Why More People Are Hiring Tax Pros for Their Personal Returns

Tax season used to be pretty simple for most people. Get your W-2. Enter some info into TurboTax or H&R Block’s software. And you’re done.

Not so much anymore, though. More and more people are figuring out that it’s not worth it to do their taxes themselves, and they’re willing to spend money to avoid the hassle.

We’re not just talking about people with complicated businesses or mega investment accounts, either. The “average” taxpayer with what seems like a “simple” tax situation is becoming more likely to open their wallet.

The reasons why paint a clear picture of how personal finances are evolving, and what people really care about when it comes to money.

When “Simple” Stopped Being Simple

Let’s be honest: the “simple” tax situations most of us used to have are getting a whole lot less simple.

The gig economy decimated this previously straightforward part of so many people’s lives. A person might have one job, but they also have side work they do as an independent contractor. They’re getting a 1099 for that income. Then, they might have also inherited a family property that they now rent out. They opened an Etsy store because their side hustle got a little out of hand.

All of these scenarios have their own tax implications. They have their own deductions that apply. They can also require quarterly estimated tax payments instead of just the once-a-year fee. There’s no way that $60 software tool can be expected to handle this; it doesn’t even ask all the right questions.

Even tax situations that don’t involve side income can render a once “simple” tax profile potentially complicated. Getting married and divorced. Buying and selling a house. Having a child. Inheriting money or property. These all change what your taxes look like. Not all of them have tax implications that are clear and straightforward.

Tax software can crunch your numbers. It can’t tell you if you’re making decisions that could come back to haunt you later.

The High Cost of Getting It Wrong

Most tax software programs do a reasonably good job, as long as you know what you’re doing and your tax situation follows the guidelines for the common scenarios that most people run into. The problem comes in when you don’t know what you don’t know. You could legitimately miss a deduction that you are entitled to, and that’s just lost money.

But even one mistake that catches the IRS’s attention is far worse.

More people are waking up to the idea that it makes sense to have a tax accountant look over their taxes rather than try and handle it all themselves. It’s not just about making mistakes, which is obviously a huge factor. It’s about knowing that someone qualified looked at everything and put it together the right way.

The financial costs of making mistakes on your taxes can add up pretty quickly. Think of the penalties and interest charges on taxes owed. Think of missed deductions that could save you a lot of money. It’s just common to think about how filing mistakes could cost you thousands when you’re trying to file when your situation dictates that you should actually be filing as head of household.

Your Time Has Value

Here’s another thing that probably nobody wants to hear: you actually have to put time into doing your taxes properly. A lot of time. You have to gather paperwork. Figure out which expenses can be deducted. You have to read over at least some IRS publications. And you have to spend a lot of time second-guessing yourself.

For people in high-demand professions, parents who have enough to deal with outside of tax season, or just about anyone who values their time differently than they may have decades ago, paying someone to handle this makes more sense now than ever.

The Questioning Element

Here’s where things get really interesting: most people aren’t just hiring someone to fill out forms, they want questions answered. Should they put money in a Roth IRA or traditional IRA? How should they handle this income they receive from side work? Should they itemize deductions? Not prompted by some generic software, they actually want answers.

Tax preparers see all of their clients, and they recognize patterns from one person to the next. They know what works, and what doesn’t. They know what people tend to do that comes back to haunt them later. That context matters way more than most people know when they are making financial decisions all year.

There’s also the relationship factor. There’s actual value in having an expert who you can call or email if you have a random question about your taxes in July instead of not panicking about it in April.

What It Means for Personal Finances

The fact that people are moving towards hiring someone to prepare their taxes says a lot about the way personal finance has evolved over the years. Personal finance now covers more topics and, in more depth, than in previous decades, and the old DIY model just isn’t working for more people now than it was in years past.

Between student loans, 401ks, IRAs, HSAs, investment accounts, side hustles, and more, getting someone to help you in at least one area of your personal finances isn’t seen as radical anymore. It’s becoming the norm.

People are also waking up to how seemingly small financial choices can come back to haunt you later. Choosing the wrong thing on your taxes can cost you a lot of money for years, and it can become a habit that’s hard to shake.

If you’re thinking about whether or not you should hire someone to help with your personal taxes, don’t ask yourself whether or not you can do them yourself. Ask yourself whether doing them yourself is the best choice for you given everything else in your life demanding your time and attention these days. The answer is becoming obvious, and it’s not going back.

You May Also Like: How Metal Doors Improve Security and Durability For Businesses