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A Tax Program or a Tax Professional?

By: Arleen Mundy, EA

Many people today struggle with the question of whether or not to use home tax preparation software readily available from most any retail outlet or to bite the bullet and hire a tax preparer. Arleen Mundy provides some pretty good arguments that just might help make the decision a little easier to make.

The IRS used to be concerned about accurately prepared tax returns. Now their attitude is if it's reasonably close, it's good enough.

Should you use a tax preparation software package? All it guarantees you is a pretty return. This means the arithmetic is correct. It does not guarantee the accuracy of the return.

It does not explain any new tax law that will affect the correctness of your current tax return or assist you in your 2011 tax planning strategy.

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The program will not make suggestions as to what may be the best for you on your current or prior year's tax return.

It cannot read the expression on your face and know when you don't understand something.

It cannot discuss or remind you that your refund, if it's anticipated before the due date of your taxes, could be used for an IRA.

It can't advise you what would be the most tax advantageous way to finance a future purchase you are considering.

In other words, the computer in front of you doesn't have a brain. It deals with just the facts presented to it. It can't point out a deduction you overlooked.

It's not a 100% replacement for a human being. And your tax return will only be prepared as fast as you can figure it out.

This implies the IRS is saying that any individual can file a tax return without knowing the tax law and that professional help is no longer needed. Will the IRS add "Self-prepared Return" to the list of abatement of penalty excuses for erroneously prepared tax returns?

A professional can usually zip through a return. You may spend a long time struggling though all the forms - and then end up overlooking a few deductions or credits.

It's your choice - a cheap program or a tax preparer who'll give you a little more than you expected.

Submitted by Arleen Mundy, EA,
Accredited Accountant and Tax Preparer
Licensed to practice before the Internal Revenue Service

Posted April 1, 2011

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