Should We All Just Do Our Own Taxes?

So I’ve been thinking, more and more, about trying to do my own taxes this year.

It’s going to be the simplest tax year I’ve had in a long time: only writing income (instead of writing+music performance income), I have a whole stack of 1099s, I’ve been keeping very good records of both income and deductions… why shouldn’t I be able to do my own taxes?

Besides the fact that you’re supposed to get a CPA, of course.

Except—as anyone who followed the tax deduction conversation between me and Ravenclawed yesterday knows—I’m not sure I’ve always gotten the best tax advice. Since I started freelancing, I’ve worked with a CPA, a tax prep chain, and an online tax service (where I paid extra to have a virtual tax prep assistant), and I’ve never felt quite satisfied with any of these options.

BloombergBusiness agrees that tax season can leave a lot of us feeling a little unsatisfied, asking “do tax preparers know what they’re doing?” and citing an egregious list of tax preparer mistakes. Here’s just one example:

At a major tax prep chain in Florida, “the preparer seemed to want to help me with owing less, but was unsure how to go about it,” a client told researchers. The preparer tried clicking and unclicking various fields on her computer, explaining that “sometimes it made customers owe less.”

That’s about how I felt when I tried to work with a tax prep chain. The person I spoke to didn’t have definitive answers for any of my questions, and I left with the sense that I had wasted my time.

BloombergBusiness notes that “almost anyone can claim to be a tax preparer;” you don’t need a special certification or license, and you don’t even need to pass a test. All you have to do is pay the IRS $50, get your tax identification number, and start publicizing your new tax prep business.

That means if the rest of us want to make sure our tax preparers know what they’re doing, we’re going to have to do a little extra legwork:

How can taxpayers find competent tax preparers? A year ago the IRS launched a database of tax professionals who voluntarily provided proof of their education and credentials. In addition to CPAs and attorneys, the list includes “enrolled agents,” who go through at least 72 hours of tax courses every three years.

(I did check, and the CPA I’ve been working with for the past two years is in this database.)

So should we do our own taxes after all? It seems ludicrous to advise anyone to do their own taxes—the standard and accepted advice is “GET A CPA”—but BloombergBusiness cites a very telling statistic:

The GAO estimates that half of all self-prepared individual tax returns contain at least one error, compared to 60 percent of returns completed by a paid preparer.

In other words, we are less likely to make a mistake on our taxes than the people we hire to do our taxes for us.

Clearly this depends on whom you hire and—let’s be honest—whether you provide accurate and comprehensive information to your tax preparer. (“Whoops! I forgot that I made a contribution to my IRA this year!”)

But after reading this BloombergBusiness piece, I’m very tempted to just do my own taxes—especially now that I’ve spent two years listening to a CPA explain how freelance taxes work.

The question is: should I?

(Also, I’m very interested in responses from Billfolders who work in the tax prep industry.)

Support The Billfold

The Billfold continues to exist thanks to support from our readers. Help us continue to do our work by making a monthly pledge on Patreon or a one-time-only contribution through PayPal.