The most time consuming part of my business taxes is the part a tax preparer can't do: categorizing expenses and totaling by category. I've been working on that today (after sleeping in). Every year, when I get that information finished, I fill out the tax forms myself.
When I first started my business, I hired a CPA firm to do my taxes. I did it that way for several years. Of course, I reviewed the completed return every year before sending it in. After awhile, I realized, “I can do this.”
“But Bob, what about changes to tax law?”
It’s true, I suppose, but as a counter-argument I’d point out that when the tax law changes, the tax forms change correspondingly. Here’s the thing: I actually read the forms and the instructions. And that’s the part that most people don’t want to do, I think. They don’t want to read it. So they ask a CPA, or at least a Tax Preparer, to do it for them.
In my amateurish, non-professional way of doing taxes, I have something very nice working in my favor: if I’m ever audited, the IRS auditor will either say my tax return is fine, or they’ll say, “We owe you a refund. You overpaid.” I declare all income, and I don’t make up deductions, and the math is good. So if I do make a mistake, it’s going to be not taking a deduction that I’m entitled to.
Will that hypothetical refund for overpayment ever be more than the money I’ve saved over the years by doing my own taxes? I doubt it.
So it comes down to whether I prefer the drudgery of doing it myself, or paying someone to do it for me. And since I have to do 98% of the work (categorizing and totaling expenses) and the CPA would only do 2% of the work (filling out the forms with the numbers I provide), I’m fine with doing it all myself.
