Accountants – Helpful or Harmful?
Accountants may keep you in the dark on some important tax issues.
We all believed in Santa Claus, the Tooth Fairy or monsters under the bed, but most of us stopped believing in fantasies a long time ago. So why do we do it when we are paying our taxes? Well, accountants want to make money too, so they spread certain myths that we as taxpayers seem to eat up like ice cream.
So beware of the tax myths and now your rights! Here are five things accountants will tell you to keep you in the dark.
My CPA Said I Can’t File My Own Taxes
Not true! Most people file their own taxes and they do just fine. Single people who rent, don’t make more than $100,000 and aren’t self-employed can file a 1040EZ and be done with it. For folks whose taxes are a little more complicated than that, there is tax software out there that will walk you through how to do your taxes accurately.
For simple federal income tax returns, you can take advantage of TaxAct’s free filing. If you own property or invest in stocks, you can sign up for a $30 package that will cover your filing needs. For business owners, TaxAct offers a comprehensive online tax package for only $75. Try finding a CPA who will do really complicated taxes for that price!
Accountants Know About Tax Breaks That You Could Never Find
Again, not true. Accountants will convince you that it’s worth it to pay them to find tax breaks for you. In reality, if your taxes aren’t all that complicated, there are no major tax breaks to lower your tax liability.
Most people qualify for the standard deductions and credits and you can find out all about those on the internet. For free. Tax software will show you what deductions and credits you may be able to get as you go through the filing process. If you think you might qualify for some of the more exotic credits and deductions, you still pay less with online tax software. Plus, they check your return, triple check the math and make sure you get everything you should.
It’s SO Easy to Make a Mistake
There is no denying that tax forms are hard to understand. So people are often intimidated, give up and pay an accountant. Well, here’s news… accountants make mistakes too. In a small-scale study of metropolitan tax preparation service chains, the Government Accountability Office discovered that every single return filed by those offices had errors. That’s right, every single one.
You could have made that mistake yourself and saved the money. Or used online tax software, like TaxAct to avoid it from the get-go. If you do make a mistake, which is really hard to do with online tax software, they guarantee that your return is correct and will cover you if the software messed up. Will your accountant step up like that if you get audited?
Speaking of Audits
Your accountant may tell you that having a pro do your taxes is the best way to avoid and audit. Just that word and the vision of a screaming red envelope can make even the most stoic person tremble. Accountants know that, so they bring out this little nugget to help you decide to stay with them. That having been said, among taxpayers who earned less than $100,000 in the last tax year, less than 1% actually got audited. If you fill out everything honestly, you don’t really have anything to worry about.
The Personal Touch Makes All the Difference
It’s nice to imagine your pal the accountant spending hours poring over your return, double and triple checking the math, scouring lists of deductions and credits to find every single one for you, so you don’t pay a cent in taxes more than you have to. Well, I say to you, “Tooth Fairy”. The more returns accountants can churn through, the more money they get paid. So they aren’t putting in the extra time.
Why not save the money and spend as much time as you think is necessary to do it right? You have until April 18 and most tax forms from banks, employers, investment companies, etc. arrive long before that, so you usually have a good month to prepare.
Once again, if you go with online tax software, you can even get the support you need to help get you through your first time filing without an accountant. TaxAct even offers you live customer service on the phone or you can get help from their vast online community. Most tax software communities are supported by tax professionals and are included in the price. Even if you’re paying for a package, it’s a really great deal. An honest accountant would say “yeah, why are you still paying me?”
The Bottom Line
The internet has made communication, purchasing anything we want and filing your taxes so much easier than they were just ten years ago. A lot of taxpayers have already switched to doing their taxes online and it isn’t breaking the bank. In fact, it’s saving them money. So check out your options for online tax software and save some money this year on taxes. You’ve got nothing to lose and everything to gain.