It's not uncommon for us here at Auto Credit Express to get asked follow up questions after someone completes an auto loan. And as tax time approaches, more and more of those questions asked in passing are income tax related, such as: should they E-File their taxes or do we think their financial situation warrants a professional.
Recently, it has become quite popular to file your taxes yourself using the aid of online software. Big names like Turbo-Tax or TaxSlayer have become household names when tax season rolls around. However, is it really the best choice to E-file your tax return? Should you hire a professional or just handle your taxes yourself? Here's our advice.
What Your Auto Loan App Says About You
When it comes to advice on how to file your taxes, often our advice comes not from what we see of your credit, but by how complex your income to debt ratios are. Very complex situations often require complex solutions, and while we may be pro's when it comes to auto loans, we aren't tax pros. So if someone looking for a car loan during bankruptcy asks us, our advice is always to see the tax professionals.
However, what if it's a car loan for someone with really bad credit but their debt to income ratio is fine? Our advice is often just to save yourself the extra money and file yourself and take that tax check and use it as a down payment.
Your Tax Choices
Pro's - Hiring a professional to handle your tax return means you'll be saving yourself a lot of time and frustration. No matter how messed up your income to debt ratio is, they'll know what all the tax language means and where you can get the most bang for your buck. They may also know places that are generally overlooked for more deductions.
Con's - However, you are still responsible for making sure they receive all the documents that they need. You'll also be trusting your personal financial information to someone you may not know; so make sure they are trustworthy and reputable. On top of that, some professionals can charge a large price -- some can be almost $300.
Pro's - This is the most affordable option in many cases; costing anywhere from $20 to $100. Often your state tax filing will be what costs the most. You can file from the comfort of your home at whatever time is the most convenient for you. E-filing is often the quickest way to have your return in your bank account.
Con's - You may miss out on major deductions if your information is entered incorrectly. Also, understanding the tax lingo can be a little frustrating at times. You'll need to make sure you set enough time apart to handle your taxes thoroughly.
The Choice is Yours
In the end, the only person who can decide what is best for your financial situation is you! If you find that you are struggling to explain the in's and outs of your debt to income when applying for an auto loan, our advice is often to let us help you with the loan, then get a tax professional to make sure you don't leave money behind. If you feel pretty confident or you have a relatively simple income to debt ratio, chances are that you will be fine E-filing.
Of course, if you have trouble deciding which E-filing services to use, you could always look at our advice on the best online tax services before you file. After you've made the most out of your taxes, come see us and we'll show you the best way to take that tax return and turn it into a car despite whatever your debts are.