Guess what? The Federal government is gladly holding onto hundreds of millions of dollars of YOUR unclaimed refunds. As a tax pro it really hurts me. I know that a couple of thousand or even hundred dollars to “regular people” like you and me can be a big help. And yet because of fear so many tax payers procrastinate filing their tax returns, hundreds of millions of dollars remain unclaimed every year!
All the while our tax code gets more complicated and complex, the regular guys like you and me have more difficulty getting more refunds back. So, I am going to share with you six mistakes that tax payers make. This blog entry is the first of a series that will expose these very important reasons that you may not be getting the refunds you are due.
MISTAKE 1 “Doing it Yourself” using “Free” Tax Preparation Software
Tax Professionals like to joke about how great these free or low cost tax preparation software programs are such as TurboTax,® TaxAct,® etc. are for our business. First the programs are not as “easy” to use as they purport, rather these programs can cost you far more than the preparation costs they save. You might be thinking, I’ve checked these out and they are very cheap. And at first glance, it might appear that you are right. (Although there was a one billion dollar class action lawsuit filed in federal court alleging misstatement of fees and deceptive standards of the federal Freefile program, so it was never as cheap as it appeared) But personally, I’ve seen it time and again where people come to me after using these programs and have made mistakes costing them thousands.
You can end up leaving hundreds, or even thousands of YOUR dollars in the hands of the IRS. I see it all the time. New clients show up and are surprised and amazed at all the money that my team and I can find for them that they have left on the table.
Worse yet… Choosing the WRONG options in filing your taxes could put you in a tight spot with the IRS! Even if you don’t owe a ton of back taxes, you still don’t want your RECORD to come up in front of an IRS agent if there are some discrepancies in your tax returns. The last thing you want is for RED FLAGS to fly around opening your past tax returns and social security up to further scrutiny. (Don’t think this doesn’t happen)
The IRS can make a lot of things happen that you won’t want to happen. But the good news is that if you keep your records straight you can minimize what they will look into you and what they can do.
Why it is even more important than ever: New regulations including the Affordable Care Act (ACA) otherwise known as Obamacare are making extreme messes in the tax industry. It will be very important to know how to fill out the new forms and reconcile the credits received with the estimates and actual income…Or the new exemptions which can be approved through several different avenues. Experts agree that there will be lots of delays in refunds and that many more tax returns will be closely examined starting this coming tax season.
So, I think you will likely agree that it is important to make sure to choose a competent tax professional and not risk your tax situation to a cheap online program. Reach out to me me with any tax and finance questions
Next I will share MISTAKE #2 with youP.S. If you enjoy this post, please do me a favor and share with others, retweet and comment.