The tax deadline will soon be upon us. In the past, I’ve put off filing my taxes to the last minute. Unfortunately, this means I scramble to get them done, possibly missing additional ways to save and creating lots of unnecessary stress. One of my New Year’s resolutions this year is to file my taxes as soon as I can.
If you’d like to join me in getting them done early then you should know that you really have 3 options when it comes to filing your taxes.
Option 1: File Taxes Through an Accountant
This is the easiest option of all. But it comes with two downsides. First, it is the most expensive option. In 2014, the average tax preparation fee was $273. I can think of a lot of things you’d rather spend your money on than a tax accountant. Then again, if you have an extremely complicated tax situation, you may find that this is the best route to take. The second downside is by turning it all over to an accountant, you remove yourself from the process to a certain degree. I believe in self-sufficiency, so I think as much as possible, it is best to take charge of things yourself. That leads to opportunities to learn more and to become more self-reliant.
Option 2: File Taxes Yourself
You may think that this is the option I recommend. After all, it’s free. It also gives you total control over the process. However, I do not recommend filing taxes manually by yourself. Why? The IRS estimates about 20% of manually filed taxes contain errors. That’s a 1 in 5 chance. Scary. It is just too easy to make a mistake if we do all the math and paperwork by hand.
Option 3: File Taxes Through an IRS-approved Software Program
This option is the winner in my book. Why? It combines the best features of options 1 and 2 while minimizing their downsides. If you file your taxes through an IRS-approved software program, you will pay a lot less than through an accountant. In fact, Turbo Tax even has an option for free filing for simple federal taxes. My tax situation is more complicated because I am an expat who works for a foreign company and I simultaneously run my own business, but even I only pay about 50 dollars for TurboTax’s deluxe package to handle all those extra details. And the IRS estimates that only 1% of taxes filed through programs like TurboTax have errors, making them 20X safer than trying to file by yourself and making them comparable to filing through an accountant.
My favorite feature of TurboTax is their Audit Risk Meter, which reviews your entire return and lets you know if there are any red flags. I also love their live on-screen help to answer any questions that pop up as you work.
With the deadline just days away, whether you choose option 1, option 2, or option 3, you need to get started right away! Good luck, and here’s to a big refund this year!