Tax preparers may be certified public accountants, attorneys, enrolled agents and possibly others who do not have professional credentials. Because you are sharing your most personal data, you want to have a high degree of trust in the person you hire. You will divulge many details of your life, your finances, your marriage, your family, your income and your social security numbers.
While most preparers are qualified, it’s important to do your due diligence. Here are ten tips from the Internal Revenue Service (IRS) to help you make an informed decision about choosing your tax preparer.1
Tax preparation software was first launched in the 1980’s and it’s improved significantly over the past several years. There are many players in the market offering many different features. Before choosing a software package to assist you with your taxes, you should consider the following:
How simple are your taxes? Do you have relatively few deductions? Limited sources of income and investments? If this reflects you, then DIY software may be fine.
What’s your knowledge of taxes? Are you deduction-savvy? Are you aware of charitable contributions and the substantiation rules associated with them? Tax software should provide you with prompts to help you fill out the return, but the more knowledge you bring, the more accurate it will be.
Would you like some personal support? In the past that meant that you should probably hire a pro, but now some software packages are offering live support. For example, some offer reviews of your forms prior to filing, live advice and on-demand chat service for additional peace of mind.
The IRS provides links to free software options if your adjusted gross income is $66,000 or less. Whereas buying a software package can cost between $10–$200 depending on the complexity and features (such as live support) that you require. There is likely an additional charge to do your state taxes.
Whichever path you choose, be sure to read our tax preparation checklist to help you organize your forms and documents prior to filing.
Want to learn more? Check out other articles from AYCO on financial planning and more.
This material was prepared by The Ayco Company, L.P. an affiliate of United Capital Financial Advisers, LLC d/b/a Goldman Sachs Personal Financial Management (“GS PFM”). This material was prepared for informational purposes only and should not be construed as personal financial planning, investment, tax, accounting, or legal advice. No investment decisions should be made using this data. GS PFM believes the material used for the article is accurate, but does not verify its accuracy independently and does not warrant or guarantee that is it accurate or complete. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. © 2020 The Ayco Company, L.P., a Goldman Sachs Company. All Rights Reserved.
United Capital Financial Advisers, LLC d/b/a Goldman Sachs Personal Financial Management (“GS PFM”) is a registered investment adviser and an affiliate of Goldman Sachs & Co. LLC and subsidiary of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization.
The information contained herein is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered investment advice. GS PFM does not provide legal, tax, or accounting advice. Clients should obtain their own independent legal, tax, or accounting advice based on their particular circumstances. Please contact your financial adviser with questions about your specific needs and circumstances.
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