Let’s dial in right away to an important question: Are you ready to knock out your 2022 tax filing?
There are now less than 2 months left to do it. And while that seems like a lot of time, you and I both know, it’s really not. Here’s why: My calendar is chock full of appointments between now and April 18 with only a few open spaces left.
If you want to get in a tax filing appointment, well, what are you waiting for?
calendly.com/davidforney
Also, did you catch this? Facebook … excuse me… META is moving to a pay-for-verification subscription? For a small fee, you too can get the blue checkmark on your social media account.
So, why does that matter, you might ask? Well, typically that little blue badge is given to celebs and political figures to prove to everyone else that this is authentically their account (rather than some spammer fakey-fake). Authenticity also matters for real reach, and thus, real impact.
Which brings me to why you should get an appointment with us rather than those DIY tax services: We’re verified Castle Rock tax professionals, and we have actual experience in the trenches with our clients. We’re not doing this to serve a big corporation’s interests. We’re not faking it. We’re the real deal.
And no matter how much those nameless, faceless entities claim to offer “personalized service,” we actually do things totally focused on your personal situation. And that’s a big bonus when you’re dealing with the government’s heavy-hitting tax arm.
But, your taxes might be simple and the allure of saving a few bucks is strong when every buck counts. So, would a big tax filing software service be the right fit for you? Let’s talk about that…
Should Castle Rock Filers Use DIY Tax Filing Software?
“A single leaf working alone provides no shade.” – Chuck Page
You see them in neat rows in stores and catchy ads online: do-it-yourself tax-preparation programs that promise everybody can do their state and federal taxes absolutely correctly without (or at least with little involvement from) a tax professional.
“We make filing your own taxes simple,” says Turbotax (to name one vendor) in its latest DIY campaign. “File your own taxes with confidence. We’ll guide you step-by-step and guarantee our calculations will be 100% accurate.” Prices range from free to the high two figures, depending on your return.
“Every deduction found,” they say. “Every dollar you deserve.”
DIY tax filing software services don’t slam tax preparers — in fact, Turbotax is one of the many offering a slightly more expensive package that comes with the service of a tax expert. As tax pros, we value being honest, so, we have to admit: Who wouldn’t want to save a few bucks? And sometimes, these DIY tax filing software services actually can get the job done for you…
But sometimes they can’t.
When you go it alone
Simplicity is your watchword here. Is all your income reported on standard forms like the W-2 or a 1099? Do you have no deductions beyond the standard one and no side business?
Most tax filing software uses interview-style questioning to find out about your legit deductions and credits, such as those for saving for retirement or giving to charity. If you’ve kept up with the frequent changes in tax and you’ve kept excellent records — and your return is basic — you stand a chance of getting every dollar you deserve.
But if your return is at all complex and you haven’t stayed up to date on your own accounting and on the nuances of tax law… you’re probably rolling the dice.
A lot to keep track of
C’mon, how hard could it be? I change my own oil in my car …
Good on you; you probably save a bundle. Except that the steps in changing a car’s oil are pretty much the same as they’ve been for years.
Tax law is different EVERY year, sometimes in big ways and sometimes in small ones — like leaner credits for having kids, higher limits on retirement savings, and tougher deductions for giving to charity, to name just three — and can be riddled with nuances that cookie-cutter DIY tax filing software might not necessarily know to apply to you.
Take two still-simmering examples from the IRS.
First, Uncle Sam said all third-party payment platforms like Venmo or PayPal had to report official payments and mail IRS Forms 1099-K if you did just 600 bucks worth of business. But then no, around last Christmas the IRS put that whole notion off for a year. But is still being slammed for the confusion.
Next, there are special state refunds related to the pandemic. Are they taxable now or not? Well, maybe in some states, maybe not in others. Tax authorities seem like they’re still trying to decide …
How much can I trust it?
Even if your tax filing software is right up to speed on such events, maybe you aren’t — and financial lives can get complicated quickly these days. DIY software is only as good as the numbers you enter. If you don’t understand every word of an interview question, how do you expect to answer completely and correctly? (This is how vet bills have wound up under “medical deductions” on tax returns.)
Have you sold stock? Bought or sold cryptocurrency (a big IRS focus at the moment) or a business? Do you have multiple sources of income or high medical bills? What kind of retirement accounts do you have, and are they the best ones for you? Do you know how to calculate an asset’s basis? What about using tax-loss harvesting without getting into trouble?
A lack of tax experience can cost you if you try to do prep from the hip — and, though it won’t be the software’s fault, some calculations will be a long way from 100% accurate. And that’s when tax authorities start asking other kinds of questions …
Consider a recent survey that found taxpayers are more than twice as likely to use DIY tax software as an accountant to do their taxes. More than one in three said they’re less satisfied with the results than if they’d gone to an actual accountant.
So, you could go the DIY tax filing software route… but you may wind up working with a professional anyway. To bail you out.
Our desire is to always do what’s best for our Castle Rock contacts — which includes helping you through all tax situations.
Reach out to us any time if you have questions.
Looking out for you,
David Forney