| Tax preparation software has become increasingly | | | | through one of the online tax prep services that |
| popular over the past few years. As a result paid | | | | require payment only when filing. |
| preparers are becoming more expensive which in turn | | | | Often you can print these forms without paying or |
| increases the number of people in search of tax | | | | filing they are just marked with a DO NOT FILE to |
| preparation software! Anyone in need of a perfect | | | | prevent you from simply mailing them in. This "second |
| Catch 22 scenario can feel free to quote my last | | | | opinion" will give you peace of mind that your return |
| sentence! Those hesitant to use the software often | | | | has been prepared correctly. The following website |
| fear making mistakes. A mistake in either direction | | | | compares multiple features and prices of 10 different |
| can be costly. A mistake in the governments favor | | | | tax software products: |
| can cost you monetarily. A mistake in your own | | | | If you find that you have been using tax preparation |
| favor can cause an audit and in turn cost you | | | | software [ for a number of years, you might want |
| monetarily. I offer the following guidelines as a safe | | | | to visit a paid preparer and ask them to take a quick |
| approach to your tax management. | | | | look at a couple of previous year filings as well as |
| Tax professionals are in the zone. They think, eat | | | | prepare the current year's filing. The preparation of |
| and breathe taxes for at least a few months a year | | | | the current year's filing will get you in the door. Tax |
| and see a variety of scenarios. Therefore, it stands | | | | preparers tend to be anxious to find others mistakes, |
| to reason that they may be more sensitive to | | | | even if that "other" is an automated software |
| economic and situational indicators that have an | | | | company! If a mistake is found you can choose to |
| effect on your tax return preparation. Asking the | | | | have the preparer amend prior year returns or do so |
| right questions is key. As a general rule I would (and | | | | yourself as most software products have this option. |
| do) sit with a tax professional in any year that there | | | | Even in the years that I have chosen to use a paid |
| is a significant change. These changes include a | | | | tax preparer, I run my simple numbers through an |
| dramatic increase or decrease in income, a marriage, | | | | online software program just to get a ballpark figure. |
| a birth or an adoption of a child (especially adoption, | | | | (By simple numbers I am referring to the info on any |
| due to associated costs being deductible), a change in | | | | W2's) This is helpful for planning and prepares me to |
| a business loss or gain status, the selling or buying of | | | | have an intelligent conversation with the preparer if I |
| a home, etc. | | | | have any concerns. |
| Once your situation plateaus tax preparation | | | | Tax preparation software is a less expensive |
| software is a less expensive alternative. This method | | | | alternative that I suggest using in combination with |
| requires a little more work on your part, however. | | | | the professional services of a paid tax preparer. The |
| Rather than having your preparer ask you the | | | | guidelines above will help you reduce error and give |
| questions, you will have to read the questions (not | | | | you peace of mind while greatly reducing your |
| so difficult). I strongly suggest getting a second | | | | cumulative tax preparation costs. |
| opinion (a little more work). Run your numbers | | | | |