First, many NRIs do taxes on their own using tools available like Turbo Tax for filing tax. If the income is straightforward like W2, easy-to-use tools like Turbo Tax can help file the taxes. If you have a home mortgage, capital gains, business, special needs, other 1099 income, etc., then, we recommend hiring a professional to help with tax filing. When talking to a professional, you may generate ideas on saving tax in the future.
NOTE: To learn more about the exact tax rates, visit this site
Filing Tax: Do It Yourself (DIY):
The biggest tangible benefit is to save money. You can likely save money if you do your taxes yourself. Anyone can file electronically for FREE at IRS.gov, or you can use online software (for a fee). Online tools create awareness in areas of pre-tax contributions like IRA or charitable contributions. This reduces taxable income and hence save taxes.
The biggest disadvantage we see: Time it takes to understand the verbiage and do the right things without any errors. The question I would encourage people to ask is- is it worth your time to learn when you can focus your time and energy on your business or family time. The errors like wrong deductions etc. may cause stress and unnecessary headaches with refiling etc.
Hiring a Tax professional:
Your tax professional should know the tax laws and stay updated on anything new – something you might not have time, or interest, to do. This gives peace of mind. Especially when the unlikely event that there is an audit from IRS on your taxes, your tax professional may work with you to prepare or work with the IRS directly on your behalf.
Typically the cost of hiring a tax professional is higher than the cost of using the software. But it will definitely help if you have a tax situation that is complicated.
These are the basic pros and cons of filing tax.