DIY or hire a pro: How should you do your taxes?

Best way to do your tax return

January is one of my favorite months. The craziness of the holidays is over, I’ve got my goals for the year ahead laid out, spring is on the way. There’s just one thing that upsets my zen — it’s also time to start thinking about taxes.

Let’s face it, unless you’re an accountant, doing taxes is no one’s idea of a good time. In a 2018 TD Ameritrade survey, 47 percent of Americans said they’d rather clean out their garage than do taxes, and 35 percent said they’d rather pay a visit to the DMV.

Unfortunately, filing your taxes isn’t a chore you can get around. The question is, what’s the best way to do it?

You’ve essentially got three ways to approach it:

  • Crunch the numbers and fill out paper forms
  • Let tax software run the calculations for you
  • Hire a tax professional to do the heavy lifting

Each one requires a different commitment of time and money and comes with both pros and cons.

Here’s what you need to know to make your choice.

Option #1: DIY a paper return

  • Accuracy: Potential for errors may be higher if you’re not double- and triple-checking your work
  • Cost: Free
  • Time: Simple returns can take a couple of hours; more complex returns can take a week or more to prepare
  • Who it might be right for: Tax filers who have simple returns or don’t mind a longer wait for their refund (six weeks for paper returns versus three for electronic returns)

Filing a paper return seems a little old-fashioned in this digital age. But, it might appeal to you if you just like doing things by hand or you have a straightforward return.

“I’ve always filed on paper and I don’t plan to stop. I’m not comfortable using computers with personal information.” Beverly K., Flower Mound, TX.

The biggest advantage is that it’s completely free. You can usually find the federal and state tax forms you need at your local library or post office. Depending on how complicated your taxes are, you might be able to fill out the forms in a few hours and drop them in the mail.

Sounds simple enough, but there are some downsides, starting with the potential for errors. The overall error rate for paper returns is 21%, which means you have a 1 in 5 shot at getting something wrong. Something simple like transposing a number on your income could result in a bigger tax bill or a smaller refund.

Even if you get all the numbers and decimal points in the right places, you’re still relying on your own tax knowledge and what you can glean from the internet to finalize your return. If there’s something you don’t understand, that can add time to the process. Making a wrong guess or relying on incorrect information could result in a flawed return and even trigger an audit.

The other major downside with filing a paper return is that you’ll be waiting longer for your refund if Uncle Sam owes you money. According to the IRS, it can take 6 to 8 weeks after your paper return is received for a refund to be issued.

If you don’t need the money for anything right away, that might not be an issue. But if you’ve got a pressing home repair that needs to be done or you’re trying to pay off some credit card debt, those few weeks can feel like an eternity.

Option #2: Use tax filing software

  • Accuracy: Many tax software programs now come with accuracy guarantees to minimize the potential for errors
  • Cost: $0 if you qualify for Free File; up to $150+ if you don’t
  • Time: Less than an hour for simple returns; 1-2 days for more complex returns
  • Who it might be right for: Tech-savvy filers who want to save time and don’t mind paying a little more to ensure accuracy

More taxpayers are using online tax programs to e-file, me included. Over 55 million Americans prepared and e-filed their returns in 2018 and it’s easy to see why.

E-filing is more accurate, for one thing. The IRS estimates that the error rate for electronically filed returns is just a half a percent. Online tax software programs often have checkers or screeners that review your return and point out errors so you can fix them before you file. That’s reassuring, especially if you’re a first-time filer who’s worried about making a mistake.

“I’m in grad school, have two part-time jobs and no assets. I’m still happily e-filing for free and plan to do so as long as they let me. It takes me about ten minutes to do my taxes.” Jessica M., Denver, CO.

Most online and downloadable tax programs use a question and answer format to guide you through preparing your return. The program decides which forms you need to fill out and walks you through it step by step, which can be less time-consuming than filing on paper.

Since I’m a freelancer with business income and deductions, it usually takes a couple of days for me to completely prepare my return online. Simpler returns can be completed in a jiff. I used tax software to help an older relative do her taxes in about 20 minutes.

Tax software can also look for any deductions or credits you might have missed, and you can get your return faster when you e-file. The window for getting a refund via direct deposit is three weeks or less for most people, so there’s less waiting and watching the mailbox for a check.

The downside, of course, is that unless you qualify for the IRS Free File program, you’re going to pay something for whichever tax program you use. The more complicated your return is, the higher the cost generally climbs.

This table highlights costs for four of the most popular online tax software options:

ProgramFederal CostState CostNotable FeaturesWho It May Appeal To
TurboTaxFree Edition - $0
Deluxe - $39.99
Premier - $59.99
Self-Employed - $89.99
$0 for Free Edition; $39.99 per state for all other versions- Live CPA assistance available for an added fee
- 100% accuracy guarantee
- Maximum Refund guarantee
Filers who:
- Have simple returns
- Own a home or have children
- Own a rental or investment property
- Are self-employed
H&R BlockFree - $0
Deluxe - $29.99
Premier - $49.99
Self-Employed - $79.99
$0 for Free version; $36.99 per state for all other versions- Tax pro review
- Easy import of tax forms
- 5% refund bonus when you add some or all of your federal return to an Amazon gift card
Filers who:
- Have children or are married
- Own a home
- Make charitable donations
- Freelance
- Own a small business
TaxSlayerFree - $0
Classic - $17
Premier - $37
Self-Employed - $47
$0 for Free version; $29 per state for all other versions- Easy to use interface
- File taxes from anywhere
- 100% Accuracy and Maximum Refund guarantees
Filers who:
- Have simple returns
- Don't need a lot of extra bells and whistles from their tax software
- Need a lower cost filing option
TaxActFree - $0
Basic+ - $9.95
Deluxe+ - $29.95
Premier+ - $34.95
Self-Employed+ - $49.95
$0 for Free version; $19.95 for Basic+; $36.95 for all other versions- Free technical email, chat or phone support
- Access your return for up to 7 years
- 100% Accuracy Guarantee
Filers who:
- Have investment income
- Want to maximize deductions
- Need to file business and personal taxes

All information shown is as of January 10, 2019, and may be subject to change. Please refer to each company’s website for the most current, detailed information available.

Option #3: Pay a pro

  • Accuracy: A tax professional may be less likely to make an error
  • Cost: $150 – $500 and up, depending on complexity
  • Time: Virtually none for you but it could take several days or weeks for a tax preparer to finish your return
  • Who it might be right for: Business owners or tax filers with extensive itemized deductions

Hiring someone else to do your taxes takes the pressure off. You don’t have to put in the hours or days making calculations; you drop off your paperwork and go back later to pick up your finished return. It can also give you more peace of mind if you trust your tax preparer to go over the numbers carefully and make sure everything is right.

A tax professional is also better equipped to handle trickier returns or tax situations. If you recently got married, for example, you might be wondering whether to file jointly or go with separate returns. Tax preparers should be up to date on tax law changes, which is always helpful but especially when there’s a major round of tax reform like there was in 2018.

All that expert advice doesn’t necessarily come cheap, however. According to the National Society of Accountants, the average professional fee to prepare and file a Form 1040 and state return without itemizing is $176. If you itemize with Schedule A, the average fee increases to $273. Business owners who file Schedule C pay an average of $457.

“I’ve hired a licensed tax preparer to prepare my return for the last ten years. My husband and I each own a business and we have investment property and some other complexities. My tax pro knows so much about taxes, there’s no way I could minimize our liability to the extent she does (and frankly, I’m not interested in learning how to do it). We pay about $700, but we get it back in tax savings.” Kimberly R., San Diego

Ready to choose? Ask yourself these questions

I’ve done my taxes using a professional and on my own with tax software Even though I’m self-employed, the software was the better bargain for me, although your experience may be different. The times I’ve hired a pro, it was nice not to have do the legwork.

Consider the following:

  • How much time do I want to put into my tax return?
  • How much am I willing to spend to get my taxes done?
  • If I’m getting a refund, how soon do I want to have it?
  • Do I know enough about the tax code to file on my own?
  • Do I have any special situations that might make using a tax software or hiring a professional the safer choice?

At the end of the day, it comes down to what you feel most comfortable with. Your taxes have to be done after all, but there’s no reason taxes have to be a source of stress.

Rebecca Lake is a freelance writer specializing in personal finance and small business. She lives on the North Carolina coast with her two children. Opinions are her own.

Haven Life Insurance Agency does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.

Haven Term is a Term Life Insurance Policy (DTC 042017 [OK1] and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. Policy and rider form numbers and features may vary by state and may not be available in all states. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Our Agency license number in California is OK71922 and in Arkansas, 100139527.

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