The Pros and Cons of Filing Your Taxes Online vs. with a Professional (2024)

FAQs

Is it better to file taxes yourself or by a professional? ›

The Bottom Line. Individuals with a single employer and few investments may save money by preparing their taxes. Those with business income or rental properties will find hiring an accountant worth their peace of mind and potential tax savings.

Speed - Filing your taxes online is generally faster than filing with a professional. You can complete your tax return in a matter of hours or even minutes, depending on your situation. Cons: Complexity - Filing your taxes online can be complicated, especially if you have a complex tax situation.

Cost: Hiring a tax professional can be expensive, particularly if you have a complex tax situation. Limited control: When you hire a tax professional, you are relying on them to make decisions about your tax return, which can limit your control over the process.

Disadvantages of Electronic Filing

You need to attach statements. You file decedent returns. Your form's “additional information” section is too small. Data loss is a possibility.

A CPA, or certified public accountant, is a person who has obtained licensing to practice as an accountant through a combination of educational requirements and exams. They may specialize in certain fields of accounting, such as taxation.

Filing your return electronically is faster, safer, and more accurate than mailing your tax return because it's transmitted electronically to the IRS computer systems.

What are the benefits of e-file? E-file is faster, easier and more accurate than filing a paper return. E-file makes compliance with reporting and disclosure requirements easier by eliminating the need to make copies, assemble all of the appropriate schedules and attachments, and pay for postage.

So, if you're not very confident that you can file a 100% accurate and correct return, it might be a good idea to hire a tax pro. While it is still very possible to get audited even if you do file with a professional, your odds are lower because of their familiarity and expertise of the filing process.

What is an advantage of hiring a professional to file your taxes? ›

In terms of missed deductions or triggering an IRS letter or audit; a tax professional can help eliminate errors and ensure your returns are prepared correctly. You benefit with money-saving tax planning. Tax professionals can advise you now and all year round on the best strategies to make smart tax-saving decisions.

TurboTax is only licensed for personal use, and it is not compliant with IRS regulations for paid preparers. Intuit offers ProSeries, ProConnect, and Lacerte Tax software, which are IRS-compliant for tax professionals who are filing multiple returns.

The process involves the storage of highly sensitive financial data electronically. A hard disk crash could lose all data; an unethical hack could potentially make one incur massive losses, and so on. Security is one of the biggest concerns that come with e-filing.

The IRS maintains that filing returns electronically can prevent mistakes and lower the odds of an audit. The error rate for a paper return is 21%. The error rate for returns filed electronically is 0.5%.

E-file is the best way to file an accurate and complete tax return. The tax software does the math for you, and it helps you avoid mistakes. technology. The IRS has safely and securely processed more than 1.2 billion e-filed individual tax returns since the program began.

Not only is the process usually more efficient than commuting to your tax professional's office, it's often less expensive as well. Depending on the details of your return, you may even be able to file it for free.

If you have "a complicated tax situation with dependents, investments, or significant assets or charitable contributions," then hiring a professional might be helpful, said Business Insider. That is because "the more transactions you have, the more things you need to take into consideration."

Paying More Than You Should: One of the downsides of doing your own taxes is that you could end up paying more to the government than you would if a professional did your taxes for you. This is because they know the law much better than you do and can find all of the tax breaks you qualify for.