DIY tax preparation can cost you

Posted: Mar 29, 2010 9:15 PM by Courtney Meznarich
Updated: Mar 29, 2010 9:15 PM

Do-it-yourself projects around the house are one thing, but do-it-yourself taxes can be a whole different monster, and that's become clear in this current recession.

Some major tax specialists are reporting huge drops in the number of returns they're filing this year, while consumer tax products have seen a ten percent increase in sales.

But going it alone can mean big mistakes, so we've uncovered some tips to help you prepare for preparing your own tax return.

A wise man once said that it takes more brains and effort to make out the income tax form than it does to make the income, and CPA Brooke Salvini says this year is not the year to make mistakes. "Definitly this is not the time to leave money on the table," she says.

It costs around $230 to have your taxes prepared, and in this day and age, that can be a big chunk of change, especially when you can do-it-yourself for around $20- $70.
Oceano resident Brandon Lenhart files online through tax software. "I've used it for the past three years and had no problems at all," he says. "And it was cheap."

But cheap could cost you.

"You hate to learn six months later or a year later that, oh darn, I missed that deduction," says Salvini.

There are several new deductions this year, thanks to the American Recovery and Reinvestment Act, and those deductions are easy to miss if you don't know what to look out for.

Salvini says if you sold a home or even have a child in college, it'd be a benefit to get professional advice.

Ken Keller, who says he hasn't even thought about trying to prepare his taxes on his own, agrees. "To spend an extra hundred or hundred and fifty dollars to make sure it's done right and make sure I've been asked all the right questions and understand what I'm doing I'm willing to pay that extra amount of money just for the comfort and security."

But no matter how you go about beating that April 15th deadline, one thing is sure.

"It's always a shame to leave money on the table."

Salvini says if you have a 1040 EZ or a Schedule-A to file, it would probably be o.k. to save money and file on your own.
But, she adds that even using a CPA once, can uncover deductions that you didn't claim before.