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By Jill Schlesinger
February 16, 2016

The IRS says more than half of taxpayers hire someone to prepare their taxes — but who actually needs to hire a pro?

If you have a complicated financial life, you may want to pay up for a professional. A few examples:

  • Those who are self-employed may want someone who is familiar with Schedule C, who can advise on the best type of retirement accounts, and who will let you know when you should file a Form 1099 to report any payments made to others.
  • If you had a lot of investment activity, sold property or have to file an estate tax return for someone else, you may want guidance.
  • And if you are one of the over 5 million taxpayers who are subject to the Alternative Minimum Tax, a tax professional may be able to minimize the hit.

Tips for Solo Filers

If you are ready to go it alone, be sure to e-file. The IRS says that the the error rate for a paper return is about 20%, compared with an e-file return error rate of about 1%.

You will also get instant notification of receipt, ensure that your return goes to the correct processing center, and be able to check the status of your tax return or tax refund at any time. If you are due a refund, meanwhile, there’s an extra bonus: You’ll get your money faster if you e-file!

In terms of tax prep software, the IRS provides taxpayers whose incomes are $62,000 or less with free tax prep software called “Free File”; it’s available through IRS.gov.

If you don’t qualify, you are left with three main choices: Turbo Tax, H&R Block and Tax Act. Most tax preparers that I spoke to say that Turbo Tax may be the best bet, even though it costs more than its competitors. They cite Turbo Tax’s easier-to-use platform and the interface’s ability to save time and reduce errors.

Advertiser Disclosure

The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

To find out more about our editorial process and how we make money, click here.

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