Here are my criteria of when you should consider using a tax professional instead of DIY software.
-Any time you have an unusual transaction such as buying/selling real estate, exercising stock options, receiving an inheritance, rental or royalty income. It may be you only go to the tax professional the one year you have the new issue, but you should get some guidance at least that one year. DIY tax software is designed to handle the 80%, any out of the ordinary issue will likely either not be in the software or not be able to consider all the options you have and questions you should ask.
-When you own a business, Schedule C, partnership, S or C Corporation, you should have your taxes done by a professional. It is not a matter of just filling in some numbers on the tax return when you own a business. There are inevitably questions that come up during the year and you need to have a relationship with someone who knows your business and can offer advice when you have questions. In addition, I don’t know many business owners that accounting is the area where they add real value to the business. If the business owner is doing accounting and taxes, there are probably other things being left undone. If the business owner will take the time he or she spends preparing taxes and instead spends that time landing a new customer, the cost of the tax professional will be easily justified.
-You personally are totally uncomfortable with taxes, numbers or software. I have some clients that honestly have very simple returns, but their personality is such that when you mention numbers and the IRS it really stresses them out. It is worth their piece of mind and time to have someone do their taxes for them.
-If all you do is work and get a W-2 and maybe have a little interest or dividend income or even buy and sell some stock, the DIY software can probably handle your taxes just fine and there are a whole lot of folks that fit this definition.
