Answer:
Save money.
Have peace of mind.
Gain financial insight.
Explanation:
1. Save money. Hiring an accountant can be costly, and you can save a bundle if you choose to do your taxes yourself. Furthermore, anyone can file electronically for free via the IRS website. No matter how much your adjusted gross income (AGI) is, you can fill out and submit tax forms online, available via the IRS website. And if your AGI is $57,000 or less, the IRS will provide you a list of multiple companies that will guide you through the process. After your federal return is complete, they will transmit it electronically to the IRS for free. However, be aware that some of these companies will have additional restrictions beyond AGI and may charge you to file your state return.
Another option is to file using a 1040EZ. If you meet the requirements to file this form, some tax preparation companies, such as TurboTax, will complete your return for free.
2. Have peace of mind. I have always had a tough time trusting my tax return to an accountant. Not only are they overloaded this time of year, but you could make an error communicating pertinent information, such as neglecting to inform them of key deductions.
However, if you have a complicated return that requires you to fill out and file multiple forms, make sure you have a thorough understanding of the entire procedure. Otherwise, you are better off with the assistance of a professional.
3. Gain financial insight. An additional benefit to preparing your own taxes is that it will give you a closer look at your finances, and what effect certain saving options have on your return. For instance, I never realized the amount of money you can deduct by making tax-deductible donations until I started filing my taxes on my own. In fact, depending on your income tax bracket, donating unwanted items could be more beneficial than selling them.
I also learned to max out my IRA contributions each year to fully take advantage of that credit.
