And when to spring for a professional
As tax filing deadlines quickly approach, you may be feeling frenzied and frustrated. But take a deep breath and relax a bit.
The tech sector has created some new tools that make this time of year easier than ever.
Whether you’re planning to do your taxes yourself or hire someone to do them for you, these three tools can help.
The details: This program goes beyond tax preparation. It is designed to help freelancers and small business owners with the majority of their accounting and bookkeeping needs throughout the year.
Most helpful for: Staying on top of your earnings and expenses. Whether you need to track sales tax or mileage, generate invoices, or calculate and pay your estimated quarterly taxes, GoDaddy Bookkeeping offers a wealth of tools that simplify and organize your freelancing or small business finances. And when tax season arrives, it will populate forms (such as the Schedule C) for you.
What we like: You can link accounts to the application (e.g., bank, credit card, Etsy, Amazon, eBay), so your profit/loss numbers will always be up to date. Small business owners can see a running total of how much sales tax they’ve collected and owe. Freelancers can see a running total of estimated taxes owed for the applicable quarter and receive due date reminders.
What we don’t like: The estimated tax feature is only for estimated federal taxes. You’ll have to figure out your estimated state taxes on your own.
Overall: This program is a great way for freelancers and small business owners to organize their year-round finances and enter the tax season prepared. Cost: $3.99 to $11.99 monthly
The details: TaxSlayer is a user-friendly program for filing taxes on your computer or smartphone (iOS or Android). You can fill out the forms on your own or let the program guide you.
Most helpful for: Staying organized and exploring how multiple issues can affect your taxes. TaxSlayer asks a series of easy questions and uses your answers to populate the necessary forms for you. If your answers fall outside the norm or raise a red flag, the program will prompt you to confirm you haven’t made an error. It will also calculate whether you should take the standard deduction or itemize.
What we like: If you get audited, TaxSlayer will help. (If you spring for the Premium plan or include audit assistance as an add-on for $28.99 with the Simply Free or Classic plans.) Also, Premium customers have access to live chat options and get priority phone and email support. So if you’re not completely confident doing your own taxes (or if you hit a snag during the process), you’ve got real support.
What we don’t like: Because TaxSlayer is a program and not a person, it has its limits. It can’t account for or predict every eventuality that could affect your return. If you are in a unique financial situation, a self-directed program like TaxSlayer may not be the best option.
Overall: TaxSlayer is a good fit for most people — i.e., anyone who doesn’t fall into an unusual financial category. Cost: $0 to $35.
The details: Billed as the “Uber for accountants,” this app offers a fast and easy way to find a tax professional qualified to meet your personal and/or business tax filing needs.
Most helpful for: Finding a CPA to do your taxes for you
What we like: Taxfyle is quick and straightforward. After just a few yes or no questions, and taking photos of your tax documents to upload them, you’ll be linked to a tax professional and given a price quote in a matter of minutes. The app then provides a secure platform for communicating and exchanging documents, and three-year audit protection.
What we don’t like: There’s not much to find fault with here. However, if you are used to having your filing fee deducted directly from your refund, you may be disappointed that such an option isn’t offered. Additionally, Taxfyle selects the tax professional for you; you can’t just choose anyone in its system that you want.
Overall: If you’ve decided that you want to hand your taxes over, this app helps you easily connect with a qualified professional and to understand the costs upfront.
But there aren’t your only options. There are various other tools from TurboTax, H&R Block, and TaxAct. And here is a side-by-side comparison of many more tax preparation programs’ features and costs. Also, be sure to check whether your bank, credit union, or employer offers discounts on any of these tools or programs.
When You Should Spring for a Professional’s Help
Although these apps can make tax season less daunting, sometimes you’re better off hiring an expert from the start. Here are some signs that hiring someone is the right move for you:
- You feel confused or overwhelmed by the tax filing process. The peace of mind you’ll feel in putting everything in the hands of a competent professional is worth it.
- You’ve always done your own taxes, but something changed this year. Perhaps you began working for yourself, inherited money, or converted an IRA to a Roth IRA. If there are unique factors affecting your finances this year, it may be wise to get professional input.
- You’ve made mistakes in the past (and they’ve cost you). Leave it to an expert and gain confidence that nasty surprises like penalty fees are not in your future.
- You keep putting it off. Whether you’re busy or just don’t want to do it, why risk filing after the deadline?