Tax season has arrived. Should you tackle it alone on your return or get help?

Key points

• Today’s tax filing software makes it easy to prepare solo tax returns.
• There are certain scenarios where hiring a tax preparer makes sense.

Now that tax season is in full swing, you may be getting ready to prepare your tax return. Although you can file your own return (today’s software is surprisingly user-friendly), you may want to consider hiring a tax preparer for the job instead.

There are benefits to hiring a tax preparer, despite the cost. For one, a professional can help you avoid claiming the wrong deductions — a mistake that could get your return checked and lead to hassle. A tax preparer can also help you identify deductions you may not have known you were entitled to.

The amount you spend on a tax preparer will vary depending on where you live and your personal circumstances. Before you start weighing the options, run through these five key questions to determine if it’s worth hiring a tax professional this year.

1. Did you work multiple side jobs in 2021?

Side hustles have become increasingly popular. If you’ve done a lot of freelancing, you might benefit from hiring a professional for your taxes. This person can make sure that you are reporting your income correctly and taking the correct deductions for the expenses you incurred while doing this job.

2. Did you sell a lot of investments last year?

If you sold a bunch of stocks in your brokerage account last year at a profit, you could be sitting on a big capital gains tax bill. If you sold investments at a loss, you may be able to have that loss offset gains or other types of income. A tax professional can help you navigate the process and reconcile this activity.

3. Do you own a small business?

If you own a small business, it’s usually beneficial to hire a tax preparer rather than tackling your tax return alone. There are different schedules and information that business owners need to prepare. This is a task you may not be equipped for unless you are familiar with the small business tax rules.

4. Have you experienced a big change in your life?

If you got married or divorced in 2021, it might be beneficial to hire a tax preparer to help you manage your new situation from a tax perspective. The same is true if you had a baby last year.

5. Do you think a tax specialist could save you money?

If you are a salaried worker who rents a home, your tax situation is quite simple and there may not be much savings that a tax preparer can help you achieve. But if you’re an independent homeowner, you may qualify for a host of deductions, from your mortgage interest to your property taxes to a home office deduction. If you have reason to believe that a tax preparer could save you money, it’s worth knowing what local professionals will charge you.

Although there is no obligation to outsource the tax filing work, you may find that hiring someone relieves you of stress and saves you money. If you’re going to hire a tax preparer, be sure to ask friends and family for recommendations to increase your chances of ending up with a professional that’s right for you.