Central Bank of St. Louis

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  • Which is right for you? Electronic Tax System vs. An Accountant

    Taxes can be intimidating, especially if it’s your first time filing your return. If you want help with your taxes, there are typically two options:

    Find the right tax service for your budget

    1. Using an electronic filing services claiming to save you money and time on your taxes
    2. Hiring a professional tax accountant

    Both have their merits, but which one is right for you?

    Have an understanding of your situation
    Knowing what your needs are for filing your tax returns will help in making the decision what service to use. Your income is one of the most important factors. Per the IRS, if your total taxable income in a year is less than $62,000, you may qualify to use a free service called “Free-File” [1].

    TurboTax offers a free service for those filing their taxes using a 1040ez form [2]. Again, there are some restrictions as to who can file this form. Both of these options allow you to file your tax returns without charging you any money.

    Deductions
    There are a number of deductions you can claim to lower your taxable income. These can be charitable donations, or contributions to a retirement account like an IRA or 401k. Other common deductions include children, education expenses, and job expenses.

    Using an electronic service may help you find more deductions than filing yourself, but you might miss some of the less well known deductions. In addition, the way the deductions are described may be confusing, which may end in not taking a deduction you qualify for because the wording wasn't crystal clear. A good tax accountant who completely understands your financial situation may be able to find deductions an electronic service can't.

    How complex are your taxes?
    The complexity of your situation may determine whether or not you should use an accountant. If you plan to file as single and don't have kids, your best bet may be to file using an electronic service. On the other hand, if you're married, have 3 kids, are paying for their college education, and have multiple sources of income, it may be worth the extra cost of hiring an accountant.

    [1] Free File: Do your taxes for free, IRS
    [2] What is the IRS 1040ez form? TurboTax



  • The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its affiliates and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.