Equifax

Finance Blog

Filing Taxes: DIY or Hire a Tax Pro?

Written by Eva Rosenberg on March 29, 2013 in Tax  |   1 comment

I started my tax career in a national CPA firm a long time ago. What shocked me about filing taxes with this particular firm was that it was charging $250 to prepare a simple tax return. What’s the big deal? Back then, $250 got you…

filing-taxes-diy-or-hire-a-tax-proI started my tax career in a national CPA firm a long time ago. What shocked me about filing taxes with this particular firm was that it was charging $250 to prepare a simple tax return. What’s the big deal? Back then, $250 got you a nice two-bedroom apartment. Today, that same apartment would run about $2,000. Get it?

So I wrote a book about how to prepare your own tax return and offered $10 workshops to the public to teach people how to do it themselves. (This was long before DIY tax software—or even PCs.) A funny thing happened. No matter how much I simplified it, most of the people at those workshops insisted on paying me to prepare their tax returns.

The world is very different now. The IRS and a variety of tax software developers have teamed up to provide free tax software designed to help about 70 percent of taxpayers file their tax returns. Yet while many people will qualify for free filing, there are still some circumstances where you’ll need to enlist the help of a tax pro.

Who should always use a tax pro?

1) People with extensive securities investments, especially when the investments are spread over different accounts, IRAs, and other retirement vehicles.

There are certain overlapping transactions that might take place in these accounts that the IRS would consider “wash sales.” No losses on those transactions would be permitted. A good tax pro would catch something like that.

Working with a qualified tax pro can also help you identify which lots of securities to sell before you sell them. This would give you the most tax-beneficial gain or loss, depending on the holding period and basis (tax cost).

2) Business owners always, always, always (did I say “Always?”) should work with a tax pro in their corner. Frankly, anyone who does not is leaving money on the table and is apt to have the business fail within the first five years. Why? Either the business will fail due to disorganized management, or it will fail due to tax problems that likely will result from messed-up payroll taxes, sales taxes, and income taxes.

Not only can a good tax pro help you with tax issues but most of us also know a lot about business management, operations, and break-even analysis. Plus, we have community contacts to help build your sales and cut your costs. We may even be able to help you get financing when your business needs it—or before.

3) Folks who want enough money on which to live when they retire. This doesn’t just include IRAs and 401(k)s, it also includes all sources of income-producing assets that will allow you to live comfortably for the 30 to 60 years after you stop working. Tax pros can help your family avoid estate and gift taxes when consulted before the transactions take place.

Tax pros are actually pretty useful people. We have knowledge, experience, and contacts. Check out a previous article of mine for more guidance on finding the right tax pro.

Eva Rosenberg, EA is the publisher of TaxMama.com , where your tax questions are answered. Eva is the author of several books and ebooks, including the new edition of Small Business Taxes Made Easy. Eva teaches a tax pro course at IRSExams.com and tax courses you might enjoy at http://www.cpelink.com/teamtaxmama.

1 comment

  1. Thomas-Avery Blair, EA says:

    I’ve found that providing “wealth retention through preparedness and your tax pro” got considerable attention in my local newspaper.

    I think it might be time to get Eva Rosenberg, EA to develop some small business tax seminars on audio/visual media. Sell them wholesale to EAs and let the EAs provide them then to their own clients…kind of like an introductory course that the individual EA could “customize” to the specific small business owner/operators’ specific goals and needs.

    Kudos to Taxmama Eva. :)

    As ever,

    Tom Blair, EA


Leave a Comment


Name :


Commenting guidelines

We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.

Some other factors to consider when commenting:
  1. Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
  2. All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
  3. We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
  4. Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
  5. Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
  6. Stay on topic. Your comment should be concise and pertain to the specific post in question.
  7. Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
  8. Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.

Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.


Tax Archive

Stay Informed Sign up for our FREE Equifax email Newsletter