Back taxes. Mistakes. Audits. Missed opportunities. These are some of the unfortunate side effects of DIY tax preparation.

Doing taxes yourself may save you money, but getting help from a professional could be well worth it, especially for the self-employed. #CentSai #taxes #savemoney #taxestips #taxes #DIY

I started freelancing in March 2016. Since then, I’ve seen how stressful and busy tax season can get for the self-employed. I’ve heard stories from other business owners who’ve gotten on the bad side of the Internal Revenue Service (IRS).

Many either owed more money than expected or were audited because they didn’t report their earnings the right way. I didn’t want that to be my story.

The only problem? I didn’t know much about small-business accounting other than the idea that I needed to set aside a percentage of my earnings for tax purposes.

It’s perfectly fine to take the DIY approach around tax time. However, it does come with some risks. Instead of trying my hand at DIY taxes after my first year as a freelancer, I decided to invest a little money and hire an accountant, a decision that ended up saving me a lot of stress. Here’s why I chose to skip doing-it-myself:

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Simplifying the DIY Tax Process

Have you ever been so confused about something that you didn’t know where to start?

I started working with a certified public accountant (CPA) a few years ago around tax time. Before our initial call, I remember feeling incredibly overwhelmed. I hadn’t been the most organized freelancer the previous year, and I feared I wouldn’t have time to backtrack and organize all of my relevant documents and invoices.

Add to that the fact that I had projects to complete and looming deadlines to ensure my cash flow remained consistent.

Thankfully, hiring a CPA to file my taxes took a lot of pressure off my plate and really simplified the process.

After we got off the phone, I had answers to several of my questions, along with a login to a secured digital portal for me to upload my documents. I also received a custom spreadsheet that made calculating my income and expenses each month incredibly easy.

Using the spreadsheet and the tools that my accountant provided saved me time and made things easier overall. I was able to clear my schedule for one weekend and take care of everything that I needed to submit on my end so that my accountant could file my taxes for me.

CPA vs. DIY: Learning About Tax Breaks

One thing I liked about hiring a CPA instead of trying DIY tax prep was that I had someone on my side looking out for me. As a solopreneur, you have full control over your taxes. But at the same time, almost every responsibility falls on you. It can be overwhelming, especially when you’re still gaining new skills.

Plus, when you spend several months doing anything and everything on your own, it feels great to outsource tasks every now and then.

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My accountant brought up important information about potential tax breaks I could use and different expenses I didn’t know I could deduct. These included my internet and cell phone bills, work-related travel, and even my health insurance premiums.

I knew about some of the tax deductions I could take. But after hearing from an expert who stays up-to-date with all the regulations, I felt more confident filing.

Saving Time and Energy

Overall, hiring a CPA for my first year of self-employment saved me a great deal of time and money — both in preparing for filing, and in avoiding penalties down the line. The process was simple, quick, and efficient. Plus, I gained more knowledge about taxes and didn’t have to risk making a mistake.

Down the road, after I learn more about filing self-employment taxes, I may try to do it myself, but for now I can rest easy knowing that my taxes are in the hands of a professional.

My CPA was rather affordable, and I use his services only around tax time. I’m certain I’ll be able to work the expense into my budget every year. I think I paid around $125, which is around the average amount that CPAs tend to charge on an hourly basis, according to a recent Intuit Rate Survey.

Costs can vary depending on how complex each file is and the cost of services where you live.

In order to find a trustworthy and affordable accountant to help you navigate the wild world of freelance taxes, I’d recommend asking around to see who other freelancers use in your area. You can also compare rates and look for online reviews to help you pick out the right person.

Word-of-mouth referrals are still one of the best ways to find quality people to work with, though.

Thanks to my CPA, I won’t have any crazy stories to add to the ever-growing compendium of tales about DIY taxes gone wrong.

Additional background information for this article was provided by Katie L. Thomas, CPA, of Trinity Capital.

Doing taxes yourself may save you money, but getting help from a professional could be well worth it, especially for the self-employed. #CentSai #taxes #savemoney #taxestips #taxes #DIY