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Tax filing season starts Monday, so should you do it yourself or hire a pro?

IRS free file also begins Monday
Posted at 8:25 AM, Jan 27, 2020
and last updated 2020-01-27 11:22:26-05

DENVER — Starting Monday, the IRS will begin processing tax returns for the 2019 tax year. Denver7 looked into options for filing your taxes, the various costs, and when it’s worth seeking professional help.

John Dundon, president of Taxpayer Advocacy Services in Greenwood Village, said clients generally come to him when their financial situations become more complicated. This could include examples like buying a rental property, having income from multiple states, or using cryptocurrency. He said it’s important to do some research before hiring someone.

“You want to make sure you go around and check out the person you’re considering hiring, look at their referrals, check out their social media profile, check out their affiliations, understand their experience,” he said.

The National Society of Accountants found the average cost of a tax preparer last year was $188 for a Form 1040 and state return. The price increased to $294 for a return with itemized deductions. There are also additional charges for each additional form. Dundon said there are advantages to working with a professional — ideally an enrolled agent and, if possible, someone who works with other professionals.

“We have definite evidence that the No. 1 correlation between making a mistake on a return and filing an accurate return has to do with the number of eyes looking at the numbers you’re entering,” Dundon said.

For taxpayers who are confident that they can do it themselves, a popular option is to use software offered by companies like TurboTax or H&R Block. Vanessa Jupe, vice president of digital products and services with H&R Block said the software is designed to ask all the questions an accountant would ask.

“Really, it’s an interview-type experience,” she said.

The software will ask questions that determine your deductions — for example, whether you have children, if you have children in college, and other information that could impact your refund amount.

Most of the major companies offer several software packages, including a free option for more simple returns. For more complex returns, you may have to pay for the more premium software. Some of the paid options also include the ability to chat with a real accountant.

“You can start on your own and if you need help from a tax pro, there’s somebody there always kind of sitting beside you almost and you can chat with them in real time,” Jupe said.

For those who are hesitant to do their own taxes, but can't afford to hire a professional, there is free help available.

The Community College of Denver is offering its Tax Help Colorado service for free to anyone with a household income under $56,000. Students who have earned an advance tax preparation certificate will be preparing and filing returns for people.

“We usually do 500 households per year, generating over a million dollars in federal and state income tax refunds," said Associate Professor Brian Gilsdorf.

The Tax Help Colorado program will be available on Saturdays and Wednesdays from Feb. 1 through March 14.

The IRS also offers several resources to help people find a licensed tax professional or file for free. To file for free, your adjusted gross income must be under $69,000. The IRS estimates 70 percent of U.S. taxpayers qualify to file for free.