A lot of people may have pondered on the idea of doing their taxes on their own at some point in time. Depending on your situation and your level of expertise, it could actually be a good idea. But you could also be overestimating your accounting skills and opening yourself up to some level of risk in the process. In this article we’re going to give you some of the pros and cons of hiring an accountant vs doing your taxes on your own.
The Pros of Doing Your Taxes Alone
One of the best things about doing your taxes alone is that you get more control over the whole process. You get to control when your tax return is complete and how long it will take to be completed. You don’t have to wait at the back of the line or constantly call the person doing your taxes to make sure it’s getting done. A lot of business owners like to have control over those sorts of things and this will allow you to get it done without having to deal with a third party.
You’ll also be gaining a lot more insight about your business by doing your own taxes. It’ll help you to understand your cash flow situation better and make some adjustments if needed.
Cons of Doing Your Taxes Alone
Unless you have some accounting experience, or have significant expertise dealing with accounts, then you’ll likely be struggling with some aspects of filing your own income tax return. Guesswork will only increase the risks of delays, mistakes, and a lot of added stress that could’ve been easily avoided.
If you aren’t 100% sure about what you’re doing, you could make some seemingly innocent mistakes that could put you in a lot of trouble. If the ATO happens to see something that doesn’t seem right, they might investigate you, which will lead to more headaches.
Pros of Hiring an Accountant
If you’re a busy business owner and have to worry about managing your business and squeezing in some personal time as well, then you probably don’t have the time to do your taxes. You can simply hand the job over to an accountant and not have to worry about omissions, mistakes, or investigations.
Another thing accountants are good at is finding spots where you can save money and certain tax breaks you might not be aware of. However, you have to make sure that these outweigh the costs of actually hiring an accountant in the first place.
Cons of Hiring an Accountant
Cost is the main deterrent for most people when hiring an accountant. Dealing with a good one will cost you, and you might not have the means right now, especially if you have to face the prospect of a tax bill.
And there are always chances that you hire either an incompetent or shady accountant as well. In this case, you have to make sure that you screen candidates carefully and only go with those who have a solid track record and verifiable references and reviews.
Whether you should do your taxes alone or not all depends on your budget, needs, and level of expertise. So, make sure that you weigh both options carefully before you make a decision.