Did you think TikTok was gone for good? The new president and Congress will soon decide how cooking videos, cringey dances, and comedy skits measure up against national security concerns.
With the TikTok drama and the inauguration of a new president (and todayâs writing falling on Martin Luther King, Jr. Day as well), thereâs a lot happening right now. Which is why Iâm giving you a reminder that tax season opens January 27th.
Letâs check in: How are your documents looking? And how are you doing on getting that appointment set up?
Iâm hoping your answers to those questions are âgatheredâ and âscheduled.â If not, time to change that. Do yourself a favor and knock out these tax to-dos EARLY â so you donât doom yourself to scrambling later on: 719-260-0320
Now, you might be thinking, âBut I could just save myself the hassle and file with (insert tax software of choice here). Easy.â Yes, easy they may be. But entirely safe and able to serve you best? Not guaranteed.
As a relevant example, the Federal Trade Commission recently fined H&R Block 7 million dollars for taking advantage of tax filers, specifically for its deceptive claims about âfreeâ filing â a claim a lot of tax software programs love to tout.
Ever been told, âIf itâs too good to be true, it probably is?â Yep. Definitely applies here.
Because the reality is, these âfreeâ software programs leave a lot wanting. You have to pay to file state returns, as an example. And even if they âoffer protectionâ from penalties and interest accrued because of mistakes, itâs only applicable in limited cases. Not to mention, youâre on your own if you have to navigate the mistake clean-up.
Now, this isnât to paint tax software in an entirely bad light. I certainly wouldnât go so far as to claim that tax software can never be helpful. I just want you to be aware of the risks as youâre making decisions about your finances that can really impact your life.
Tax Season Software or a Colorado Springs Tax Pro? Making the Right Call
“Nothing is more difficult, and therefore more precious, than to be able to decide.â â Napoleon Bonaparte
Weâre right on the cusp of tax season, which means youâve got a choice to make: Will you file with a tax season software program, or call on a tax professional?
I know I may seem biased on this topic. But as the certified North Colorado Springs tax pro in your corner, I want you to go the route that makes the most sense for YOU. My goals for you are big-picture: A peaceful tax season and sustainable financial health.
And because your tax situation is unique, I canât prescribe a black-and-white solution here. But I will do the heavy lifting of supplying the facts for you â and Iâll let you make an informed decision from there.
Tax Season Software
You know about TurboTax (thanks Super Bowl commercials). You know about H&R Block (thereâs one on many-a-block). You may even know about the IRSâs Free File program. Many of these software programs are appealing because theyâre âfreeâ â or close to it. In a tough economy where taxes are burdensome, that can be appealing.
Using software for tax season can be appealing if youâŠ
âŠare on a tight budget. Many âfreeâ programs exist and if you do have to pay, it can be âcheaperâ than paying a professional tax practitioner. Simple return filers will especially find this appealing.
âŠwant to DIY. Youâre able to personally enter your income, deductions, and credits.
âŠwant schedule flexibility. You can work on your return whenever itâs convenient for you. And some programs include on-demand support for when you hit tax-jargon overload.
The caveats
But of course, software has its shortcomings â thatâs one of the reasons people get on my calendar. If youâve got any complications to your tax situation (like multiple income streams, less conventional deductions, or estate, trust, or gift taxes, for example), software costs increase and can miss things.
If youâre trying to strategize how to pay less on taxes or just make smart tax moves, youâre on your own. These programs donât get well enough acquainted with you to find lesser-known credits you could claim, find income sources you need to report, and they donât advise you on the long-term impact of your decisions. Theyâre strictly concerned with compliance.
And maybe the biggest red flag: Software is only as good as the information you give it. Because youâre human, you might make simple (but costly) mistakes, and your tax software wonât stop you because it doesnât know to look out for those.
Tax Professionals
Getting help from a professional preparer (like my Wilklow & Associates, CPA PC team and me) can improve your tax season experience in a lot of ways. You will benefit from certified tax help if youâŠ
âŠhave a complicated tax situation. Tax preparers stay current on the ever-changing tax regulations that can turn your tax situation upside down, and your complicated return isnât a problem for us. From family tax dynamics to unexpected life changes, we can show you the most tax-savvy course of action (with all the possible credits and deductions). Thatâs what a good tax pro lives for.
âŠget stressed by taxes. By working with an expert, you get the confidence that your return will be accurate and compliant. As qualified tax preparers, we can save you hours of mental (and emotional) energy spent inputting documents and deciphering forms. Youâve got life demands to take care of. Let us do what we do best.
âŠwant guaranteed protection. Should you get audited, a tax expert can defend you before the IRS. As licensed preparers, we have a special tax pro direct line with the IRS and know IRS-speak. We can help you mitigate penalties and determine the best course of action.
The âdrawbacksâ
Will you have to pay for our services? Yes. And that amount fluctuates depending on the complexity of your return. But while you may âsaveâ with free software on the front end, you may not actually save in the end-end. Iâve seen plenty of Colorado Springs people walk through the door time after time who trusted the DIY method and ended up floundering and missing opportunities to save on taxes.
Is there the real possibility that the tax professional you choose can make errors? Of course. Errors are possible. But those errors are mitigated by doing a review of the tax return â like Santa Claus, weâre checking yours twice.
And of course, there are bad apples to watch out for. But this isnât cause to ditch tax preparers entirely â itâs just a call for exercising caution. Look for a tax preparer who, at the very least, is available year-round, has a credible history, and has a valid Preparer Tax Identification Number. (For the full safety checklist, check out the IRSâs tips for choosing a tax professional.)
So⊠how do you choose?
Ultimately, it comes down to your circumstances and preferences. Before you decide, think aboutâŠ
1. How complex your tax situation is. Just working with a single W-2 and no deductions? You might benefit from going the tax season software route. But even then, you wonât get the personalized advice you need for maximizing credits and deductions, or for making smart tax moves for the long run.
2. How much time youâre willing to give. The IRS estimates it will take you about 13 hours to file Form 1040.
3. How much expertise you have. Maybe youâve filed your own return in the past and your tax situation hasnât changed much in the past year, so you feel comfortable going the DIY route. Itâs still wise to put your financials into expert hands â tax regulation can change at the drop of a hat, and you can easily miss out on big tax savings opportunities that a reliable Colorado Springs pro would be able to help you with.
This isnât about figuring out which way is better â itâs about figuring out which way is best for YOU. Thatâs something only you can decide. My honest advice is to really consider all the factors involved here. This is your financial well-being youâre dealing with â it shouldnât be handled lightly.
And if professional help is the right move for your financial well-being this tax season, then letâs chat:
To your financial wellness,
Susan Wilklow