The Downfalls Of Preparing Your Own Taxes - Why You Should Use A CPA

We all have that friend who files their own tax return each year and winds up with a big tax refund and they make the whole process look so easy, don't they? It's enough to make you want to do your own tax return and save all that money you might have spent on a CPA, and just treat yourself to something nice with it instead. Unfortunately your friend who prepares their own tax returns has probably been doing it since they could write and has a natural gift both with numbers and presenting information correctly - not everyone can do that. These are the same types of abilities you'll find shared by most CPA's you meet or do business with; they understand how tax returns work far more than you could.

So when it comes to doing your own tax returns each year is it a good or bad idea? We all know the benefits of doing your own tax return but have you ever considered why it might not be a good idea? You might want to save yourself a few bucks by doing your own returns but the downside to this is you could cost yourself an awful lot more.

Using Software

No doubt you've seen a whole lot of computer and online tax preparation programs advertised to "make your annual return easier" but the quality of these programs varies so much that, unless you're a trained tax professional, you'll have absolutely no idea whether your return is being completed correctly or not. If you've ever sat down in front of “Turbo Tax” for example, you'll know exactly what we mean - it's far from simple and far from straightforward.

Know The Rules

Are you 100% familiar with the current 72,000+ pages of tax rules which exist right now and will have no problem implementing those rules as they apply to you in your tax return? Are you also fully aware of all the most recent changes in the tax codes? Of course the answer to these questions is "No" but that doesn't deter tens of thousands of people from just giving it (their tax return)their best effort and hoping they don't make a mistake. Remember that if the IRS agent reviewing your return can't make any sense of it, then you're going to wind up facing the ‘main reason’ why doing your tax returns can be a bad idea which is...

The IRS Audit

People think that the IRS just audits people at random and it's all just the luck of a draw. Now while there is a certain element of randomness to their selection process the vast majority of people the IRS wind up having to audit are...people who completed their own tax return. More often than not it's not a case of these people trying to hide anything or telling outright lies but because they didn't understand how to correctly file their tax return it left the IRS with no choice but to audit them. If you need no other reason to hire a CPA to prepare your tax return for you then avoiding an IRS audit is more than enough reason for doing so.

So the biggest problem with preparing and filing your own tax return is that the margin for error is usually too high to make it worthwhile in many cases. Paying for a CPA to prepare your taxes for you might seem like wasted money but it does pretty much guarantee your return will go off without delay, and then you can just sit back and wait for your tax refund check instead!