With the advent of web returns and software packages literally as low as a buck, that means one US dollar, I thought I would answer some questions for people who are having a hard time with simple online/software package tax returns.
0. Start by planning that you will do the return. How do you do it? You get all your important papers together before getting started. That way you can determine if you really want to do it yourself or pay some tax professional to do it. Gather your W-2s, 1099s, 1099-R statements, interest statements, mortgage interest statements, etc and start going through them. Don’t forget any stock transaction statements that are finally starting to come out now.
1. The do-it-yourself software package, despite the conversational tone and friendly mannerisms that it guides you through in processing still requires you to understand what you are doing. For very simple tax returns, I fully stand behind software packages or going to the IRS website and filing directly there. Nothing beats that for a simple return with one or two W-2s. If you are more complex than that and like to do research, then if you have things like mortgage interest, property tax, investment income from stocks, etc, you can save money from paying a tax professional.
2. If you hate being a do-it-yourselfer when it comes to tax returns, just pay somebody to do it for you and don’t balk too much at the price. There are some complex returns, such as trusts and estates and for some it may be something as simple as understanding how to calculate the appropriate medical deductions, that require some expertise. When you need your car transmission changed, you generally go to a mechanic unless you really like working on cars, right? So if you really like working on tax issues, go for it. Otherwise, have a professional do it.
3. Most people need to remember to update the software. A lot of people download software packages and even when prompted for updates, they don’t and they wonder why they have problems with their returns. The tax updates are corrections or changes to forms, etc that sometimes just aren’t ready when the software ships. It is not uncommon, like this year, for the state legislatures to dog it and take things slowly in getting things approved. A lot of tax sofware users fail to upgrade the software.
4. Take your time and go over the questions you are asked in the software slowly. If you are asking for specific help questions through the software don’t ask for your return to be completed for the $29.99 you are spending. It is called Do It Yourself for a reason and the help desk tax professionals can help you but they aren’t there to work for free for you.
5. Lastly, if all else fails, drop me a line or post it as a comment and we will see if we can the community to help out. Just keep the questions simple, please. I am not getting paid to answer them on this site either.
Hope you are enjoying the weekend and keep your questions coming!
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Kim Isaac Greenblatt
How To Do Online Tax Return Preparation and Planning