Is filing your taxes on your own worth it? (2024)

FAQs

Is filing your taxes on your own worth it? ›

Although most people can benefit from doing their taxes on their own, there are some people who will likely be better off hiring a professional. Whether or not you're one of those people depends on the complexity of your tax return and your knowledge of your deductions.

The Bottom Line. Individuals with a single employer and few investments may save money by preparing their taxes. Those with business income or rental properties will find hiring an accountant worth their peace of mind and potential tax savings.

The short answer is no, you cannot claim yourself as a dependent on your tax return. This is because you are considered to have your own personal exemption.

Key Takeaways

More Room for Tax Breaks: Filing together usually means you can earn more and still qualify for certain tax breaks, like IRA contributions and education credits. Watch Out for Higher Rates: If you file separately, you might pay higher taxes than if you teamed up on a joint return.

75% of Americans Plan To File Their Own Taxes — Why This Is a Good Money Move.

Not only is the process usually more efficient than commuting to your tax professional's office, it's often less expensive as well. Depending on the details of your return, you may even be able to file it for free.

Anytime your taxes are complicated. Hiring a pro is a prudent choice after a major life change like getting married or divorced, having a baby, buying or selling a home or business, experiencing a major health issue, or retiring.

By placing a “0” on line 5, you are indicating that you want the most amount of tax taken out of your pay each pay period. If you wish to claim 1 for yourself instead, then less tax is taken out of your pay each pay period. 2.

The biggest benefit of preparing your own taxes is the money you'll save. Tax preparation fees vary but you can expect to pay around $150 or more for a simple return and up to several hundred dollars if your situation is more complex.

The deduction for personal exemptions is suspended (reduced to $0) for tax years 2018 through 2025 by the Tax Cuts and Jobs Act. Although the exemption amount is zero, the ability to claim an exemption may make taxpayers eligible for other tax benefits.

Do I get more money if I file independently? ›

When you file as an independent student, your parents' income will not affect your eligibility for financial aid. This may qualify you for additional low-income awards, such as the Pell Grant. You may qualify for higher award amounts.

Earned Income: If a dependent's earned income exceeds the standard deduction for a single filer, they need to file a tax return. For 2023, this means if their earned income is more than the standard deduction, they should file. For 2024, this threshold might adjust slightly.

The bottom line. Tax preparation doesn't have to be difficult. In fact, with today's software solutions, filing your own tax return can be relatively simple. Compare today's leading software solutions to file your own taxes.

For example, if you have only one W-2 and no deductions, the best do-it-yourself tax software may be the way to go. But in other cases, you may need more guidance. If you own a business, sold investments or worked in multiple states in 2022, you may want to hire a tax professional.

Which taxpayers pay income tax at the highest rates and the lowest rates? (The highest tax rates apply to taxpayers who use the married filing separately filing status. The lowest tax rates apply to taxpayers who use either the married filing jointly or qualifying surviving spouse filing status.)

Check the IRS' Directory of Federal Tax Return Preparers. The American Institute of Certified Public Accountants helps consumers find a licensed CPA; it also can help consumers find local CPAs. Look for an EA through the National Association of Enrolled Agents.

Since a tax pro is less likely to make mistakes on a return and is more likely to know which deductions and credits you're eligible for, hiring someone to prepare and file your tax return can make you less likely to be audited.