Should I Do My Own Taxes?

by | | Taxes

taxes

Tax preparation must be done right, but it’s less valuable than tax planning. This is because preparing your tax return just reports what already happened.

You can do your own taxes or use an accountant. Below are comments on both routes.

Bottom line: We recommend having an accountant prepare your returns. If you do your own taxes, you can easily spend a lot more time, do a lot worse job, and pay a lot more tax. This is especially true if you have any self-employment income from doing locum tenens work.

Doing Your Own Taxes

You can use any number of DIY tax software packages. Products we’ve used personally with success include TaxAct, TurboTax, H&R Block Online, and FreeTaxUSA (no financial relationship with any of these). Once you’ve chosen a product, don’t switch down the road just to save a few bucks.

Your time is valuable. It’s only worth it to do your own taxes if you truly have the time and energy AND you value learning about financial matters.

It also helps to have a financial advisor who knows locum tenens taxes, and will review a draft of your tax return before you file. We’ve saved more clients from paying tax on their backdoor Roth IRA conversions than we can count!

Hiring An Accountant

As noted above, hiring an accountant is well worth it. It’s an investment, not a cost.

Below, we discuss how to choose an accountant who knows locum tenens taxes, and how to work with them effectively.

Choosing An Accountant

How do you decide which accountant to hire? In short, they should know the contents of our complete guide to taxes off the top of their head.

One specific comment: Some accountants are unfamiliar with solo 401(k) plans, so they recommend a SEP IRA by default.

Working Effectively With Your Accountant

Even when you use a tax pro, you still need to do some work! Here are some tips for working effectively with your accountant.

  • Get your info in quickly; February is ideal. This puts you ahead of all the clients who wait till the last minute.
  • Send all your info in at once. Since your accountant won’t have to track things piecemeal, there’s less risk that something gets missed.
  • Respond to questions promptly.
  • Know that response time from February to April will probably lag. A CPA firm during tax season is like a jammed ED. Like it or not, triage needs to happen.

Peace of mind is very important when it comes to taxes. You want to sleep well at night, confident that if you do get ever audited, all your deductions will stand up.

To learn more about locum tenens taxes, check out our complete guide.

Want a no-obligation review of your finances? Request a FREE Financial Pulse Assessment™ online. We’ll review your scorecard and send you a short video, including comments on your Tax Rate and how to reduce it. No need to talk with anyone unless you want to.

Get new articles sent directly to your inbox.

The 5 Biggest Financial Mistakes ER Doctors Make And Simple Ways To Solve Them

 

You’ll also get new articles sent directly to your inbox.

Success! Check your email inbox for next steps!