Tax Season Software or Tax Professional? How to Make the Right Call

We’re right on the cusp of tax season, which means you’ve got a choice to make: Will you file with a tax season software program, or call on a tax professional?

I know I may seem biased on this topic. But as the tax pro in your corner, I want you to go the route that makes the most sense for YOU. My goals for you are big-picture: A peaceful tax season and sustainable financial health. 

And because your tax situation is unique, I can’t prescribe a black-and-white solution here. But I will do the heavy lifting of supplying the facts for you – and I’ll let you make an informed decision from there. 

Tax Season Software 
You know about TurboTax (thanks Super Bowl commercials). You know about H&R Block (there’s one on many-a-block). You may even know about the IRS’s Free File program. Many of these software programs are appealing because they’re “free” — or close to it. In a tough economy where taxes are burdensome, that can be appealing.

Using software for tax season can be appealing if you…

…are on a tight budget. Many “free” programs exist and if you do have to pay, it can be “cheaper” than paying a professional tax practitioner. Simple return filers will especially find this appealing. 

…want to DIY. You’re able to personally enter your income, deductions, and credits.

…want schedule flexibility. You can work on your return whenever it’s convenient for you. And some programs include on-demand support for when you hit tax-jargon overload. 

The caveats
But of course, software has its shortcomings — that’s one of the reasons people get on my calendar. If you’ve got any complications to your tax situation (like multiple income streams, less conventional deductions, or estate, trust, or gift taxes, for example), software costs increase and can miss things. 

If you’re trying to strategize how to pay less on taxes or just make smart tax moves, you’re on your own. These programs don’t get well enough acquainted with you to find lesser-known credits you could claim, find income sources you need to report, and they don’t advise you on the long-term impact of your decisions. They’re strictly concerned with compliance.

And maybe the biggest red flag: Software is only as good as the information you give it. Because you’re human, you might make simple (but costly) mistakes, and your tax software won’t stop you because it doesn’t know to look out for those. 

Tax Professionals
Getting help from a professional preparer (like my Mauriello Enterprises team and me) can improve your tax season experience in a lot of ways. You will benefit from certified tax help if you…

…have a complicated tax situation. Tax preparers stay current on the ever-changing tax regulations that can turn your tax situation upside down, and your complicated return isn’t a problem for us. From family tax dynamics to unexpected life changes, we can show you the most tax-savvy course of action (with all the possible credits and deductions). That’s what a good tax pro lives for.

…get stressed by taxes. By working with an expert, you get the confidence that your return will be accurate and compliant. As qualified tax preparers, we can save you hours of mental (and emotional) energy spent inputting documents and deciphering forms. You’ve got life demands to take care of. Let us do what we do best.

…want guaranteed protection. Should you get audited, a tax expert can defend you before the IRS. As licensed preparers, we have a special tax pro direct line with the IRS and know IRS-speak. We can help you mitigate penalties and determine the best course of action. 

The “drawbacks”
Will you have to pay for our services? Yes. And that amount fluctuates depending on the complexity of your return. But while you may “save” with free software on the front end, you may not actually save in the end-end. I’ve seen people walk through the door time after time who trusted the DIY method and ended up floundering and missing opportunities to save on taxes.

Is there the real possibility that the tax professional you choose can make errors? Of course. Errors are possible. But those errors are mitigated by doing a review of the tax return – like Santa Claus, we’re checking yours twice.

And of course, there are bad apples to watch out for. But this isn’t cause to ditch tax preparers entirely – it’s just a call for exercising caution. Look for a tax preparer who, at the very least, is available year-round, has a credible history, and has a valid Preparer Tax Identification Number. (For the full safety checklist, check out the IRS’s tips for choosing a tax professional.) 

So… how do you choose?

Ultimately, it comes down to your circumstances and preferences. Before you decide, think about…

1. How complex your tax situation is. Just working with a single W-2 and no deductions? You might benefit from going the tax season software route. But even then, you won’t get the personalized advice you need for maximizing credits and deductions, or for making smart tax moves for the long run. 

2. How much time you’re willing to give. The IRS estimates it will take you about 13 hours to file Form 1040. 

3. How much expertise you have. Maybe you’ve filed your own return in the past and your tax situation hasn’t changed much in the past year, so you feel comfortable going the DIY route. It’s still wise to put your financials into expert hands – tax regulation can change at the drop of a hat, and you can easily miss out on big tax savings opportunities that a pro would be able to help you with. 

 

This isn’t about figuring out which way is better – it’s about figuring out which way is best for YOU. That’s something only you can decide. My honest advice is to really consider all the factors involved here. This is your financial well-being you’re dealing with – it shouldn’t be handled lightly. 

And if professional help is the right move for your financial well-being this tax season, then let’s chat:  Schedule a time today.

To your financial wellness,

Mike Mead, EA, CTC

How to Leverage Your Adjusted Gross Income for Bigger Tax Savings

 

Adjusted Gross Income (AGI): Your gross income, adjusted by payments like retirement contributions, student loan interest, health savings contributions, etc. (And, the IRS’s starting point for calculating how much you owe them every year).

I’m getting right to the point here, I realize. That’s because it’s a foundational part of filing your 2024 taxes. And, it’s my job to point you toward allllll the tax-smart opportunities (aka – credits and deductions that could make your wallet a little bit fuller).

How do you calculate your adjusted gross income?

Start by adding up all your income sources: Wages (check your W-2s or 1099s), tips, interest, capital gains, business income, retirement income, self-employment income, and anything else you can think of (I’ll spare you the exhaustive list – the IRS has already made one).

Then, from that total income, subtract any above-the-line deductions (again, the IRS's list, not mine):

Alimony payments (aka, payments to an ex-spouse)

Educator expenses up to 300 dollars (or 600 if your spouse shares your educating passion)

Certain business expenses of reservists, performing artists, and fee-basis government officials

Deductible Health Savings Account (HSA), IRA, and retirement contributions

Moving expenses if you’re military

Deductible self-employment taxes (50 percent of the self-employment tax you pay and health insurance premiums)

Student loan interest

Now you have your adjusted gross income — be mindful of special requirements for many of these categories when claiming the amounts. And remember: The smaller your AGI, the bigger the credits and deductions you’re eligible to claim on your return.

Stake your claims

With your calculated AGI in hand, you’ve got two options: Subtract either the standard deduction or itemized (“below-the-line”) deductions to determine your taxable income.

Charitable contributions are one of the big below-the-liners to consider. Though most people claim the standard deduction, if you itemize, charitable deductions are generally limited to 60 percent of your AGI.

Medical expenses apply here too, as long as they exceed 7.5 percent of your AGI.

You can also deduct up to 2.5k of student loan interest you’ve paid. It phases out at an AGI of 75–90k (single) or 150–180k (for married filing jointly).

Traditional IRA contributions may also be deductible if your AGI fits the bill: For 2025, the deduction phases out at 73–83k (single) or 116–136k (married filing jointly).

A low AGI could help you qualify for credits like…

The Child Tax Credit (worth up to 2k per child under 17). It begins phasing out at an AGI of 200k (single filers) or 400k (married filing jointly).

The Earned Income Tax Credit depends on your AGI, filing status, and the number of qualifying children.

Education credits like the American Opportunity Tax Credit (up to 2.5k per eligible student for tuition and related expenses). Phases out at an AGI of 80–90k (single) or 160–180k (married filing jointly). And if this credit brings your tax owed to zero, you can have up to 40 percent of the remaining amount refunded to you (up to 1k).

The Saver’s Credit – a little boost for contributing to your retirement plan . This one phases out at an AGI of 39.5k (single) or 79k (married filing jointly) in 2025.

The Premium Tax Credit helps cover health insurance premiums. Your eligibility depends on your income being 100–400 percent of the federal poverty level (calculated based on – you guessed it – AGI).

Slimming down

The key to maximizing benefits here is keeping your AGI as lean as possible year-round. You have to practice healthy tax habits (just like in life) – like making regular retirement and HSA contributions and harvesting your tax losses.

I’m aware that at the time I’m writing this, you don’t have a whole year to get last year’s AGI in tip-top shape. So how can you slim down your AGI before tax season? (Hint: It’s not with a January juice cleanse. Though, kudos if you’ve tackled that particular improve-your-health strategy.)

Making traditional IRA or HSA contributions can still lower your AGI for the 2024 tax year filing – they count as deductions for 2024 up until April 15th. So, now’s the time to make those contributions a priority.

I get it – all this may look like tax mumbo-jumbo to you. The good news is, that I’ll cover your adjusted gross income with you during your tax appointment. Which, if you haven’t yet scheduled, now’s the time. You’ll have lots more days and times to choose from now than if you wait until March. Schedule your appointment today.