Earning

When Is It Worth It to Hire a Tax Pro?

Natasha Burton

There’s still plenty of time to file your taxes this year—the deadline is April 15. But should you file yourself or go to a tax pro? Here’s how to figure that out, and how to make sure either method goes smoothly.

DIY or Hire Expert Help?

If all of your annual income comes from your full-time job, and you just have a few straightforward deductions plus some retirements savings, filing your own tax return should be pretty easy.

But if your home’s in foreclosure, you did a short sale or you refinanced, hiring a pro may be advantageous, as those can trigger more complicated questions about income and deductions, says Tana Gildea, a Georgia-based Certified Public Accountant and author of “The Graduate’s Guide to Money.”

Small business owner? Consider expert help to ensure you’re taking all the right deductions. Independent contractor? You might also benefit from guidance in assessing quarterly taxes, SEP IRA contributions and home-office deductions.

And if any special rules or circumstances apply to you—you’re a real estate professional or own complex investments, for example—you may want to hire someone to help you navigate them.

If you’re going to DIY…

1. Use tax software. Gildea likes TurboTax because it’s easy to use, and, if you’re filing a very basic return, it’s free. Otherwise, fees start at $39.99 (per return).

There’s also Free File, which is software to complete federal returns from the IRS, available free of charge to people earning less than $66,000. (The IRS announced it was open for business on January 11.)

2. Take your time. Double-check your data and math at each step. “You have to be able to substantiate every number that shows up,” Gildea says.

3. E-file. According to Gildea, e-filing is the way to go. (It’s what the pros have to do unless they specifically opt-out.) It’s also faster than sending info via snail mail, which means a speedier refund.

4. Apply for an extension if needed. If you don’t have the info to complete your return, or you had a life event like a debilitating illness or death in the family, you can file an extension. Just don’t forget you’re still required to estimate your income, calculate any taxes owed and pay them by April 15.

Best Practices For Hiring a Pro

1. Understand what you’re getting. An Enrolled Agent is a tax expert who’s passed an IRS exam and is authorized to represent taxpayers in a dispute with the IRS. They may not also be Certified Public Accountants, explains Gildea. CPAs have “extensive knowledge” of accounting rules as well as tax rules.

2. Beware of chop shops. While the amount you’ll pay depends on the complexity of your return (and the rate could be billed hourly or as a flat fee), getting quoted a super-low cost could be a red flag. That may indicate they’re churning out hundreds of returns, and may not pay as much attention to the details of your situation.

3. Interview your prospective pro. Come armed with questions about your tax situation. And check credentials of anyone you meet through sites like the American Institute of CPAs.

4. Make sure you have all your documents. Gather copies of the tax forms you got in the mail from companies you’ve worked for, like a W-2 and 1099s, as well as receipts and any other supporting documentation you need (like receipts for any donations you made), keeping originals for yourself.

5. Don’t sign anything you don’t understand. Ultimately, you are responsible for what’s on your tax return—no matter who prepares it. “If you don’t understand where a number came from, don’t sign the return,” Gildea says. “If your preparer can’t, or won’t, explain the basics of how the taxable income was calculated, it’s time for a new accountant.”

This article was updated in January 2019.

acorns+cnbcacorns cnbc

Join Acorns

GET STARTED

About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2019 Acorns and/or its affiliates.

NBC Universal and Comcast Ventures are investors in Acorns Grow Incorporated.