I run a small lawn care business with two employees. Last year I paid a tax prep company $1,200 to file my business and personal returns. This year I decided to do it myself using a $79 software package. It took me about six hours spread over two weekends, but I saved over $1,100. I was nervous about deductions and payroll forms, but the software walked me through everything. I double-checked the numbers and filed electronically. Just wanted to share in case anyone else is on the fence.
Tax filing
I saved money by filing myself instead of hiring a company
Six hours is not bad for a first time. Are you confident about the payroll part though? That's where I'd be worried.
I tried DIY a few years ago and missed a depreciatin schedule on equipment. Cost me more in amended return fees than the preparer would have charged. Not saying you did anything wrong, just that hidden stuff can bite later. Do you have any plans to review it with someone before next year?
The software is fine for simple returns. With two employees, though, you've got quarterly filings and W-2s. Did you handle those separately or does the package cover it?
I run a similar service business and have been filing my own for three years now. The first year took me about eight hours, now it's down to three. The key is keeping a clean ledger throughout the year so you're not digging through receipts in April. I use a separate spreadsheet for mileage and supplies. Saves a ton of time.
What software did you use? I'm considering switching from a preparer too.
The savings are real but I'd factor in your time. Six hours at what your hourly rate is for the business. If you bill $50 an hour that's $300 of your time, so the real savings is closer to $800. Still positive, but worth thinking about whether you enjoy it. I personally hate the paperwork and pay someone because it frees me up to work on client jobs. Different strokes.
My concern would be if your business grows or you buy a truck or something. The forms get more complex quickly., But for now if it's straightforward, good for you.
There is an IRS free file option for under a certain income but I don't think it covers payroll. Has anyone used the direct file pilot? I'm curious if it's any good for schedule C.