The 2019 tax season (when Americans file returns for the 2018 tax year) is the first year that many rules from the Tax Cuts and Jobs Act of 2017 take effect.
For some people, the new law simplifies tax filing. For others, things just got a lot more complicated. If you’re in the latter camp (or not sure where you stand), you may be wondering whether it’s time to hire a CPA or tax professional.
A tax pro is likely your best bet in several situations, including the following:
The cost of hiring a professional averages anywhere from $176 for a federal and state return with no itemized deductions to $457 for a federal and state return with itemized expenses and income from a business, according to data about the 2016 tax season from the National Society of Accountants.
However, fees can go much higher depending on where you live, the experience level of your preparer, and the complexity of your return.
If you go the tax software route, you may have a simple enough return to file for free. But chuck in a few complications (such as a Schedule C), and a service like TurboTax can charge you about $160.
You may be wondering why you have to spend so much money to file your taxes. It’s painful to acknowledge, but tax filing could be a lot simpler and cheaper. The current system, which passes the time and cost burden of filing taxes to the American people, persists partly because, as an opinion piece in The New York Times (Wirecutter’s parent company) notes, tax-preparation companies like H&R Block and Intuit lobby Congress to maintain the status quo (though there are many other reasons).
But with no major change on the horizon, we want to help you make the best of the current system.
We’ll discuss situations where your return might be simple enough to tackle on your own, some scenarios where bringing in a professional might be worthwhile, and how to find a reputable pro when you need one.
Just keep in mind that when you sign your tax return, you become responsible for everything on it—even if someone else prepared it.
by Janet Berry-Johnson, Wirecutter | Read more:
Image:Sarah MacReading
[ed. See also: Why millions of people are getting hit with a surprise tax bill this year (Vox)]
For some people, the new law simplifies tax filing. For others, things just got a lot more complicated. If you’re in the latter camp (or not sure where you stand), you may be wondering whether it’s time to hire a CPA or tax professional.
A tax pro is likely your best bet in several situations, including the following:
- You’re self-employed.
- You experienced a major life event, such as getting married or moving to a different state.
- You own rental property.
- You have foreign accounts or investments.
The cost of hiring a professional averages anywhere from $176 for a federal and state return with no itemized deductions to $457 for a federal and state return with itemized expenses and income from a business, according to data about the 2016 tax season from the National Society of Accountants.However, fees can go much higher depending on where you live, the experience level of your preparer, and the complexity of your return.
If you go the tax software route, you may have a simple enough return to file for free. But chuck in a few complications (such as a Schedule C), and a service like TurboTax can charge you about $160.
You may be wondering why you have to spend so much money to file your taxes. It’s painful to acknowledge, but tax filing could be a lot simpler and cheaper. The current system, which passes the time and cost burden of filing taxes to the American people, persists partly because, as an opinion piece in The New York Times (Wirecutter’s parent company) notes, tax-preparation companies like H&R Block and Intuit lobby Congress to maintain the status quo (though there are many other reasons).
But with no major change on the horizon, we want to help you make the best of the current system.
We’ll discuss situations where your return might be simple enough to tackle on your own, some scenarios where bringing in a professional might be worthwhile, and how to find a reputable pro when you need one.
Just keep in mind that when you sign your tax return, you become responsible for everything on it—even if someone else prepared it.
by Janet Berry-Johnson, Wirecutter | Read more:
Image:Sarah MacReading
[ed. See also: Why millions of people are getting hit with a surprise tax bill this year (Vox)]
