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Should You Do It Yourself?

March 08, 2001|LIZ PULLIAM WESTON

Not everyone is a good candidate for doing his or her own taxes. Even the most user-friendly tax preparation software is best suited for those with relatively simple returns or those who are willing to spend some time reading about tax law.

Most software programs offer some kind of "help" feature to guide taxpayers, but the quality varies widely. Even TurboTax and TaxCut sometimes refer users to IRS documents or a tax professional when complex or controversial issues are involved.

Who's not a good candidate for do-it-yourself tax software? The math- and research-phobic, to begin with. People who own their own businesses or who are self-employed probably would benefit from professional advice, as would those whose returns are complicated by rental real estate, stock options or frequent stock trading.

People at greater risk of IRS scrutiny also might consider a professional tax preparer. Though the IRS' audit rate is at an all-time low, people in cash-based businesses and the entertainment industry, among others, tend to be at higher risk for review, as are people with high incomes--generally over $100,000.

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