Taxes and the Solo Mom
If you haven’t noticed, because you are a busy Solo Mom with a hectic life, it’s that time of year when accounting firms and software companies flood the media with promises of free money in your pocket for using their personnel and products. The basic gist of their pitch is that you have to be a rocket scientist when dealing with your taxes. With that kind of pressure, it’s pretty darn tempting to take advantage of their services.
After all, who wouldn’t want to feel smart about their taxes? Who wouldn’t want to make sure that every hard-earned penny doesn’t go into a stupid-taxpayer slush pile and sponsor some politician aide’s manicure or trip to Cabo? As a Solo Mom, you know how to stretch a dollar and make the most of every situation. So when you start hearing about all those dollars that people have inadvertently let float away, you may feel that it’s time to pay attention—especially if you’re a Solo Mom.
That’s why we’re here to break down the most basic questions about your taxes: Should you do your own taxes? Do you need an accountant? Long story short, it depends on whether or not your taxes are simple or complicated.
If you work in a job where money is automatically deducted from your paycheck every time and you do not pay child support or alimony to a spouse, then most likely you are going to have a fairly simple tax return to fill out.
You can probably use a program that guides you through the process and file your returns yourself. As many of these programs point out, filing may not even cost anything. This is especially true if you are the head of household and/or sole provider.
Sometimes taxes make people uncomfortable, especially if they are unusually complex. The tax system in the United States is a source of infinite op-ed pieces, political stump speeches, and late-night jokes. Even Albert Einstein was said to find taxes confusing. The fact is that doing your taxes can be extremely stressful.
If you work from home, are a consultant, have two jobs, have registered under the Affordable Care Act for health care, have started a college savings plan (529) for your children, have a work-related IRA, or suspect your ex reports child support differently than you do, among others, it may benefit you to enlist some help.
Using tax-preparation software
The cost of tax-preparation software ranges from approximately $13 to $35, and this covers an array of features, including some that allow you to submit a simple 1040EZ for free. Taxes can be filed online, and these programs will save data so that you can work at your own pace. Some of the programs allow you to access online representatives with questions and seek their advice. The most popular of these programs are geared toward simple tips to guide you through the process, while others work a bit more rigorously to ensure that all the tax forms are included and completed accurately. If your return is fairly straightforward and you are comfortable with online software and its ability to answer your questions, then this is definitely the way to go.
The human touch
So why hire an accountant? Accountants are much more costly, and what do you get for fees that can begin at $400? Someone who does taxes all year long and has more expertise and is trained to find the deductible costs and know the latest tax laws. For instance, the anxiety about making mistakes and possible auditing can cause you to understate deductions, especially if you run your own business. How much can you deduct before a red flag goes up? An accountant will know the answer to that and other questions.
If at all possible, see if you can get a referral to an accountant who is used to dealing with people in the same business as you. Academics who give lectures for fees or scholars researching books may have a different set of deductions than entrepreneurs, small-business owners, or performers. A good accountant is a valuable asset if you are nervous about taxes in general. Often, and for an additional fee, an accountant will give you auditing insurance, which will save you time and money, and reduce any stress should you happen to be audited.
If you prepare to meet with your accountant with all your expenses and deductions listed in a document or a spreadsheet, you will be able to focus on some of the larger issues in your financial picture. Be advised that not all accountants will take the time to give you financial-planning advice, but many will throw out suggestions to help you file smarter returns. This alone might make their help with your taxes seem like a worthwhile investment.
An accountant can also be helpful if your child needs financial aid for school or is going to college soon. The process of applying for college financial aid, while intended to be simple, can be stressful and convoluted. Colleges ask you to fill out either Free Education for Federal Student Aid (FAFSA); Institutional Documentation Service, or IDOC; or College Scholarship Service (CSS) profiles—or all of the above. All these forms rely on your tax forms and often link directly to them online. These forms usually are due in early March, before the April tax deadline, and you want to make sure you have done your taxes correctly.
Whatever you choose to do, remember that taxes are a part of life, and once they are done, you can move on to more enjoyable activities—like going to the dentist!
Margot Kessler, a screen and television writer living in Los Angeles, is the sporadically witty Solo Mom of two lovely daughters.
Please feel free to contact us with any comments or questions.