Now is around the time when things begin to really crank for us around here. It’s the week which the IRS is opening up actual e-filing (as of the 20th), and many people have received all of their paperwork necessary for completing their returns.
There is, however, a temptation that I hope you’ll resist. Sadly, my writing this could easily be seen as self-serving, but that doesn’t keep it from being true. Here’s what I’m referring to:
Trying to prepare your taxes correctly on your own.
You see, I don’t like to crow about other people’s mistakes.
In fact, in our line of work, much of what we get to do is to fix or alleviate those mistakes, at least when it comes to their tax implications. This year (with the implementation of the ACA wreaking big havoc in the preparation process) carries so many changes that users who fall prey to screaming offers from the “cheap” options are more exposed to wallet-sucking mistakes or even audits.
Plus, when you see stories like this one: http://pittsburgh.cbslocal.com/2015/01/13/turbotax-customers-angry-over-change-in-tax-return-software/ well, you can be grateful that you trusted a real person- not a blind corporate monolith.
Further, do you remember when the Treasury Secretary (at the time), Tim Geithner, testified about tax irregularities in his own personal returns? Do you remember where he placed the blame?
He’s not alone, but there’s a good way to fix that problem.
Aurelia E Weems, CPA Uncovers A Case of Misplaced Trust
“Things can fall apart, or threaten to, for many reasons, and then there’s got to be a leap of faith. Ultimately, when you’re at the edge, you have to go forward or backward; if you go forward, you have to jump together.”
– Yo-Yo Ma
You may have heard me say it before and it’s true: we accountants like to joke to one another about how good these online software programs (TaxSlayer, TurboTax, etc.) are for our business. Firstly, they are not as “easy to use” as claimed, and secondly, they cost you an arm and a leg.
You might think they’re cheap. And on the surface, you might be right. However in the last few years, a $1 Billion class action lawsuit was filed in the federal court in Philadelphia alleging gross misstatement of fees and deceptive standards of the federal “FreeFile” program. So even on the surface, they aren’t always cheap.
But I’m not even talking about the money for the service itself.
Using those programs can end up leaving hundreds or even thousands of your dollars in the coffers of Uncle Sam even if you follow all of their instructions to a tee. I see it all the time–frustrated clients bringing in their prior year’s tax return, astonished at all the “hidden money” my staff and I are able to find for them!
Choosing the wrong method or forms in filing your taxes can place you directly in the crosshairs for an audit.
Even if you don’t owe a ton of back taxes, you still don’t want your record to show some IRS agent that there has been a discrepancy of some kind in the past so that red flags begin to fly; and then more bureaucratic people start looking through all of your past tax filings and current income holdings. Basically, they take your social security number and poke around in your private life.
(If you think they won’t do this, read a little online about the increased “enforcement” measures the IRS has been taking year after year.)
They can do a lot of things you don’t want them to do. However, if you keep a clean slate (no IRS correspondence with you related to filing your taxes incorrectly), the opportunities for them to mess with your personal stuff will be limited.
Here’s another reason why this is so important now more than ever: New government regulations in 2014, delays in Congressional action, and issues with refund “loans” from the big chains are creating a mess in the tax industry; and with this year’s implementation of the health insurance requirement on tax returns, you don’t want to be left at the mercy of a piece of software or a poorly-trained temp in a corporate tax prep “store”.
Yes, it can be seductive to “go it alone”– to trust a piece of software or poorly trained preparer to point out possible deductions; to protect against your chances of audits through online chat room support or hourly employees.
But it can be a big trap.
Just ask Tim Geithner.
So, let’s get your financial paperwork in the hands of someone who cares.
To your family’s financial and emotional peace!
Aurelia E Weems
Aurelia E Weems, CPA