Tax Software vs Accountant: Which Tax Prep Method to Pick?

For many years the only way taxpayers had any chance of properly dealing with their taxes without stress was to turn to an accountant. However, since tax programs entered the picture, taxpayers have divided into two groups: those who would rather do their taxes on their own with the aid of software and those who still prefer having an accountant by their side. Although accountants and tax prep solutions are both capable of creating accurate tax returns when provided with the right documents, there could be instances when the choice between the two options isn’t as black and white as it seems. As such, before making the big choice between an accountant or a tax program it’s best to take into consideration certain aspects to ensure that you pick the service that’s right for you and will score you the biggest refund possible.

Key aspects in choosing the right service

Complexity of tax situation

The most important thing to do before choosing between a certified tax expert or a dedicated tax prep program is to evaluate your tax situation and think about how complex it is. In that regard the formula is rather simple: the more complicated a tax situation is the more mistakes that taxpayers – with less knowledge on the subject – might make if they decide to handle their taxes alone. Simply put, it’s best to turn to a professional in special cases like if you own a business, are buy a new home, or involved in major life changes. However, if there isn’t anything notable to report, nothing has dramatically changed since the last tax year, or you have a very ordinary life with one job and a rented home, then a tax program is perfectly enough.

Tax-savviness

Tax software is pretty convenient in the way that it allows its users to go through different tax situations via a series of thorough questionnaires, helping them to fill out the necessary forms on their own in no time. But no matter how straightforward the interview questions may be, if you cannot interpret and understand what they’re asking then you’re still going to end up stumped. In other words, the moment you feel overwhelmed and confused, just forget the DIY method and leave the tax prep work to a professional.

Costs

For many taxpayers one of the most crucial points when choosing a tax service is price, and in that manner tax software wins by a mile. Not only are they significantly cheaper compared to the average $176 that accountants ask for their services, but those who only have to file a simple tax return won’t have to pay anything aside from any additional fees like the cost of state returns or the pay-by-refund option. In fact, even the most expensive tax programs typically have price tags below $100 – and these are the solutions that cover virtually all tax situations that someone might encounter. Yet best of all is how there is no need to pay for the software until it’s time to file.

Human interaction

Despite their speed and convenience, tax programs are definitely for filers who are confident in what they are doing and, therefore, need little to no help. While there are means of asking questions from the tax experts at the company – whether via email, phone, or live chat – often receiving an instantaneous answer is unlikely, especially when the tax season is over. However, certified accountants may also only communicate via email or phone only, but they are at least always available during business hours and there is still the option to meet them face to face, which as it turns out is still quite important for many taxpayers.

Additional services

Preparing taxes is already intimidating for some taxpayers, but having to deal with an IRS audit or an identity theft investigation will give the chills to even the most tax-savvy people. Thankfully, both accountants and tax software companies provide preventive services to take care of such uncomfortable situations.

However, there are a few key differences. For instance, the audit service of a certified tax expert is a bit better because unlike tax software providers they will not only prepare you for the audit but they can also represent you if necessary. But when it comes to ID theft protection, it’s tax program companies who come out on top as they do everything in their possession to keep you out of trouble or – should the damage already be done – help you clarify yourself as soon as possible.