first to get the conversation started. Here's some food for thought:

    Do you have any thoughts?

Submit a Comment

Your email address will not be published. Required fields are marked *