April 18th is looming, and while the early-risers and high-achievers have already cashed those refund checks, the rest of us are twiddling our thumbs wondering which way to go with our taxes this spring. Do we hand it over to the professionals or is it a DIY kind of year? Are we crazy smart or just plain crazy? Either way, it’s time to start making a decision because the clock is winding down.
For all the head-scratchers out there, we have crafted a brief list of questions to help you determine the right direction this spring.
A serious consideration. Tax season brings about an unnerving amount of stress, and unless you have a punching bag handy, you might want to take into account the amount of dessert readily available. Swear you aren’t the type to stress-eat your way through the back half of your refrigerator? A nice fudge sundae still provides the brain break required when tackling a year’s worth of finances (and subsequently realizing how many hours you had to work to pay good old Uncle Sam). If your freezer’s empty, forego the challenge, pack up your files, and head to the nearest CPA.
Did 2021 bring you a spouse, a child, a new job, a new home, a second home, large medical expenses, or substantial changes to your retirement or investments? If any of these scenarios apply to your situation last year, it is probably best to consult an expert who can help you navigate any corresponding tax implications. These big life moves tend to empty your bank account, but at tax time, they can help pad that refund, so make sure you aren’t leaving any money on the table.
For business owners and freelancers of any kind, it is usually best to leave the end-of-year tax wrap-up to the professionals. The amount it costs to employ their services typically pays for itself through their added expertise in finding deductions. Business dinners, phone bills, mileage, continued education and skills training: it all adds up. Just make sure to track those receipts throughout the year; even an expert can’t find money if there is no record of it.
If you are a single Jane or Joe with no children, a basic 9 to 5, zero investments, no education expenses, and only one home, your taxes should be relatively simple. You might even get through them without the help of your friend, Rocky Road. On the other hand, if you are sitting on rental properties, have funds in the stock market, a gambling habit, money hiding on some undisclosed island, or any other number of financial surpluses or sinkholes, do yourself a favor and turn your taxes over before it’s too late. Once the auditors come knocking, there’s no going back.
Just because you decide to handle your taxes from the dining room table doesn’t mean you have to go it alone. There are plenty of options for the DIYer who isn’t exactly up on the latest tax laws. Check out Turbo Tax or H&R Block’s online options or pick up their downloadable software. These companies have designed easy-to-follow programs that will help you to the finish line without the high costs of in-person assistance. This route allows you the flexibility to handle your taxes independently while still guiding you to your largest refund through straightforward questions and online support.
Whatever direction you choose, don’t rush the decision. A false step during tax season can cost you dearly in your return. Missed deductions or improperly reported numbers may even turn your refund into one giant bill. Take some time (while you still have it) and ask yourself the tough questions this year: Is one quart of Cookies and Cream really enough to get me through?