Should you Prepare your own Taxes?

This year, I paid to have my taxes done.  I had been preparing my own taxes since my Mom shut down her tax service many years ago.  I finally got fed up with doing my own taxes and went into H&R Block.  It was a positive experience and I wish I had of done it years ago.  Now, I am kicking myself for all of those years where I had to suffer through late nights with a calculator at the deadline.

Getting the Maximum Refund

This Man Hates Taxes

Image by QRRTY

One thing I had always suspected was that I wasn’t getting the maximum refund when I did my own taxes.  That was confirmed this year when I got a much bigger refund than last year.  So, I had my 2010 taxes reviewed by the Second Look program and I will probably get more back.  Even though it cost quite a bit to have my taxes done, I was losing considerably more money by trying to do it myself.

The biggest mistake I was making was by taking the personal deduction, instead of itemizing.  I didn’t think I had enough deductions to itemize, but the H&R Block agent showed me a number of items I didn’t realize were deductible.  This boosted my refund quite a bit and made me realize how much money I had lost.  I own a house, have investments and a family, so it’s a lot of work to do my taxes.  There are a lot of schedules and forms and it’s easy to mess up.  I should have gone to a professional years ago.

Taxes are Way Too Complex

I’m a pretty sharp guy and was the top student in my college Algebra class.  I program computers all day and solve dozens of difficult problems in a typical week.  But, I made a couple of errors on my past taxes that created problems for me with the IRS.  Luckily, I didn’t owe them any money, but I had to fill out extra forms to straighten things out.  I am so glad I had my taxes done this year, to reduce the chances of errors.  The last thing I need is to waste time dealing with the IRS.

The IRS is Antiquated

The IRS should create an online tax filing website, like most of the sates have.  Instead, they have fill-in PDF forms, which are difficult to follow and easy to make mistakes.  If they weren’t stuck in the stone ages with their technology, it would be easier for individuals to do their own taxes.  I honestly think they are keeping accountants, tax preparers and the post office in business.  The IRS spent billions of dollars trying to upgrade their computer systems a while back, but that was a colossal failure.  They have no incentive to modernize or make things easier for taxpayers.

The Bottom Line

The bottom line is that there are some things you should have done and some things you should do yourself.  If you are spending too much time with taxes and you aren’t getting the maximum refund, you should have your taxes done by a professional.

“The taxpayer – that’s someone who works for the federal government but doesn’t have to take the civil service examination.”

Ronald Reagan – 40th President of the United States

Recommended Reading

Barbara Friedberg – Why I usually do my Own Taxes
Green Panda Tree House – Two Ways to Make Money
Thousandaire – What if you Don’t File your Taxes On Time

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