Tax Reducers - 10 Questions to Ask Yourself

Before You Prepare Your Own Taxes

1. How can I understand all the tax law changes?

Good question. Our preparers spend more than 60 hours each year learning the new tax laws and software. How much time can you afford to spend? And will you understand what the legal language really means? When you do your own return, you're on your own.

2. If I get audited, who will help me?

Even if you use tax preparation software on your PC or via the Web, the software providers only guarantee the accuracy of the calculations. Since we take the time to learn your particular tax situation, we can give you specifc advice about any inquiries from the IRS (or your state taxing authority). And it's not just audit situations that can be a problem. Suppose you receive a notice changing the refund on your return to a balance due? How will you know whether the change is correct or not (they aren't always)? We are available all year long to counsel you and to respond to IRS letters. When you do your own return, you're on your own.

3. How can I be sure I entered the income in the right places?

That's really the trick, isn't it? A computer program can't look at your W-2 or 1099 form and know where it belongs on your tax return. We've had an average of 15 years of experience looking at and interpreting these forms. We know which line of the more than 300 federal forms your income belongs on. When you do your own return, you're on your own.

4. How can I be sure I took all the deductions I was entitled to?

Although the software programs try to lead you through an interview process, they can't answer your questions like a real live person. A misunderstanding can mean that you miss out on a deduction and end up paying too much tax; or worse yet, you take a deduction to which you are not entitled, setting yourself up to be questioned by the IRS. When you do your own return, you're on your own.

5. Which forms need to go with the return?

Do you know which forms always need to go with your tax return? Do you know which ones sometimes need to go? Do you know what order the tax form pages need to be in? Do you know which attachments can save you from getting an IRS inquiry letter? When you do your own return, you're on your own.

6. How is my state return different from my Federal?

Some states conform exactly to the Federal. Others have subtle differences in what is taxable and deductible. Do you know which is which? How much time are willing to invest in finding out? When you do your own return, you're on your own.

7. How can I be sure I included all my taxable income?

The tax laws are getting more complicated each year. Just because you think it SHOULD not be taxable does not mean that it IS not taxable. Do you know the difference between an insurance company dividend and a stock dividend? Do you want to know? When you do your own return, you're on your own.

8. How can I be sure I excluded non-taxable income?

If you don't mind paying more tax than you actually owe, then you shouldn't worry about this. The IRS will be happy to take your money. If you don't report it properly, they won't even know it should not be taxable. When you do your own return, you're on your own.

9. Can I rely on advice I got on the phone from IRS?

Many people think that if they call the IRS help line and get an answer, then they can rely on that information for their tax return. Sorry, Charlie! Since the answer is dependent on how you asked the question and since you did not receive it in writing, it is not binding on the IRS. They can audit you and disallow the deduction or add in the income. If we make a mistake on your tax return, we stand behind our work - we'll pay any penalty that results from our bad advice. When you do your own return, you're on your own.

10. How much is my time worth to me?

You should think about this. How much money are you really saving by preparing your own return when you consider how much of your time you are investing in learning the tax law, learning the tax software and putting the forms together to file? Then add in the potential lost money from failing to properly report your income or deductions; and you can see why so many people prefer to put their taxes in the hands of a professional, because
WHEN YOU DO YOUR OWN RETURN, YOU'RE ON YOUR OWN!