What Happens If I Prepare My Taxes Myself?

Though some people can tackle the tax season on their own, it’s not recommended for everyone unless they have extensive experience in this field of accounting. Hiring a professional to assist with tax prep and the actual filing will help you avoid expensive, risky errors that could derail your business financials.At Nguyen & Associates, we understand that not everyone can hire a CPA for their tax preparation process. If you’re considering tackling this project on your own, here are some things to keep in mind that may help direct you.

What To Expect When Doing Your Own Taxes

Both business and individual tax preparation is a timely business. You need a lot of concentration and ample time to organize and file your taxes, so if you’re doing this on your own, the earlier you start, the better. It’s also advised to have a good system for documentation to make tax prep easier.

Lots Of Math & Data Entry

Anytime you deal with accounting, especially for a business, you’re going to be dealing with a lot of numerical information. A calculator is your best friend during tax prep season. As you fill out forms, complete write-off data sheets, and calculate incomes and percentages, you’ll be going through a lot of information. For many, this is a project that requires skills beyond their own grasp on math, which is why hiring a CPA is such a valuable option.

You Need The Right Documents

For tax preparation in Denver, documents will be one of the biggest hurdles to leap over. When you’re filing and preparing your own taxes, you need to make sure you have every form needed, especially if you’re filing a business tax return. You need separate documents for write-offs, deducations, as well as expenses. Plus, you’ll want to include your W2 and I-9 forms, and anything else the IRS requires. Gathering and understanding these documents, as well as learning how to fill them out, can be tricky. Online resources can be a great help to you during this process.

It’s More Affordable

Of course, taking on the workload yourself massively cuts down costs related to tax season. CPAs can be expensive, and even online services that do tax filing take a percentage of your return, and these can be steep depending on how involved your taxes are. Preparing your taxes yourself will save money, but it will also cut quite a bit into your free time, since this is an additional task that is piled on all the rest.

You Have More Risks To Consider

The worst danger of preparing your own taxes is the responsibility of accuracy rests on you alone. You need to be diligent and thorough and be precise with your calculations. Mistakes made in the filing process or missing documents may be expensive errors that pose a risk to your after-tax income. Being 100% confident in your accounting ability is what is required for doing this step yourself.

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