The tax season has come to an end. And you must have already filed your taxes. But have you ever felt that the process has become too cumbersome? As a result, have you asked yourself whether you want to do your own taxes for the upcoming year or would you rather hire a tax accountant or take the help of a tax software to do the job for you?
While both options are viable, it is always better to hire a tax accountant. This is because filing taxes is a complex process and expert advice can help you sail through the tax season. Say for example, if you need general medical advice, you can always visit various websites. However, if you need to pay attention to a specific medical condition, you may want to visit a physician or a specialist. Similarly, a tax expert can seamlessly guide you through your problems.
Another reason why you should hire a personal tax accountant toronto is because a professional always remains updated with the latest changes in the tax regime whereas a software may not. However, it is not to say that filing taxes through software could be detrimental to your prospects. In fact, it could be a good choice for a simple tax return. However, it won’t be the best choice if you want a detailed return.
In this article, we have analyzed the pros and cons of these taxation services for you, so you can choose the best option:
Tax Software
If you are looking at filing a simple tax return without too many complications, tax software could be the best choice for you. It is a very popular option for individuals who want to file their own taxes.
Its algorithm is built in such a way that it will deduce on its own whether you are eligible for deductions or not. That way, you won’t have to hire an expert to tell you what tax returns you are eligible for. However, the software can only suggest deductions based on the information you provide.
Advantages of Tax Software
Cost Effective
Tax software is a cost-effective solution to your tax return issues. Since you are paying a lesser amount compared to an expert’s fees, you can save up on the money and invest it in other important aspects of your business.
Quicker Turnaround
If you hire a tax accountant, you’ll have to wait for their time. But if you are filing taxes on your own through a software, you get a quicker turnaround for your returns.
Ease of Use
While filing the returns, the software will ask you questions. All you have to do is answer them and provide relevant information. The software will take care of the rest for you.
Disadvantages
Lengthy Process
You have to figure out every component of your tax returns on your own. If you are not comfortable with the entire process, you might spend hours trying to sort out your returns.
A Tricky Business
An accountant will know exactly how to compile your financial information. You can trust that he will be detail-oriented and have an eye for tax planning. But filing taxes with the help of software might prove to be tricky. Whether you own a small or mid-sized business, you might face difficulties in handling complex tax issues which might then lead to further complications.
Chances of Inaccurate Data
No matter to what extent you rely on software, a small bug or a mistake in compiling information can lead to inaccurate filing of your tax returns. So if your input is not correct, it may prove to be a very costly mistake.
Hiring a Tax Accountant
Before we delve into how a tax accountant can offer you professional solutions, we want you to consider the following circumstances:
- You rent out your own property
- You are starting a small business
- You own a lot of shares at various companies
- You are retiring and diluting your stake in a business
If any of these or a few of these circumstances apply to you, you may want to opt for a professional tax accountant to file your returns.
Hiring an expert will take the burden of filing taxes off your shoulders. Professionals are trained to handle all kinds of complexities so you don’t have to worry about any potentially inaccurate answers. In fact, you can set up a meeting with an expert to discuss matters in detail while you get first-hand insights and tips on how to file your taxes efficiently.
Advantages of Hiring a Tax Accountant
Knowledge and Expertise
Accountants become experts in their field by virtue of working with various clients on different tax-related matters. While tax software rely on algorithms to calculate your taxes, accountants bring years of experience to the table apart from their well-rounded skills.
Valuable Insights
As already mentioned, a software can only offer you solutions based on the information you provide. However, a tax accountant can provide you professional insights and valuable advice on how to handle your taxes.
Trustworthy
Often taxpayers are unsure about whether they can trust their accountant with sensitive financial information. However, these fears are unfounded on most occasions. This is largely because accountants have their own reputations to protect. As a result, they will keep your information private and offer you the best solutions.
Disadvantages
Expensive
As mentioned earlier, using a software will cost you much less in comparison to an accountant’s fees.
Delay in Tax Return
If you are using software, you can file your returns the moment you get the tax forms. On the other hand, it might take you longer than usual if you are hiring an accountant. This is because you need to make an appointment before providing the experts with relevant information. The professionals might take a few days’ time to give you the best solution.
Human Error
Accountants might be experts in their field but human error can occur at any time. Even a small error can prove costly.
Hiring a tax preparation expert: Hiring a tax preparation expert might prove to be a tad bit more expensive but then it will save you a lot of time. If you don’t have the patience to sit through the tedious process of filing your returns, an accountant can get the job done for you. This way, you can utilize that time to focus more on your business and probably make profitable deals.
Besides, unlike a software, an accountant won’t rely only on the information you provide. They will try to take into account your business deals, employment type, lifestyle and many other aspects, including major financial changes in your life, before giving you holistic advice.
Summary
If you are choosing tax software, there are high chances that you might make a mistake with your limited knowledge of filing returns. That small error could prove to be an expensive mistake and you might end up losing a large sum of money. So hiring a tax accountant is always worth the effort. They have a better eye for detail as compared to you while calculating your deductions. With their level of expertise, they will also be in a better position to deal with complex tax situations.
However, the one thing that you should be aware of is never to opt for “file taxes for free” services. This is because you will have a tax return with minimal or no deductions.
