Should You DIY Your Own Taxes or Hire a Pro?

By Tanuja A Akkannavar Thursday, 03 October 2019

Is it tough to do your taxes? Or you want to hire a professional? A question that makes us think hard every year at the end of the accounting year. DIY your own taxes can be chosen if your business and if its accounts are in small digits. Even if a single factor is being missed or a small mistake at the time of calculating the tax can make you pay a larger amount. By appointing or hiring a professional you can avoid costly mistakes which can have an adverse effect on the future and long-running of a company or the business. Today, with the use of technology numerous software and applications are available to calculate taxes.

 If calculation is your thing and, if company transactions are maintained correctly than DIY your own taxes is a good idea to go ahead. When the revenue of a company is large in number or has complicated transactions than hiring a tax professional is an option to choose for the safety and betterment of the company.

Following are some of the instances where you have to decide whether to DIY your own tax and or hire a tax professional -

DIY Your Own Taxes –

  1. A small amount of income or revenue and filing the taxation of your company is very simple.
  2. Single source of income.
  3. If you know very well about the digits and good at calculating.
  4. When you have solid and knowledge in filing tax and understanding its terms and conditions.
  5. When you do not wish to enclose your accounts to a third party and maintain privacy.

Hiring a Professional –

  1. When a company is new and you are filing and paying the tax for the first time.
  2. When the business or a firm undergoes major changes like it gaining profit or facing crisis and loss.
  3. The company has high income and revenue.
  4. When a company faces complications in accounting and problems in filing the taxes.
  5. When you have zero knowledge about taxes.

Factors to Consider before in paying the tax –

  1. The Revenue or Profit Margin of a company or the business. If a company has a low profit than it can file its own tax but if a company has high revenue and profit it is better to hire a professional.
  2. You may calculate and file your own tax or hire a tax professional one thing that is important to consider it How Costly Can a Mistake Be? A small mistake in placing a digit or a minute error while calculating the tax can make you pay a large amount.
  3. The Money, Time and Stress involved in paying tax. A professional will ask for fees but will be considered safe in calculating tax, as they are knowledgeable and experienced in taxation and you may save time to do other important tasks related to the business or company. Whereas, while doing it yourself you may save money but it gets a lot of stress of calculating tax properly without any errors that may later turn as a threat to the sustainability of a company.
  4. The Pros and Cons of DIY your own taxes and hiring a tax professional. By knowing very well about your company and its transactions you can easily decide which is better and safe for your company. Understanding the positivity and drawbacks of a company’s taxation will help in avoiding penalties and obstacles in the smooth running of the business.
  5. How much Knowledge You Have about the Digits and Accounting? if numbers are your thing than the term DIY your own taxes is a simple task for you. But, if you do not have any knowledge about calculating the tax than directly hire a tax professional.

Before choosing whether DIY your own accounts or hire a tax professional know about your company accounts and business. The methods of calculating the taxes are not easy and simple. If you are choosing to DIY and want to avoid complexities in calculating and filing the tax you should have strong knowledge and about the digits and methods of calculating the taxes also, you can choose a tax professional.

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