2020 is here and everyone is making plans and thinking how they’re going to spend that tax refund. The media has bombarded you with the ease of tax preparation and using tax preparation software to get you that refund quickly. Some tax software outfits are offering free on-line consultation to get your taxes filed.
For the typical W-2 filer with no deductions, tax prep software is a good way to get your taxes filed at a relatively inexpensive cost. If you have anything more than a W-2, you should seriously consider hiring a tax professional to assist you.
Tax Professionals are Expert in their Field
Tax professionals know the tax laws in and out, have studied at universities, have experience for many scenarios and are licensed professionals.
Tax software is… tax software…. It doesn’t interact with you, it can’t advise you on the law, it has a shelf life, but most importantly, it can’t represent you before the tax authorities in the event of an audit or inquiry.
Like the seasonal tax shops on the corner, they are there for the quick buck and have no skin in the game. Come April 16, the shops are closed, the hot-lines have been disconnected and there is no one there to help you. These so-called help hot-lines can’t offer adequate tax advice to you. They can tell you how to input information into their software but they generally do not have the experience or knowledge to give you tax advice. There are numerous disclaimers.
What the tax software companies don’t tell you is the quality of their hot-line staff. What’s their training? What’s their experience? Are they still a ”tax professional” come April 16? Or are they driving for a ride-share company.
A good tax professional stands by their client, strives to understand the client’s needs, works with the client to help them legally pay the lowest tax possible. They offer tax advice, have resources to answer specific questions; a tax professional will keep you out of hot water and guide you on the proper path of success.
Your Time is Valuable
From the commercials you see a bright, smiling, millennial-something talking about how fast and easy their software is and how you can get a quick refund. What they don’t tell you is the time it will take you to prepare your return on your own.
Preparing your taxes with on-line software will take you HOURS to prepare. Then the second guessing happens: Did I get it right? What have I missed? What did I do wrong? Why can’t I get the refund I expected? You pay about $150 to E-file your taxes (for a small business). To top it off if you add the hot-line, it’ll cost you an additional $200.
So it took you 8 hours to prepare, how much is your time worth? A hardworking plumber charges $125-$200 per hour for their work. Is it worth $1,000-$1,600 of your billable time to be uncertain about your taxes?
A tax professional will often save you money. Isn’t it worth hiring someone to be in your corner that will be for you, to save your time and money to prepare your tax returns properly; NO tax software can commit to that!
Foreseeing the Unseen
Tax software will not help you from a tax planning standpoint or has the ability to run multiple scenarios. Tax software not only can’t advise you on how to improve your tax outlook, it can’t evaluate what works best for you, the taxpayer.
Sure, tax software packages have a Q&A section, but they’re canned script. A seasoned tax professional works with you, asks you the important questions, and can help you by advising you the best course of action; from evaluating your current tax situation, and solving current tax problems when they exist to creating new tax planning solutions for the future.
Sharing Your Personal Information On-Line
Here’s the big question, do you really want to share your social security number, your bank account information, your income numbers and details on-line? How often do we hear about identity theft and scammers? The tax software firms tout how safe their websites are to input this sensitive information but….. can you be sure that your computer hasn’t been hacked or your internet connection?
Working directly with a tax professional you’ll have the assurance of confidentiality, and the security and safety of your personal information.
Call Anthony W. Imbimbo, CPA for a complimentary consultation. Anthony is a tax expert with over 35 years’ experience. Call him today at 619-497-1040