Check out these four tricks used to get you to spend more (without you knowing it).
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Of the 150 million individual federal tax returns filed last year, more than one-third of them were self-prepared by folks using online tax software. As the practice grows in popularity, we wondered if anyone had ever regretted their decision to use tax software to file their taxes.
We asked Dave’s Facebook followers and found that for most folks, you either love your tax software, or you hate it!
It Worked Great Until…
“Used [tax software] three years ago and thought it was a good decision until I had $2,000 withheld from my federal [refund] last year and $500 this year,” Brian P. told us. “I’m not a fan!”
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A letter from the IRS isn’t the only indication that something went wrong.
“[I] could have received a higher [refund] last year had I spent a few dollars more using a tax expert rather than software,” Monica T. posted. “Never again!”
Monica can still go back and file an amended return to get her money back. That’s what Janet S. did after uncovering mistakes made when she filed her taxes with tax software for several years.
“One year, [I] went to a tax preparer because [my taxes] were too complicated,” she explained. “At no charge he went back and reviewed our past three [returns] and found mistakes I made every year. Convinced me not to take a chance and let the professionals do it.”
Software vs. Pro Tax Filing Game
Kelly K. said she and her husband had a bad experience with tax software, but that hasn’t stopped her husband from trying. “Hubby continues to run the software, and we compare [the results] to the CPA,” she told us. “Until his numbers are closer to the CPA we will not lean on the software.”
Kym D. admits she does the same thing. “As the nerd, I pre-do our taxes before we go [to our tax professional],” she said. “It’s a little game I play to see if I get them right, but [our tax pro] always finds money I missed.”
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Tax Pros Weigh In
Evie A. said she is an enrolled agent, which means she is a federally licensed tax professional authorized to represent taxpayers before the IRS. “There are items where judgment is needed which isn’t present with software,” she said. “Also, you want to make sure that whomever you consult with is able to help you save taxes.”
Cynthia L., who said she’s worked as a tax professional for 40 years, agreed. “[I’ve] corrected many returns that people did themselves online,” she said. “They weren’t necessarily wrong but there were other choices that were better.”
“My accountant doesn’t earn my business for what he does,” Beau Meyer pointed out. “He earns my business because of what he knows. Tax prep is easy. Good tax planning is what you don’t get from software.”
What Will You Do This Year?
Have you filed with tax software in the past? Are you wondering if you left some money on the table? Want to make sure you get all the deductions you deserve this year? Consult a tax professional who can review your returns for the last three years and help you file amended returns if necessary. You can also make sure this year’s taxes are done right—the first time.