It’s tax time ! A dreadful time for me. It’s a chore, a hassle, a big pain, but I’m thankful for tax software, I can’t imagine doing it long hand despite my accounting degree !
One of the most helpful tools I have used throughout the year is an app called everlance. It is a free app for tracking expenses. It keeps me organized or I would be scrambling even more than I do. You can track mileage, medical expenses, college expenses and take pictures of the receipt just in case the ink wears out or you lose it. At the end of the year I ask for it to generate a report for my annual revenue and expenses and voila I have it emailed to me. There are many apps but this one is nice and simple and you can get the report on excel or pdf which is helpful. Every year I tell myself I will be ahead and file early. I am determined to succeed this year.
Tax Software Tip:
I recently heard that credit karma is giving people free tax software which is amazing but beware that nothing is free. They will be gathering your information and using it to market products to you.
I will choose to pay. It’s easier for me since I have used turbo tax and most information is transferred from previous returns. I am familiar with the software and it has worked all these years. I am sure the others are good as well. I haven’t tested different to give you some expert advice though.
Should I use a Professional?
If you are a W-2 employee, own a house and have dependents and that’s pretty much it, then try out the software! They make it easy, all you have to do is complete the questions. Maybe if you never used tax software, try it out, see the results and compare them with your accountant. Maybe you will find out something you weren’t expecting..like your tax professional wasn’t asking you all the right questions or you don’t mind filling out the software questions and you save some money. whatever it is, it’s worth a try.
If you have a business and you are not IRS savvy, then by all means, hire a professional. Interview them like you would your kid’s day care center!
Hire someone who specializes in your business type.
For example, if you are a real estate investor, ask other investors who they use and why. CPAs and other tax professionals (you know anyone can call themselves that, right?) don’t know every single tax law, that’s why it’s important to hire someone who specialized in your field. I, myself, am beginning to doubt whether I should have hired someone or not. I was listening to tax professional about real estate investing and I didn’t know a few of the things she mentioned. Don’t be intimidated by the three letters next to someone’s name (CPA). They make mistakes too. I have heard stories where they don’t ask their clients any questions about their business to benefit them with their expense write offs. Some tell people they can write off things they cannot. Firms are overwhelmed and overextended so you don’t get the attention you need. Be careful who you hire, it can cost you $$$.
Whatever you decide to do, good luck and comment below on your thoughts on the topic. Happy write offs.