It’s now officially tax season after the Internal Revenue Service (IRS) announced on earlier this week that the formal tax filing period had started.
The new deadline for filing taxes is April 18. What you need to know about paying taxes this year, including the most common mistakes made by taxpayers and how to prevent them, is provided below.
Tax Season: IRS Survey Revealed Who Paid Taxes On Their Own, Hired A Professional
Is it a good idea to do your own taxes? USA Today said it’s challenging just like practically anything tax-related. It depends on your financial situation, how much you detest filing taxes, and whether anything significant just changed in your life.
DIY taxpayers are typically young, just entering adulthood, and possess less possessions. An IRS survey showed that 53 percent of all taxpayers hired a paid tax professional in 2021. However, Gen Z was much less likely to hire one than any other age group. Compared to more than 50 percent of persons in every other age group, just 33 percent of those between the ages of 18 and 24 hired a tax professional.
IRS added that those with middle-class incomes between $75,000 and $90,000 were the most likely (59 percenr) to seek the help of a tax expert.
When is a good time to DIY or hire a professional?
Doing your own taxes may be the best option if you just have a few sources of income, such as a W-2, bank accounts, and a few 1099s, and you intend to use the standard deduction. Using free forms available on the IRS website or simple tax software, you may save money and finish your tax return rather fast.
You could be eligible for one of the IRS’s free filing programs if your taxable income is below a specific threshold, you have a handicap, speak limited English, are elderly, or all of the above. To find out if you are eligible, visit the IRS website.
But hiring a professional is a wise decision if you have a significant life transition, such as getting married or divorced, having a child, purchasing or selling a home or company, dealing with a serious health crisis, or retiring.
A tax expert’s fees are also prudent if you have income from a variety of sources today, have investment losses you need assistance with, got an inheritance, or resolved an estate.
Taxpayers may discover a tax return preparer with certain credentials by using the searchable and sortable IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.