Tax filing strategies

Use tax professional

+ A must for complex returns
- Expensive (see below)
+ Through
+ Usually provide supports for audit

Do it yourself

+ Inexpensive
- Time & efforts (it takes an estimated 28 hours and 30 minutes to prepare a return)
- Require good knowledge in tax laws
- Possible errors or may missed tax saving opportunities

Use VITA /TCE programs

+ Preparation & e-filing for free
- Limited to simple returns
+ Preparers are trained & certified, but with uneven experiences
- No support for audit

Use tax preparation software

Software buys convenience!
+ Avoids arithmetical errors
+ Step by step interview process – reduces need for tax knowledge
+ Interview process minimizes errors from tax situation changes such as retirement
+ Convenient import of previous years info
+ Can do what if scenarios – see impact of different filing strategies
+ E-file available & convenient storage in PDF format

However
- Expenses – costs of software & e-filing
- Accuracy in data entry is very important!
- Lengthy interview process
- It may not handle special or complicate tax situations


The IRS estimates that $200 is the average cost for taxpayers to file basic federal income tax returns.
Professional tax preparers also calculated that the average fees their clients paid last season ranged from about $155 at H&R Block to just under $178 at Jackson Hewitt.