Quarterly  Newsletter         The Pitfalls of doing one's own books (and taxes) Thanks to the advent of Quickbooks, Peachtree and other "off the shelf" software, the ability of doing one's own bookkeeping is made much easier than ever.  Unfortunately, these software packages can only do what they are told to do.  In other words, they can't "think" in terms of the classifcation of an expenditure.  Granted, while the current economy is nothing short of a disaster, it is false economy to think that bypassning a competent professional will save money.  Typically, the business owner takes a backup of the accounting records on a thumbdrive or other such instrument to an Enrolled Agent or other authorized tax preparer to produce and file a tax return.  An Enrolled Agent or other tax professional will in turn "disect" the file to ensure that all deposits and expenditures have been coded correctly and are where they should be.  Naturally, this is going to add to the cost of the return and in the long run will be more expensive than if a professional had been engaged in the first place.  If the books are messy enough, often major "repairs" are in order and that can run thousands, perhaps tens of thousands of dollars.   The same can be said of preparing one's own tax returns.  There are a litany of free tax software programs available as well as using the Internet.  The risk here is making an error and have it rejected, and as a result, having a refund delayed.  In addition to this, an audit may be in order and once this happens, the risk of this exists for perhaps years.  For instance, for tax year 2009, the Make Work Pay credit which was available was missed on many tax returns and thus created a bottleneck in processing these returns.  Once again, the advice is to invest a little money and have a tax professional prepare the tax return.