Understanding Your Income Tax Filing Options
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When tax time rolls around, the first decision you have to make is whether to go it alone or get help from the pros.

Each tax filing option comes with benefits and drawbacks, so examine the pros and cons before you decide which path is right for you.

Tax Filing Option 1: Do it Yourself

Pros:

  • Lower upfront costs: As of 2016, if your adjusted gross income is below $64,000 a year, the IRS provides complimentary preparation software for federal (and some state) returns. If your income exceeds that amount, you can still file for free using the electronic or paper forms the IRS provides. Other companies, like Taxslayer, offer low-cost options for filing taxes depending on your income level. You can also get free advice at local events near tax-time, so check with your library and city colleges about tax-preparation classes.
  • Provides valuable insight: Filing taxes yourself can give you a better understanding of your personal finances. As you complete the forms, you’ll see exactly how your money is being taxed and which deductions you qualify for. Learning how a hobby, an investment, or a side-business impacts your tax liability may inspire you to change old habits or pursue new dreams.

Cons:

  • It takes time and skill: Federal and state tax codes are complex and ever changing. Doing your own taxes requires keeping track of your deductions and credits throughout the year, developing and maintaining a filing system, filling out the forms accurately and completely, and submitting them on time. If you’re not a detail-oriented person, you may get overwhelmed — or make a serious mistake.
  • You’re in the hot seat: In the event of an IRS audit, you alone are accountable for your return if you’ve prepared and filed it yourself. That’s why it’s critical to check your return carefully for errors and omissions before you submit.

Consider doing your own taxes if you have the skills, interest, and time to devote to doing them correctly, and your taxes are simple and straightforward.

Tax Filing Option 2: Hire a Professional

Pros:

  • You have an expert guide: CPAs, accountants, and tax advisors are supposed to stay up-to-date on tax code changes. By paying for their services, you buy access to their wisdom and perspective on how best to navigate the tax landscape. They can answer questions about which deductions and credits you qualify for, how to claim them, and how changes to your finances will impact your return.
  • They provide a second set of eyes and some peace of mind: Common mistakes on tax returns include misplaced number entries, math errors, and missing signatures, not to mention failing to claim a deduction or credit and overpaying. Hiring a tax professional reduces the chances of such oversights. Plus, many tax services include support and representation if you’re audited.

Cons:

  • Higher upfront costs: Depending on the complexity of your taxes, the cost of hiring a CPA or accountant to do your taxes may start at a couple hundred dollars. National chain tax preparation services may advertise that they will file your return for under $30, but they often charge a premium for preparing the forms.
  • May introduce delays: Tax professionals are busy people. If you’re a new client, it can take several months to get on their calendar. That’s why it’s important to start early. If you procrastinate, you may need to file for an extension or do the job yourself.

Consider hiring a pro if you can afford the fee and your taxes are more complex due to a major life change (e.g., marriage, divorce, or retirement) and/or due to your ownership interest in a business, property, or complex investment portfolio.

If you have additional questions about filing your tax return, visit the Regions Tax Center to learn more.

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This information is general in nature and is provided for educational purposes only. Regions makes no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information presented. Information provided should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. Regions encourages you to consult a professional for advice applicable to your specific situation.

2016 TaxSlayer LLC and Regions Bank. Regions Bank is pleased to make TaxSlayer services available to our customers. Regions Bank does not provide the product or service and makes no representations or warranties regarding your use of TaxSlayer. See taxslayer.com for details and limitations on TaxSlayer’s Guaranteed Maximum Refund. TaxSlayer and other related marks are registered trademarks of TaxSlayer LLC and should not be used or reproduced without consent.