The abbreviations DIY and DPB are really nothing more than ad-hoc jargon for the purposes of this piece. You probably recognize DIY as standing for “do it yourself.” DPB is short for “done by professionals.” As regards to preparing tax returns, comparing the two approaches — doing your own vs. getting professional help — each has its advocates and advantages. Read on and decide for yourself.
DIY: The “stubby-pencil” and slick software alternative
The “stubby-pencil” method in preparing your tax return requires a pencil with a good eraser, a calculator and lots of scratch paper. Then you get an ink pen and fill out that 1040, worksheets and schedules, and hope your bottom line works out for the best.
On the other hand, slick tax software has been around for quite a while and uses the power of a computer to do all the calculating and form filling. You can even send in your returns electronically and skip the ink and copying part. So tax software has to be the winner in the DIY category.
Slick tax software is designed by geniuses to be used by ordinary people
Professional programmers with the help of tax experts design tax software, with certain reasonable assumptions:
- The user clearly understands everything in the series of “interview” questions posted by the software.
- The user also understands the tax jargon and terminology used in the software.
- If the user enters erroneous or false data, the result will be a flawed tax return.
- The tax software product is no guarantee that the return will be error free. The vendor only guarantees an accurate calculation based on what the user enters.
- If the taxpayer fails to answer a deduction question while completing the return, the software won’t identify a potential deduction. The IRS does not mind if the taxpayer makes an error favoring the IRS.
The peace of mind of the DBP approach
So there definitely are advantages to having your tax return touched by human hands, but the foregoing should not be construed as an indictment of the tax software products out there. Any software is always subject to the GIGO rule — garbage in, garbage out — and it cannot always filter out the garbage before it goes in.
The point is that the taxpayer is alone in the process and could easily overlook deductions and credits. Any problems that might result from errors and the taxpayer must face the IRS alone.
Professional tax preparation — DBP — has significant advantages over the “stubby-pencil” and slick tax software approach:
- No more fuss with buying software and waiting for updates and state downloads.
- The professional tax preparer knows the answers to questions you might not have thought of.
- No more wondering if you have included every deduction and gotten the best result from your tax filing.
- Any IRS questions or audits are handled by the professional you hired.
- The savings in time and potential increased refunds are a definitely positive return on the fee you pay the professional.
Then there’s the valuable but intangible peace-of-mind factor knowing that everything was done correctly. Also, when you hire a tax professional you get the benefit from advice on tax strategies that could save more money in the future.
So if you’re looking to go the DBP route, we would be the professionals in that abbreviation. Contact us and see how our full service tax center can maximize your tax advantages and keep you on the straight and narrow with the IRS.