PREPARING YOUR OWN TAX RETURN? THAT MAY NOT BE A WISE DECISION.

Article Highlights:

• Tax Law Complexity
• Getting Back More Than You Are Entitled To
• When the IRS Wants Some of Your Refund Back
• Missing Out on Financial and Retirement Advice

We hear a lot about the complexity of the tax code these days and a lot of rhetoric from Washington about simplifying it. The tax code was originally written simply to bring in money (taxes) to pay for government costs. But over the years, Congress has used the tax code more and more as a tool to manage social reform, and as a result the code has gotten quite complex.

So with taxes becoming more complex with each passing year, why do people think they can prepare their own returns? Professional tax preparers use software-costing thousands of dollars, so why do individuals, not educated in tax law and using low-cost computer software, think they can get their tax result right? Well, they may not, and they may miss deductions, credits, income exclusions, retirement benefits, and even more beneficial filing options just to save a few bucks on tax preparation costs.

However, paying a little more in tax than they need to should not be their biggest concern. A more troublesome situation is getting more tax refund than they are entitled to, and then a year or two later getting a letter from the IRS wanting the excess back. This is especially devastating to lower-income individuals and families that spend what they bring in just making ends meet and have no savings to fall back on when the IRS comes calling, leaving them with even a bigger financial hole.

To make matters worse, they may not even understand the IRS letter or the issue it is dealing with, and since they did their own return, they have no one to call for help in getting the tax assessment reduced or knowing how to get penalties abated.

Professional tax preparation offers more than just entering numbers into a computer program. So, if you are a tax return do-it-yourselfer, perhaps you should consider a firm that can not only prepare your taxes properly, but also provide tax, financial, and retirement guidance along with planning for the future, helping you to avoid run-ins with Uncle Sam. Please give this office a call.