Should You File Your Taxes Yourself or Hire a Pro?

tax return

When it comes to filing taxes you ultimately have two choices: do your taxes yourself or hire a professional. In either instance, it’s safe to say that everyone dreads the task. To help you decide if you should do your taxes yourself or call in a professional, tax expert David Stewart recommends you consider the following.

When Should You File Your Own Taxes?

While filing taxes may seem tedious and stressful, you may want to consider filing your own taxes if:

  • You keep track of transactions and receipts: In other words, you’re a numbers person and keep track of spending and expenses, and have everything organized. You know your financial situation best.
  • Your tax situation is simple: If you only worked one job, don’t have any dependents and no other sources of income, filing your taxes on your own will be simple.
  • You don’t own property or investments: When you own property or acquire investments, it can be hard to stay current on everything. Property and investments come with deductions and credits that can benefit your taxes.
  • You understand tax law: If you are knowledgeable in finance and tax law, and are up-to-date with the IRS standards, then filing yourself may be your better option. You can also save yourself time and money that hiring a professional requires.

When Should You Hire a Professional?

Hiring a professional to do your taxes is a great option if:

  • You don’t keep track of finances: If tracking spending and staying in the loop with transactions isn’t something you’re good at, then hire someone to help.
  • You don’t understand tax laws: Tax professionals stay current on tax laws and know how handle your specific situation.
  • Check for mistakes: We all make mistakes, but you want to avoid them when filing taxes. Hire a tax expert to serve as your second pair of eyes to ensure you file correctly.
  • You started a new business: If you just opened your first business, you will have business taxes to file. By hiring a tax expert they can help you find deductions and guide you in the right direction when filing.
  • You got married, divorced or had a child: If you’re recently married or divorced, and/or had a child, you may want to consider hiring a professional to help you determine the best filing status for that year.

Ultimately the decision is up to you whether to hire someone or do your taxes yourself, and is really a matter of what you’re comfortable with. If you’re comfortable doing your own taxes, then file yourself and take advantage of saving time and money, among other things. But if you can’t keep up with finances and don’t understand taxes well, hire a trustworthy professional to help.

 

5 Things You Should Know about Tax Evasion

tax evasion on calculatorDid you know that one of the most common federal tax crimes is tax evasion? While no one is necessarily thrilled about paying taxes, taxes are a part of our infrastructure. Failing to report taxes, reporting them inaccurately or failing to pay them is not only unfair to other citizens, but is a criminal offense that can be costly. Is someone you know facing tax evasion charges or do you simply want to have a better understanding of the subject? If so, check out this tax evasion information from businessman David Stewart.

1.  Tax Evasion is Illegal

Tax evasion is the most commonly charged tax crime. It is an illegal practice in which an individual or a business knowingly underreports or doesn’t report income in an effort to eliminate or lessen their taxes. A few common examples of tax evasion include businesses and employees underreporting income because they deal largely in cash (such as hair salons and waitresses), and families overstating the size of their home in order to receive a larger deduction.

2.  If Caught, You can Face Criminal Charges

Tax crimes are usually found during audits, as auditors are trained to look for signs of tax fraud. If you are caught evading, you may face criminal charges and substantial penalties. However, to be charged with a crime, the IRS has to prove that you intentionally underpaid your taxes.

3.  There is a Difference between a Simple Mistake and Deliberate Fraud

There are instances in which individuals or businesses make innocent mistakes when filing taxes. These will necessitate paying what you owed, but you will not face penalties and other charges. The good news is that most auditors will be able to distinguish innocent errors from intentional ones.

4.  Tax Avoidance is Not Tax Evasion

While the terms seem synonymous, they have different meanings. Tax avoidance lowers your bill by arranging your transactions so that you receive the largest possible tax benefits. As a citizen, you have the right to lessen the amount of taxes you pay, but only if it is done via legal means. Tax evasion, however, is a deliberate attempt to reduce the taxes you owe by misrepresenting your income and is illegal.

5.  An Attorney can Protect You

If you are accused of tax evasion or related charges by the IRS, it is imperative that you hire an attorney who specializes and is experienced in tax fraud and evasion to protect you.