00:03So you've done the hard part and gathered all those important tax documents into one
00:08massive pile and now you actually have to file your tax return.
00:12What do you do?
00:13We're here to help you figure out the best option for you, depending on your situation.
00:23Hi Refinery29, my name is Mallory, I'm 25 years old, I'm from Orange County.
00:29Hi, I'm Flora Jaffrey, I'm 29 years old, I am from Los Angeles, California.
00:33I work in the restaurant industry at Meter D.
00:36I am a recruiter by day, yoga instructor, and actor by night.
00:41My last burger item I bought myself was an exercise bike.
00:45They're the white chunky sneakers, like the platform sneakers.
00:49I just had to buy them because they're so cute.
00:52And joining us again are our tax experts, Lynn and Melissa.
00:56All right, let's dive right in to Mallory's question.
01:00My question for you is, am I better off using a tax software or hiring an accountant to file
01:08my return?
01:09Great question, Mallory.
01:11Melissa, what advice do you have for Mallory?
01:13If you have one W-2 and you have no business deduction, do it yourself because you're not
01:20going to leave any money on the table.
01:21But anybody who's got multiple W-2s, cash income, it's just better to have a tax professional
01:26do it properly so you don't put any red flags to the IRS and get potentially audited.
01:33You know, we have a lot of options when it comes to filing our taxes.
01:37When I filed my taxes for the first time, I actually did free filing.
01:39And it's really simple.
01:41A lot of times they've set it up so that it's intuitive.
01:43They guide you through what you need to do, what you need to look for.
01:46The biggest and the most obvious pro is that you don't have to pay anybody to do this.
01:51Pros of free filing are it's free.
01:54If you don't have an involved return, meaning multiple streams of income, investments,
02:00dividends, all those things, you're like, what is all that?
02:03I have a W-2, then it would be great for you.
02:06You save money and you do it yourself.
02:08You learn more about your finances.
02:11But then a con is, I mean, you could mess up.
02:15You could lose more money than you save by not paying someone.
02:19You could be potentially missing out on deductions that you can take,
02:23expenses to use, confusing some things, leaving things out.
02:28You could make an error that would cause an IRS audit.
02:33So if you're going to do the taxes on your own, I'd absolutely state that having the tax software
02:39is going to be in your best interest.
02:42It's going to ask you every possible question that could possibly be asked.
02:46However, if you skip a section and you don't know taxes enough or the software enough to know
02:55where to go back to correct your answer, you could potentially be in a quandary.
03:01If you're your average Joe, like I said, then you can go use the online tax software because
03:06you have one W-2, you have nothing to worry about.
03:08You're getting the standard deduction and you're done.
03:11Anything where you're making extra money that you have to claim by law,
03:15you don't know what you can write off.
03:17Once I realized that things are getting a little trickier,
03:20then that's when I decided to find an accountant.
03:22They're very knowledgeable on the subject and they can help you get the best return.
03:26If you have a specific situation where you have multiple streams of income, 1099s,
03:33multiple W-2s, they'll know the ins and outs, the whys, and they can explain it to you so you
03:37can
03:37better set yourself up the next year to document everything that you can potentially write off.
03:42However, if you only want to look at the number of dollars that you're going to spend,
03:46then we could say the cost of a tax professional could be a con.
03:52So everybody understands, how do tax professionals charge?
03:55What is the typical range for fees?
03:57I think it depends on who you're going to.
03:59My company is very reasonable.
04:01Like we start off at 250 a return.
04:03But I do know there are other companies that you can go to that charge you.
04:08They say that it'll be a flat rate, but it's not.
04:11They charge you per form that you use.
04:13When you make mistakes, it's going to be massively costly afterward.
04:17So if you're going to this next level in your businesses,
04:20you have to spend money to save money.
04:21I think so.
04:22And it's spending money in the right areas, which hiring people to teach you
04:27is definitely a right area to spend money on.
04:31If you have a specialized career, are they knowledgeable within that realm?
04:36Accessibility is really important to me.
04:38If you're dealing with my money, I need to be able to call you.
04:40I need you to answer my calls.
04:42It's 2020 in the world.
04:45So I think that the professional has to be flexible with the way that the service can be rendered.
04:50You call the company and you get the assurance that they're going to understand your unique situation.
04:56That is instrumental.
04:58Trust your gut when it comes to someone.
04:59If they don't feel right, go with someone else.
05:01There are thousands of tax repairs that you can work with.
05:04So here are some red flags.
05:06If your tax professional tells you that you can't write off anything, you may want to beware.
05:13If your tax professional tells you you can write off everything with no documentation,
05:18you also want to be aware of that.
05:20There have been many changes to the tax code.
05:23If your tax professional has been doing your taxes year after year
05:27and has not made you aware of any changes in the tax code, that might be a red flag.
05:33Because if they are still doing things the way they did them 30 years ago,
05:39then that's not going to help you any.
05:40So I'd ask, do you do continuing education?
05:44Are you up to date with the new tax laws?
05:46Find out what the tax professional is doing to educate themselves on a regular basis
05:51to stay in tune with what's happening now.
05:54Great advice, ladies.
05:56Today we learned about all the different options to file your tax return.
06:00Stay tuned to learn about how to actually file the return.
06:10and just do video function following the differences between your taxpse uders.
06:11If I use for you memory of truth, Ken.
06:11So have to take off anything you want toredit yourself on a regular basis.
06:11OK.
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