Thank you to Dave Ramsey’s Endorsed Local Provider program for sponsoring this post!
“You’re an accountant, why are we paying someone to do our taxes?!” my hubs stated as I told him I was preparing our tax spreadsheet in order to send to our tax accountant. He has a right to be confused; I mean we are paying back over $30,000 for my accounting degree, so why would I not do our taxes?
I used to do our taxes, even when my hubs had his business I did it for a little while, but now as a mom to two wild boys, I just do not have the brainpower left to tackle our taxes. I have no shame in hiring someone to help complete tasks that I simply do not have the energy to do well anymore.
If you are faced with a similar predicament – to hire a tax accountant, or to not hire a tax accountant, here are some questions to help you decide.
1. How valuable is your time and how much time do you have?
It is estimated that it takes the average American who files a 1040, about eighteen hours to prepare, complete, and file their taxes. Even before our taxes got a little complicated due to our business adventures, it would take me at least sixteen hours to file our taxes. That is a lot of time to spend slaving over numbers, tax laws, and putting the numbers in the correct places.
Tax software programs make it easier to file your taxes, and depending on how simple your return is, it may be your best and cheapest option. Trust me; tax code is not an easy thing to understand. Whenever I have a question, I call one of my best friends who is an actual tax accountant for advice on what to do. Once I started calling her more and more, I realized it is was simply not worth my time to do our taxes myself. My time will always be more valuable than my money.
2. How computer tech are you?
Once again, tax software programs do make this part easier, but if you have a complicated tax return (by complicated I mean more than just a W-2), it takes a little computer knowledge to correctly complete and file a 1040. There are several forms to download, complete, save, and organize correctly.
3. How much can you afford to spend?
This is was my hubs main complaint, spending money for someone to prepare our taxes when I have the ability to do them for us. Being an accountant, I weighed the costs of having an accountant versus using a tax software program. For us, the tax software we would need would cost the same as our accountant (if you are looking for ways to save on your taxes, my Simple Ways to Organize Your Taxes post will give you the details of how I keep our costs low). Therefore, my time heavily outweighs the money spent to have my taxes filed for me.
4. How confident are you after the fact?
This is the most important question to ask, how comfortable and confident are you that you filed your taxes correctly? Once our taxes got more complicated, I was no longer as comfortable that I had filed a return correctly. Some tax software programs do offer a free audit report to double check that you completed your return correctly; however, I was still not convinced that my return was prepared 100% correct.
If you decide you do need to hire an accountant, where do you start? I recommend hiring someone who you not only feel comfortable with but someone who has great communication skills. Before we were married, my hubs used an accountant that was just awful. She held onto his taxes for nine months, would not pick up the phone to call us back, would not respond to emails, and we even called the businesses around her to see if she was still in business because we could never catch her there. Eventually, I found her Facebook page and contacted her there. Communication is key, do not settle, if your accountant does not communicate well, find one that does. (Remember, the Affordable Care Act will affect our taxes, so make sure you get your questions answered!)
I personally love the convenience and security of finding a tax professional through Dave Ramsey’s Endorsed Local Providers program. Dave’s ELP program will connect you with a tax professional in your area to help answer your questions and to help you file your return. It makes the whole process of finding a reliable professional easier.
Now is the time to get your taxes prepared and filed – do not wait until April to start the process as you are only making more work on yourself. Decide whether to use a tax accountant and keep your taxes organized in order to save yourself time and money.
How did you decide if you needed to use an accountant or not?
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Sharon Rowe says
Visiting from #fellowshipFriday and I just thought your article was brilliant, I think the main point was number 4, without this you should stop.
Jessi says
Thank you Sharon! I couldn’t agree more. 🙂
Amy says
This is something I’m always happy to pay someone else to do. (Okay, “happy” may be overstating it a bit…) For me it all comes down to your 4th point about confidence. Tax law/policy is not something I know much about, but it is something I want the person doing my taxes to be an expert it. This became even more important when I started my small business several years ago, and our filings became more complicated. Also, I like having the accountant to help out and back me if we’re audited or have any problems after our taxes have been submitted.
Jessi says
Agreed Amy! 🙂
Jayleen @ How Do The Jones Do It says
We used a tax accountant for many years when we owned rental property and then a side business and the job seemed daunting to me. Things are much simpler now and I’m proud to say we’ve saved the $300 to have our taxes done the last few years. I am confident and actually excited to do it again this year! It may change in the future but, for now, we’re saving money!
Jessi says
That is awesome Jayleen!
Trish says
Great post! I also have an accounting degree but do not prepare my own tax return. I am not a tax accountant and they way they keep changing tax laws it is to time consuming to keep up.
Jessi says
Agreed Trish! Tax law makes my head hurt and I’d rather pay someone to prepare it for me.
Sarah Mueller @ Earlybirdmom says
I would never dream of doing our taxes myself or with software (although I’m financially savvy but not an accountant). My accountant is fabulous – he makes house calls every year to drop off our returns and explain them to us. He answers simple questions throughout the year – for free! The peace of mind I have knowing that a professional prepared our return is so worth the $300-$400 we spend.
Jessi says
I agree, peace of mind is priceless! 🙂
Janelle @ Run With No Regrets says
Great tips! Last year I used a professional and realized it was completely unnecessary…so I will have to really think about whether I can just take care of them myself.
Visiting from the SITS Sharefest!
Laurie @wellkeptwallet says
LOVE this, Jessi! We get ours done too. They’re not terribly complicated, but we’ve had our same guy for nearly two decades. He charges us less than $150 and we’re in and out of there in less than 30 minutes. Some things are worth paying for.
Jessi says
Agreed Laurie! You can’t put a price on peace of mind. 🙂
Kalyn Brooke | Creative Savings says
I used to do our taxes myself, but then we added a rental property and my blogging business, plus my husband also does a bit of real estate on the side — it caused me so much anxiety to file {and file it right}, that we finally broke down and took our taxes to a CPA. I can’t even begin to describe the relief I felt after that!
Tanya @ Mom's Small Victories says
I was an accountant (but not a tax accountant) and have kept up my CPA license. I’ve always done our taxes through TurboTax but now that I am considering blogging for profit, I might need some professional advice. Do you mind me asking how your blog business is setup , a sole proprietorship or LLC? Thanks for sharing with #SmallVictoriesSunday. Hope you linkup this weekend, new linkup just went live!
Jessi says
I have it set up as a sole proprietorship for now. My plan is to have it set up as an LLC by the end of this year. 🙂
Meg says
I do our taxes. I’m not the biggest fan of doing them. I also don’t add anything I deem as complicated. I keep our filing as simple as possible. I put our w2s and kids in and that’s that. I don’t try to get crazy with deductions … While I’m sure we could walk away with more money if we had an accountant do it I don’t have patience for an appointment. When I worked I had a lot of friends tell me I needed to have so and so do my taxes … “My tax guy” can get you back a ton of money and it all seemed so shady. If I don’t have solid proof in my hand of what I’m filing then I don’t do it. That way if I’m audited then I hand them exactly what i put in. I did file with an account once but was only because I had to file injured spouse and that was beyond me, so for us until our taxes get more complicated I’m too cheap and lazy to go to an accountant.
Jessi says
I truly believe in the simple file! 🙂
Sarah says
I do our taxes. They are complicated and involve clergy taxes, including a housing allowance; a rental house; educational credits; and a small business. I’ve found Turbo Tax to be the only program to handle clergy taxes. What I do to help me is I keep the receipts and paid bills that I think I need for taxes in an accordion file by category. When tax time comes around, all I have to do is total them up. It’s amazing what keeping everything can do for deductions. For example, keeping mileage saved me about $700 in taxes. I do a little bit at a time and start in December. It takes organization, dedication, and time, but it can be done.
Jessi says
That’s awesome Sarah!
Amber says
I pay someone to do my taxes. She works for a local tax service and I don’t spend more than $40 for her services. I only have one W-2 but I just don’t have the knowledge or the patience to deal with all of the tax laws. 🙂
Kenneth Gladman says
I think these are great questions to ask. I have tried doing my taxes myself and it is very time consuming. It was a stressful process that I just didn’t want to deal with again. I think this year we will go with a professional service.
Westly Smith says
I think that your third question is the most important. When I make a decision on whether I need a tax professional, I usually ask myself how much money I have to spend. I like how you mention the time it takes to do taxes. For me, that’s the debate: time or money?
Paul Langley says
This is some really great advice for anyone considering hiring a tax professional. I especially liked your final point, about your confidence in your abilities. For the longest time I filed my taxes myself, but after I started my own business and was trying to figure three different sources of income at once, I decided it was time to bring in the big guns. Thanks so much for writing!
Vivian Black says
I had no idea that it is estimated it takes the average American eighteen hours to prepare and file their taxes. It is also a good tip to consider how good with computer technology you are when deciding whether to file yourself or not. I also appreciated the advice to hiring someone who has great communication skills; this will make the whole process easier and less stressful.
Selene says
Awesome post, definitely some great tips and advice! Hiring a professional can help save you a lot of time and stress, especially if you have children and a job to keep your hand full already. Thanks for sharing!
McKenzie says
These are wonderful tips, thank you for sharing! I think the tip about how much time you have is so incredibly important.
Selene says
Great post! It’s definitely a great idea to hire a professional if you simply do not have the time or are too tired to do your taxes yourself. Thanks for sharing!
Selene says
Great post! Definitely some excellent tips and advice to keep in mind. Especially asking your self how confident you are that you have filed it correctly. Having a professional handle it is always the best option in my opinion. Thanks for sharing!