by Kay Mortimer

Created on: August 16, 2008   Last Updated: August 20, 2008

It's been said that we must die, and pay taxes. We can't change the first, but what about the latter? To prepare your taxes and pay the least legal amount of tax, your choices include: do the return yourself by hand or with software, or pay a professional to do it. Which to choose?
Although the cheapest route seems to be doing your own taxes, we know cheapest is not always best. You must decide. Here are some suggestions.

If you know tax law, you might do your own return for low cost. Obviously, the by-hand method requires you to have forms, instructions, pen, and calculator, along with all your tax documents.
Even if well-versed in tax law, this method leads easily to mathematical mistakes. Double-check your return carefully.
Another popular option is to buy inexpensive tax software. Some are marketed to make you think that, without tax law expertise, you can complete your own return accurately.
The danger here is missing several items, deductions, or key tax laws as you prepare your own return. As a Tax Professional with over 20 years' experience, I witness this too many times.
One recent example involves clients who required amended returns to fix their problems. She purchased software and prepared separate returns, only to find that they needed amending. Although hers was due to additional information, her spouse's was prepared illegally by the software. She trusted the software. She shouldn't have.
Itemized deductions were entered and were to be split between the two of them on their separate returns. U.S. tax law requires that, on separate returns with one spouse itemizing, the other spouse must itemize as well. This well-known software allowed her to itemize deductions, and gave him the standard deduction on their separate returns. This was not only incorrect, but illegal.
I immediately found this, brought it to their attention, and filed amended returns. This is only one example of many I have experienced. Many times tax credits or other tax issues were not handled properly.
If you do not know tax law, you can easily prepare illegal returns. The risks are not worth it, in my opinion. The best advice may not be to prepare your own returns, especially with increased IRS audits springing up everywhere in the U.S.
So, is paying a professional to prepare your return always the best option?
Maybe yes, maybe no. In recent years, tax professionals pop up from everywhere. I suggest being wary of "used car lots", "insurance agencies", and "finance companies", for example, claiming to prepare taxes. Most of these businesses have ulterior motives, and many never attend classes to stay abreast of tax law. Trusting them can be dangerous.
However, the vast majority of tax professionals, including most CPA's, EA's (Enrolled Agents), and unenrolled preparers, seek to prepare accurate returns. All CPA's and EA's must complete continuing education hours per year, forcing them to remain abreast of tax law changes and ethics. Many unenrolled preparers also attend classes to know the law. Seek out true professionals for the preparation of your taxes.
Although even the best preparers can sometimes make a mistake, the norm is that upstanding tax professionals truly care and strive to prepare accurate returns for their clients.
Seeing the dangers of self-prepared returns, I recommend looking for qualified, experienced tax professionals to complete your tax returns. Otherwise, the IRS might come visit you. Why risk it? Who needs the stress? Trust the professionals who know taxes.

Learn more about this author, Kay Mortimer.
Click here to send this author comments or questions.