Tax Prep: Benefits and Drawbacks of Self-preparing

It’s that time of year again… taxes!!! Some of you are sitting there dreading the process of gathering the info and deciding if you will take them to a tax preparer or CPA. 

I get it!!! This isn’t my favorite time of year either… as it is tedious to me. As a small business owner and 1099 worker, it gets overwhelming to keep up with the receipts and deductions. 

Then there is the cost. I mean really….it’s expensive to have someone, whether it is an individual or a company (H&R Block), to complete my taxes. I am not a fan of that cost. 

A couple of years ago, I decided to investigate the process of self-preparing taxes. The thought process was that I could save money and become familiar with where we were spending money on the business. 

In my endeavors to learn about self-preparing our taxes I came across some pros and cons. I also tried a couple of different tax sites online before settling on one that I felt was best for our household and business. 

Let’s talk benefits….

The first benefit that comes to mind is the possibility of saving money. Some of the online sites are not entirely free depending on how you file, but there is a chance of saving a significant amount of money when you self-prep. 

Secondly, the idea of knowing what is going on with your finances can be a great way to budget for your household and business. When you self-prep your taxes, you see where the expenses are and where you can save money. This is well worth the cost of preparing your taxes yourself. 

The last major benefit that I would like to share with you is that not only can you see what’s going on with your finances, but you can use this information to set goals for the next year. Setting goals financially ensures that you maintain a budget. When you see how to spend your money, you may find that you have the ability to do more with what you have. 

So, now we go to drawbacks… 

I know, you’re thinking let’s just stop with the positive stuff!! But really, in order to make an informed decision, you do need to think about the not so positive aspects. 

The first drawback is that there is no free help when it comes to self-preparing taxes. Just about every site that offers online self-tax prep will charge for any assistance. This can be discouraging if you aren’t sure of which forms you need. Remember you are using the software, not getting professional tax preparation assistance. 

The second drawback that I found was time. It can be very time-consuming to prepare your own taxes. Even though most of the sites offer a tutorial and a guide, it can be time-consuming if you have more than a simple W-2 income. 

Lastly, the biggest drawback for those who have complicated tax returns is the form accessibility. Some of the forms needed to complete complicated taxes are not available on most sites. It might be to your advantage to research this issue before you commit to preparing your taxes. 

So now you are wondering which site is the best to use for self-preparing your taxes? There is no definite answer to this question. For me, I think it is a matter of preference. Overall, most of them offer the same tools and are about evenly priced. However, for those under $79,000 yearly income, the IRS offers self-prep for free. 

Also, you have to be aware of any hidden fees. Always start out with the free tier and if need be it will direct you to the paid tier. This will depend on if you have a W-2 or 1099 income documentation. 

6 Popular sites for self-filers

1. IRS – e-file.com: The IRS is using a software called e-file for you to use if you meet the qualifications. If your household made $73,000 or less you may qualify for this free guided tax prep software. 

2. H&R Block: Each year H&R Block offers a free online tax filing option that depends on your income documents. If you are a student or young married couple with minimal deductions you may find this site useful. 

3. Turbotax: turbotax is another site that offers free online tax prep software if you qualify. This site is simple and easy to use which could reduce the amount of time that you spend at your computer filing taxes. 

4. TaxAct: This software is through the IRS and does have a cost if you aren’t qualified for the e-file. It is a quick process to find out if you qualify. 

5. Jackson Hewitt: Jackson Hewitt promotes a $25 fee for all filers. I have not tried this site, but it is one of the more popular sites that others use for self-preparing taxes. If you choose to have your refund deposited to the American Express card, you can receive your taxes the same day it is sent by the IRS. However, this card can prove to be tedious. We were not impressed with the card and found it difficult to access our money. 

6. TaxSlayer: TaxSlayer is simple. It is set up for those who have a simple 1040 form but they do offer products for filers who have 1099 as an income statement. 

Whichever way you choose to go with taxes just remember that we do these things in obedience to God’s word. When we obey our laws and regulations we are being mindful of how God directs us to live accordingly. We can find this in Romans 13:1-7.

 It’s not the material world that matters most… it’s living according to God’s Word and His truths. 

I hope this post will Encourage What Matters as you go through the process of tax season.