Taxes: To Outsource or Not?

Community Manager — Thu, 17 Mar 2011 19:00:00 GMT

The U.S. tax code isn't easy to navigate. Just ask current U.S. treasury secretary Timothy Geithner, who oversees the IRS. Geithner's nomination was almost derailed by his failure to pay four years of Social Security and Medicare payroll taxes, a failure that Geithner chalked up to error, errors which tax experts agree are all too easy to make when filing.

Geithner had been filing his own taxes. Would hiring a pro have made a difference?

The Pros & Cons of Professional Tax Preparation

The Upside

Hiring a pro can save you time. The IRS estimates that individuals spend nearly 25 hours preparing their taxes. Time is money!
Tax preparation costs can be tax deductible.
Pros can find deductions or credits that you might otherwise miss.
Pros make fewer mistakes than the average tax filer.
In need of audit assistance? A pro can help you navigate the paperwork and can event represent you to the IRS.

The Downside

Ka-ching. Professional tax preps costs money. Depending on the complexity of your taxes, a filer can expect to pay a flat fee of $130 for simple forms with no deductions and up to $120 per hour for complex taxes.
You don't always get what you pay for. Not all tax pros are equal (or competent). In 2008, the Better Business Bureau reported that complaints on tax preparers were up a whopping 80 percent. Vet your pro before entrusting your highly personal information.
You need to plan ahead. Pros are not for procrastinators; they book up early in the spring and generally require paperwork weeks in advance of April 15^th.

If you wish to find a CPA to help with your taxes be sure to check their reputations before entrusting your documents. If you chose to use one of the big nationwide tax prep firms such as H&R Block, Jackson Hewitt or Liberty Tax Service, consider requesting a senior-level tax preparer.

Need a laugh this tax season? Check out ten humorous (and true!) tax tales including one intrepid filer's attempts to declare pet food tax deductible and attempts by the IRS to collect four cents.

Do you prepare you own taxes? What tips do you have for foolproof tax filing? If you use a professional, how do you get your paperwork ready? Share your thoughts here and on the Pendaflex Facebook page.

The Tax Man Cometh

Community Manager — Wed, 09 Feb 2011 17:50:00 GMT

We know, we know, death and taxes. Sure as day follows night, April 15th rolls around every year so what are you waiting for? Time to get your tax paperwork in order.

Corralling Paperwork

The tax code may be complicated but getting ready to file your taxes needn't be. We like the simple, three folder solution outlined by leading investment site the Motley Fool. Grab three folders, label them "income", "expenses and deductions" and "investments" and dive into the user-friendly advice in Get Organized for the IRS.

Deduct and Save

Once you have your paperwork in order, be sure to pay attention to your deductions. Read 10 Often Overlooked Tax Deductions to identify savings that too many people neglect such as "green" renovations to your home and the cost of professional tax preparation.

Want a Refund?

Are you in line for a tax refund? Read 10 Tips for Getting the Biggest Tax Refund for helpful hints including deducting child-care costs and professional development. Also, the IRS is now app-friendly: check the status of your return on your phone or iPad.

What Not to Do

Everyone makes mistakes from time to time, but an IRS return is not the place to do so. Common mistakes include math errors and missing or incorrect information. Read MSN.com's 10 Tax Goofs Many of Us Keep Making for tips on error-free filing.

How do you get organized for tax season? Share your thoughts here and at the Pendaflex Facebook page.

Beyond Folders : tax time

Taxes: To Outsource or Not?

The Tax Man Cometh