Between T.V. commercials and internet ads, there’s a rumor spreading that you should not be afraid to prepare your own taxes. Despite the changes to the tax law, tax software companies have been insisting that preparing your taxes is not scary – that it can be done – by anyone. We’re here to tell you that is not the case.
Tax Law is Very Complex
Taxes are not simple, they are very complex. This stack of books? These are principles that have to be learned just to be able to prepare the most basic tax returns. And the new tax bill? It’s 500 pages of changes to the already complex tax law!
While most of the new tax laws don’t go into effect until next year, we assure you, new or old, the tax law is complicated.
The Truth About Tax Software
Trusting that tax software will lead you down the right path is not a safe bet. Yes, there is tax knowledge programmed into these software services, but that doesn’t guarantee your tax return will be correct. Tax software is never a substitute for tax knowledge.
Tax software is designed to lead the taxpayer thru a series of questions that will enable the user to prepare a correct tax return. The taxpayer’s answer to one question will direct them to another. Knowing how to answer these questions correctly is a necessity to preparing a correct tax return. It is equally important to know when you should or should not skip a question.
Exceptions to the tax law are not always clearly defined in tax software, thus allowing a huge margin for error in certain situations. An uneducated taxpayer will most likely miss those exceptions, causing them to either overpay or underpay their tax liability.
There are also new laws that apply to this year’s return. If you’re not aware of these changes you could possibly miss one that affects your tax return and either under or overpay your tax liability. Many state tax laws change each year as well and you need to be aware of how those changes will or will not impact your tax return.
Tax software isn’t programmed to ask about ALL deductions an individual may be able to deduct, such as employee business expenses. For example, tax software won’t know to ask a police officer or tow truck driver about batteries purchased for a flashlight used for their job.
Tax software wouldn’t know if you’ve transposed a number on your return. A transposition such as $19,300 versus $13,900 is significant. It could mean you pay more in taxes or didn’t pay enough. We double check client returns; therefore, errors such as transpositions are found.
Education expenses often confuse taxpayers using tax software. Items such as scholarships may not be calculated correctly due to the guidance of the software of the taxpayer’s interpretation of the questions asked. Education credits may also be miscalculated for the same reasons.
This just a partial list of ways that tax software can mess up. For more examples, check out our blog post: 5 Ways Tax Software Can Mess Up.
As you can see, having your taxes prepared by a professional is the best way to guarantee that your tax return will be accurate.
Make your appointment today
Even though most of the new tax laws don’t apply until 2018, it’s crucial that you see a tax preparer this year to plan for next year. We’ve been studying the laws and understand how the changes will affect you next year. By next year, it will be too late. Ready to come see us? Make an appointment here.