Nobody enjoys completing tax returns. It’s a time consuming, confusing, frustrating and often costly process. It’s also a task we all have to deal with every year. If you’ve gone through a divorce in 2007, your status as a taxpayer has probably changed. Things like alimony and child support need to be considered when calculating your tax liabilities, plus you may now need to classify yourself as “head of household.”            

When it comes to completing your tax returns, you have four primary options, including:  

1. Filling out hard copies of state and federal tax forms and mailing them to the IRS.

2. Completing your returns online using the IRS’ e-file Web site.

3. Purchasing and using specialized tax return preparation software (such as TurboTax or TaxCut) and filing your taxes electronically (using e-file).

4. Hiring a tax preparation specialist or Certified Public Accountant (CPA) to handle much of the work associated with completing your state and federal tax returns on your behalf.  

Out of these four options, hiring a tax preparation specialist (by visiting an H&R Block location, for example) or hiring a CPA is probably your most expensive option in terms of out-of-pocket expenses. Hiring a CPA, however, who is paid by the hour, will be much more expensive than hiring a less trained tax preparation specialist. Depending on your situation, the financial benefits could be worth it, however.  

BENEFITS OF WORKING WITH A TAX PREPARATION SPECIALIST OR CPA  

There are many potential benefits to hiring a tax preparation specialist. In addition to saving you considerable time preparing your tax returns, a professional will likely help you pinpoint tax deductions you qualify for, but that you wouldn’t have known about yourself, if you opt to prepare your own returns. This could ultimately save you hundreds or even thousands of dollars, depending on your situation.         

“Many taxpayers are unaware of many of the available strategies they could deploy to save on their tax bill. For instance, it might make sense to defer a year-end bonus or other income until 2008 if it works to your advantage,” explained John Hewitt, CEO and Founder of Liberty Tax Service, who urges people to file their returns (or at least an extension) on-time.

Working with a professional also provides greater piece of mind. It will help you reduce your chances of making an error when preparing your tax returns, which in turn lowers your risk of being audited by the IRS. If you do wind up being audited, you’ll already have a specialist on-call who is familiar with your personal financial situation and the returns you’ve filed.

Tom Allanson, group president of H&R Block Digital Tax Solutions, said “The most important advice for taxpayers this year is to choose a tax preparer who stands behind his work or a do-it-yourself tax solution that’s reputable, not just at tax time but all year long.” In 2007 alone, H&R Block served more than 20.3 million clients.