Every year, a group of adventurous souls decides: This is the year I’m going to prepare my own tax return! While we certainly applaud an individual’s right to establish self-reliance and try to save money on preparation fees, it’s rarely a good idea.
Just as you shouldn’t perform surgery on yourself or pack your own parachute (if you’ve never done it before), tax preparation is best left to people who have intimate knowledge of the tax code and all of its changes. As the saying goes: You’ll pay for an accountant whether you use one or not.
While we generally advise against doing your own tax preparation, this year we especially (or particularly?) recommend that you pay for professional preparation. Here are some pretty compelling reasons why:
- The 2018 tax season sees the biggest changes in the tax code in over 30 years – The Tax Cuts and Jobs Act (TCJA,) brought about massive changes to the tax code. Individual and corporate taxes were both changed significantly and if you aren’t familiar with the new tax code, you may miss some of its greatest benefits.
- Don’t let the “simplified” IRS Form 1040 fool you – The new Form 1040 is much smaller than previous versions and replaces the Form 1040A and 1040EZ. The new version of the 1040 fits on the front and back of an 8.5” x 5.5” piece of paper. The form has far fewer lines in it, but don’t let that fool you. The form consolidated many lines, but it didn’t simplify the calculation of those consolidated lines. In fact, the form comes with over 117 pages of instructions.
- The IRS is still clarifying the way the law is interpreted and enforced – In 2018 the IRS issued over 100 notices providing guidance on the way that the law would be enforced for the then-current tax year. Two months into 2019 the IRS is still issuing guidance for the 2018 tax year.
- Some provisions are as clear as mud – Because the TCJA was passed in December of 2017, shortly before Congress went on recess for the year, the law reads as though its writing was rushed. Many provisions, such as the 199A business pass-through deduction, lack clarity even with the IRS providing additional guidance.
- Tax Year 2019 –By having your taxes professionally prepared this year, you can also receive guidance for the 2019 tax season. Many of the main provisions of the TCJA are valid through 2022 and your preparer should be providing you with guidance for things you can change to improve your positioning for upcoming tax years.
If you’ve never done your own taxes before, this would not be the best year to try. Do you have questions about the Tax Cuts and Jobs Act? Contact one of our tax professionals.