So it is time to file your taxes and you are boiled down to whether you would do it yourself or hire a certified public accountant (CPA) to get it done for you. Now some people might advise that people who have many investments with employees and different income streams might need to hire an accountant so that they can free themselves of the much paperwork.

And that those that have businesses that aren’t as complicated like salary earners who have little or no investment can use online tax preparers and do the filing themselves. However, we prefer to leave the choice to you after we show you the pros and cons of both sides; an accountant or an online tax preparer. Then you would see for yourself which is better for you. So without any more delay, let’s get into it.

Hiring an Accountant

An accountant or a CPA has a good background and education in accounting. Also, in most cases, they have taken part in examinations and certification tests to prove that they are knowledgeable in the theory and practical aspects of the field.

An accountant knows how to deal with various types of business regulations, understands corporate governance structures, knows how to perform financial statements for businesses, and how to performs audits.

They are better at handling real estate transactions, stock market investments and transactions, a business with paid employees (as we mentioned earlier), inheritances, major life events like marriage, death, or birth), forgiven debt, and businesses with multiple income streams.

The things you can benefit from hiring an accountant are as follows:

1. Accountants use advanced programs to scan your information, organize line items and forms correctly. And these programs/ are usually more sophisticated than the ones that are opened to the public. So with these advanced programs, there is too little a chance that your tax returns would get errors.
2. An accountant or a tax professional can help you make valuable tax-saving suggestions too. He or she can advise you on how to save more and reduce your taxes on capital gains.
3. They are also there for consultation which makes it easy for you to ask questions about your tax and finances anytime.

Pros of hiring an accountant

• Can handle tax filing for big companies.
• They use advanced tools.
• Can give advice based on your current tax records to help you save more money.

Cons of hiring an accountant

• Tax filing is only a part of their job and not their main focus.
• Takes weeks to prepare tax documents.

Using an online tax preparer.

Tax preparers can sometimes be referred to as enrolled agents (EAs) or tax specialists. They have a mastery of the tax code instead of general financial knowledge as in the case of accountants. And though their education is not broad, it is centered toward and around tax law.

Tax preparers also always update their knowledge because tax laws are always changing. However online tax preparers are certified tax preparation that helps businesses who earn under $69,000 per year file their tax quickly and easily. And if the business earns more than that, it would need to have the majority of its earnings reported on a W2 form to use online tax preparers.

They are also best for investments below 401(k) or IRA, independent contractors with no employees whose income is reported on a 1099 form. Dependents can also benefit from online tax preparers.

A very good example of an online tax preparer is Studio Tax. They are one of the first software packages that were available in Canada for the provision of timely and to-the-point tax solutions for both simple and complex situations. Their services can be accessed online and offline from anywhere in the world. And their user interface makes it easy for users to file their taxes quickly and without any need for technical skills.

The things you can benefit from using an online tax preparer are as follows:

1. An online tax preparer is cheaper than hiring an accountant. In some cases, like with Studio Tax, it is FREE and can be accessed online/offline. This means that you can prepare or file your tax from anywhere in the world at any time with little or no fees involved.
2. Using an online tax preparer is also very fast. As long as you have all the documents you need ready, you can start and finish within an hour or less instead of waiting for weeks with an accountant.
3. Finally, you don’t need to complicate matters because the software is very easy to use. If you don’t have too many investments, sources of income, or deductions, then an online tax preparer would help you file your taxes without any delay or complications.

Pros of a tax preparer

• It is fast and cheap, sometimes free.
• You can file your tax anywhere at anytime
• You don’t need to show someone else your financial state.
• The software is specially created for tax filing purposes and is always updated with new tax laws.

Cons of an online tax preparer

• It cannot handle tax filing for big companies or businesses with a lot of deductions and employees.

Our Verdict

After looking through the pros, cons, and duties of an accountant and the online tax preparer, we can say that if you have a large company with many employees or you have a lot of paperwork work involved, you can hire an accountant. However, with the recent upgrades, many online tax preparers can handle even complex tax situations.

Sean Cooper is the bestselling author of the book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians, available now on Amazon and at Chapters, Indigo and major bookstores, and as an Audiobook on Amazon, Audible and iTunes.