Tax preparation is always a dread for most individuals. This is mainly because it demands the tax payer’s attention in all financial transactions that have been conducted in the last financial year. It also requires efficient planning as there are certain regulations that need to be followed and in some cases, you need to be aware of the little changes they make to the tax laws each year.
Debunking the myths of online tax preparation
Online tax preparation has become widely popular. There are websites that are linked to software that will facilitate your tax preparation for you. They do it via questionnaire that is designed to analyze the state of your finances. There are a number of myths surrounding this method –
- Software does everything – Most people harbor this misconception that the software is the key to the secret treasures of tax preparation just because professional tax preparers use them too. The truth is that the software is just a crutch to help crunch numbers. Tax preparation requires a thorough knowledge of finances as well as the rules set by the IRS.
- E-filing is simpler – Preparing and filing your taxes online can seem simple but it generalizes a lot of details. And it is in the details that you get your benefits. There are several assets that are not considered when going through software and you end up paying more on your taxes than you actually need. Tax preparers consider details and work on the software accordingly which makes it easier to file your taxes accurately. Trying to e-file yourself invites too many problems and makes the process more complex.
- Irrelevant questionnaire – The online tax preparation software asks you questions about your finances based on your previous responses. This is not viable as not all circumstances are the same. Small errors can lead to large problems that you did not expect.
- The fear of audits – This is a myth that actually holds true for do-it-yourself tax preparers. There are several conditions that can get you audited by the IRS that depend on how you have prepared for your taxes. A professional assessor will be alert to the little situations that can trigger an audit and prepare your taxes accordingly so you don’t have to pile on unnecessary worries.
Finding the right CPA
Some people like to bypass their efforts and go through an online portal to file their taxes. You can also prefer a do-it-yourself kind of deal and run the risk of landing in more trouble than what you signed up for. The other way is to have a professional assessor prepare your taxes for you. They are always in touch with the latest updates from the IRS and therefore, will do a thorough job of reviewing your finances and preparing your taxes. The laws can vary from state to state and it is best to have a local CPA prepare your taxes for you.