5 Advantages to Doing Your Own Taxes

Depending on the complexity of your personal situation, hiring a tax professional can be a pricey prospect. A 2014 survey conducted by the National Society of Accountants (NSA) revealed $273 to be the average cost of a professionally prepared tax return (state return plus a 1040 including itemized deductions). The stat dropped to the neighborhood of $159 if only a 1040 Form (sans deductions) was required [source: Rickard].

By comparison, do-it-yourself tax preparation services are much cheaper. The simplest returns can often be filed for free. About 70 percent of taxpayers qualify for the Free File program, by which people can electronically file taxes at no cost using certain government-approved companies. To do this, your income must be no more than $60,000 per year [source: IRS]. If your income is higher than that — or if your return is too complicated for the free options — there are numerous services to choose from that will run you from roughly $15 to $40, depending on the service and exactly which forms you need to file.

Modern tax programs are incredibly user-friendly to people of all technological capabilities. Whichever service you choose, they'll walk you through the process in a plain language, step-by-step manner. So you probably don't need an accountant if you're planning to file a 1040EZ or 1040A. Before you begin, however, it's vital to have all of the pertinent documents and details in hand. Failure to include all of your income information or missing a big-bucks deduction will require you to file an amendment, which will take time and money I'm sure you'd rather conserve.

It's critical to note that do-it-yourself tax software is not necessarily appropriate for everyone because tax situations vary by size and scope. If you own a couple of properties, have inherited some assets, are an avid investor or engage in other tax-complicating activities, it might be best to consult a professional to cover all your bases and make sure your return is complete.

When you take matters of the tax type into your own hands, you're in charge. Master of your own destiny. Able to pull the trigger (or click the mouse) at will. But when you turn the intimate details of your financial life over to a tax professional, it's possible to wind up waiting, waiting and waiting some more. Tax pros simply have a lot on their respective plates during crunch time, and it's easy for your financials to get stuck on the back burner in favor of more complex (read: lucrative) clients, or simply lost in the shuffle.

By opting instead for full control, you can easily determine when you file, and by extension when you start the refund or payment process. If you're due a refund but you didn't hand your materials to your accountant until mid-March, you might be waiting quite a while for it as he or she tries to juggle all the other clients. If you do the taxes yourself, you don't have to wait your turn. And the time it takes to do it is not that long either. One reviewer who compared three different tax services found that it took between 31 and 54 minutes to process her federal and state returns, depending on the service she used [source: Botkin].

I know, I know, taxes aren't exactly a sexy, fun topic. Seriously, when's the last time they came up in conversation at a party (well, a fun party, anyway)? Be that as it may, you should have a good grasp on your financial situation, on a monthly and annual basis, so that you know how much you have to work with and whether your situation is changing for the better or worse with each tax year. Learning more about the process will also help you identify the best ways to legally avoid or reduce your taxable income, such as establishing retirement savings accounts like a 401(k) or individual retirement account (IRA), making charitable contributions or writing off home-based business expenses.

Just because you use a tax preparer doesn't mean you'll automatically get a bigger refund. If he or she doesn't ask you the right questions, it's frighteningly easy to miss out on lucrative deductions and credits. For instance, if you replaced your heating and air condition system during the year but your tax preparer doesn't happen to ask about it, you may lose out on a credit or deduction.

You don't necessarily have to enroll in community college to learn the ropes, though. Talking to friends in similar situations and doing a little light tax reading is enough to get you on the path to personal tax accountability. Your tax software will also ask you about life changes to guide you as do your taxes and steer you to potential credits and deductions.

Most tax professionals are awesome, reliable, knowledgeable people. But as with many professions, there's always potential for running into a less than ethical "expert." The IRS routinely investigates people who profess to be pros (certified public accountants, enrolled agents, tax attorneys) but who really aren't. They falsify deductions, income or dependents in an effort to produce a larger refund for their clients and alter documents, among other offenses.

And apart from that, sharing your financial information with anyone, for any reason, carries some inherent risks. Even the most ethical, conscientious preparer can fall victim to a hack or break-in.

That's another reason why some of us prefer to handle tax returns on our own. It's possible that you could wind up making a tiny error or two, but my guess is you're not likely to try to embezzle your own money. So if you're the type who prefers to avoid potential drama, it might be best to file your tax returns from the comfort of your own computer, where you can keep your own eyes on your own money.

Just be sure it's a secure WiFi connection, or else it defeats the purpose, OK?