Making the decision to pay someone to prepare your tax return is largely dependent on your confidence in crunching numbers and understanding of tax rules. If you are comfortable with calculations and have the time and patience to devote to your taxes, then you may be able to go ahead on your own. However, if you are not confident in your abilities, it may be worth it to pay someone to do your taxes. The IRS estimates that the average person spends up to seven hours gathering forms and preparing their tax return, while business owners can expect to spend around 20 hours.
When looking for help with taxes, it is important to seek out more than just data entry. A good tax preparer should be able to guide you through the process and help you take advantage of deductions and credits you are entitled to. If you plan to claim the standard deduction, there is no need to hire someone as all you need to do is list your income from Forms W-2 and 1099. You can pay a small fee for software such as TurboTax and submit your own electronic return or print a paper return and mail it. It is generally best to go electronically as it will help you avoid mistakes and get your refund faster if you are entitled to one.
When looking for a tax preparer, make sure they are honest and compliant with tax law. Research them before hiring them and make sure they are aware of the credits and deductions you qualify for as a real estate investor. If you have a more complex tax situation such as income from self-employment or investment gains, you may need to pay for a tax reporting program that supports those forms. If you make a mistake on your return, you may be able to amend it yourself using tax return software if you used that software initially and it has retained your information.
If not, it may be best to hire a professional who can prepare your return in a fraction of the time it would take you to do it yourself. If this is your first time filing taxes, take it easy and learn about what you're doing so future years will be easier. And even if you don't have a detailed tax situation, consider upgrading to include live support from tax experts. Finally, if you are a tax return preparer yourself, make sure you complete continuing professional education requirements and pay a registration fee.
