Is it advisable to use tax filing software or rather hire a tax advisor?
October 5, 2023 | 40,00 EUR | answered by Wolfgang Stricker
Dear tax consultant,
I am facing the decision of whether to use tax preparation software or hire a tax consultant to prepare my tax return. I have always done my tax return myself, but lately I feel like I may not be taking full advantage of all tax optimization opportunities and therefore may be leaving money on the table.
Currently, I am employed in a permanent position, but I also have income from rental properties and capital gains. My income situation has become somewhat more complicated in recent years as I also want to claim various deductions.
I am unsure if I can utilize all tax opportunities with tax preparation software and if I can correctly answer all tax-related questions. On the other hand, I wonder if it is worth hiring a tax consultant and if the costs of hiring one can ultimately be offset by potential tax savings.
What are the advantages and disadvantages of using tax preparation software compared to hiring a tax consultant? What opportunities for tax optimization are available to me, and what risks do I take if I prepare my tax return myself? What are the typical costs of hiring a tax consultant, and to what extent can these costs be offset by potential tax savings?
I look forward to your assessment and to benefiting from your expertise. Thank you in advance for your support.
Sincerely,
Albrecht Halbscheffel
Dear Mr. Halbscheffel,
Thank you for your inquiry regarding the preparation of your tax return. It is understandable that you are considering whether to use tax return software or hire a tax advisor. This decision depends on various factors, which I will explain in more detail below.
Using tax return software certainly has some advantages, such as cost savings compared to hiring a tax advisor. You have the opportunity to conveniently prepare your tax return from home and can usually answer most tax-related questions with the help of the software. Additionally, many programs offer hints and tips for tax optimization to achieve potential tax savings.
However, self-preparing your tax return also carries certain risks. If you are not familiar enough with tax law, you may miss out on tax opportunities or make mistakes that could lead to additional payments. Especially in complex income situations like yours, with rental income and capital gains, it is advisable to consult a tax advisor to maximize all opportunities for tax optimization.
A tax advisor can provide you with personalized tax advice and tailor your tax return to your individual situation. They are familiar with current tax regulations and can help you optimize your tax burden. The costs of hiring a tax advisor can vary depending on the scope of services, but usually range between 100 and 200 euros per hour. However, these costs can be offset by potential tax savings and ultimately lead to long-term savings.
In your case, with a complex income situation and a desire for deductible expenses, I recommend consulting a tax advisor. They will help you maximize all tax opportunities and avoid mistakes. Investing in a tax advisor can pay off in the long run and help you achieve an optimal tax situation.
I hope that this information was helpful to you and I am happy to assist you with any further questions.
Best regards,
Wolfgang Stricker
Tax Advisor
