Should I use online tax software or hire an accountant?

When weighing the options of using online tax software or hiring an accountant, there are several key points to remember in order to save money.

What are the benefits of hiring an accountant?

You can list the cost of hiring an accountant as an additional tax deduction on your tax form, so you don’t actually suffer an extra expense for their services. They save you a great deal of time and tax research headaches by doing the hard work for you. An experienced accountant can find extra tax exemptions for you that you may never find on your own, and they help you avoid the risk of making any mistakes you may pay for later. Accountants are ideal for handling the taxes of large and small businesses alike and individuals with more complex financial situations. Hiring an accountant is especially important for those trying to save money for the next generation as they know which investments are tax-free and which have the highest tax rates.

What are the disadvantages of hiring an accountant?

First, you need to find a good accountant with real experience. In the United Kingdom, anyone can adopt the title of a “professional accountant” and create a website advertising their services; that includes people without any real qualifications. You need to carefully check out the background of your prospective accountants in order to get real assistance rather than another tax headache. Consider starting your search at a referral agency like The Institute of Chartered Accountants in England and Wales, also known as the ICAEW; this association is a helpful resource for finding registered accountants with a more solid reputation at their website: www.icaew.com. In January 2018, the average rate for a simple self-assessment service from an ICAEW accounting firm was around 200 pounds for those residing outside London.

What are the benefits of using online tax software?

Many people are primarily attracted to online tax software because it’s less expensive, and some services come with a free trial period. For individuals with basic tax needs, this option may provide all the assistance you need to prepare your taxes. This option is best suited for those with experience managing their own finances including personal deductions and interest dividends. New online tax software even operates from a cloud server so that you don’t need to install any new programs on your personal computer. Some intuitive, online tax software programs can automatically update the rest of your tax form while you enter the data to minimise user errors. Filing your taxes online with the aid of online tax software also extends your tax deadline by three extra months, so you have until January 31 to prepare everything you need.

What are the disadvantages of online tax software?

You still assume a certain degree of responsibility for the data you need to collect in order to use online tax software. Online tax software is unable to give you much additional tax advice that’s custom-tailored to your needs; it’s suited for general assistance only and can’t possibly help you find out all the little tax details that can add up to save you money. The direct guidance of a personal accountant is a priceless resource who can clearly answer all of your tax questions, help you remember important tax details you may have forgotten to report, and give you tips to better prepare for next year’s taxes to save even more money.

Beware of online, self-assessment tax services at bargain rates because companies like these may do little more for you than you could do on your own for free. Be sure to investigate if they are actually reviewing and correcting your data before entering it onto a tax form for you; otherwise this service is just an additional waste of your time and money.