Mar
Save on Tax, Don’t Pay the Max
Attention musicians and private teachers: financial experts call your tax situation “complicated!” Want to take some of the sting out of April 15th? Check out your options.
1. Prepare the return yourself.
This is only for the stout of heart. And the government doesn’t care how stout your heart is. If they find a mistake, they’ll get their money—even years after the return was filed. That can hurt since Uncle Sam charges approximately 10% interest on unpaid tax debt. Do-it-yourselfers can download paper forms, file electronically, or use Turbo-Tax.
Pros: cheap
Cons: mistakes; lack of sleep from worry; time-consuming
Price: free (fill out paper or electronic forms yourself); $100 (use Turbo-Tax)
2. Hire a company to do your tax return
H&R Block is the most popular of these companies. Their freelance seasonal staff completes a company training course, allowing them to officially prepare your tax return.
Pros: time-efficient
Cons: mistakes; employees can’t handle tricky situations, but often think they can; lack of expert advice can cost you money in the long run.
Price: $100 to $400
3. Use a CPA
CPAs have extensive training in tax prep and must complete a rigorous exam. Most states require aspiring CPA’s to have a Bachelor’s degree with accounting and business education and sometimes even a Master’s degree or equivalent in accounting–just to take the exam. Many accountants are experts in a particular area. If you choose to use a CPA, get referrals from colleagues in the same field.
Pros: time-efficient; no mistakes; established relationship means you can ask business questions any time (CPAs are not seasonal); most CPA’s know tricks-of-the-trade that lower your payable tax.
Cons: costs more than Turbo-Tax
Price: $150 to $450
