Should You Do Your Own Taxes? How To Decide Between DIY and a Tax Professional

Goodboy Picture Company / Getty Images
Goodboy Picture Company / Getty Images

It’s everyone’s favorite time of the year — tax season. The IRS announced on Jan. 23 that the agency will begin accepting and processing 2022 tax returns. An estimated 168 million individual tax returns are expected to be filed, the IRS said, with the majority coming before the April 18 deadline.

See: All the States That Don’t Tax Social Security
Read: 3 Ways Smart People Save Money When Filing Their Taxes
Find: 6 Types of Retirement Income That Aren’t Taxable

There are two options when it comes to getting your taxes done: doing it yourself or hiring a tax professional. DIY taxpayers are typically young adults just starting out and with fewer assets. According to an IRS study, 53% of all 2021 taxpayers paid a tax professional, but members of Gen Z were much less likely than other age groups to do so, per USA Today. Middle-income earners making $75,000 to $90,000 were the most likely (59%) to hire a tax pro.

A tax professional can help in many situations — but in some cases, doing your own taxes can be fairly simple. However, it all comes down to your preferences.

When To Do Your Own Taxes

If your taxes are straightforward — you have limited income sources and you plan to take standard deductions — USA Today suggested that doing your own taxes may be the way to go. Not only can this save you money, but you could get it done quickly with tax software (or by filing out free forms found on the IRS website).

If your deductions exceed the standard for this year ($12,950 for single filers, $19,400 for head-of-household and $25,900 for married couples filing jointly), it may be a good idea to itemize your deductions, USA Today indicated. But if you’re uncomfortable with the extra paperwork, accountants say you should consider hiring a professional.

When To Hire a Tax Professional

Hiring a tax pro may be a good idea after a major life change, like getting married or divorced, having a baby, buying or selling a house or business, retiring or experiencing a health issue. USA Today stated that paying a tax pro may also be smart if you have multiple income streams, investment losses, an inheritance or settled an estate.

Take Our Poll: How Much of a Tax Refund Do You Expect in 2023?
IRS Tax Tip: How Gig Workers Can Stay on Top of Their Taxes

Before hiring a pro, the IRS noted that you should look for a professional holding an IRS Preparer Tax Identification Number (PTIN). You can check the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to find accredited professionals in your area — or reach out to professional organizations that have tax preparers.

More From GOBankingRates

This article originally appeared on Should You Do Your Own Taxes? How To Decide Between DIY and a Tax Professional