But Ive got an accountant, you say, and I cant handle the complexities of preparing my own return. Bunk! The tax software now available for doing your own taxes is superbpowerful, easy to use, and has lots of built-in expert help and reference material. All you need to do is get your data (even if its in shoebox format), sit down, rev up the computer, and youre off. The program will take you, step by step, through everything you need to prepare the return, including such exotic areas as depreciation and the alternative minimum tax.
Have any tax-related, IRS-oriented
questions? Think you need a tax professional for the answers?
Maybe not. The programs offer lots of online help, including
complete instructions for all the forms,
Here are two more reasons to go it yourself: the time constraints accountants face and electronic filing , both explained below.
Lets face it. The tax laws are complex in spite of Congress simplification pitch. And each situation (yours in this case) is unique. Every taxpayers situation has its own little subtleties and intricate questions to resolve. How can any accountant know all that has to be known about your situation and spend the necessary time on your account analyzing the various methodologies to minimize your taxes, (especially when most of the data for tax returns comes into an accountants office during the same six-week period every yearlate February through early April), and make a decent living? Its difficult. Take it from a CPA.
So, what happens. The accountant
gets your data, puts it in a computer program, and does the best
possible job given the restricted amount of time that can be
allocated to each return. That amount of
Most accountants know any return will justify only so much in fees and know they must be careful not to run up too much time that cant be billed. Otherwise, the income from the practice will not justify the work performed, and the accountant might as well pump gas or flip hamburgers for a living. (This is why most attorneys dont do tax returnsnot enough money in them.)
So how do you get around this problem?
Do the tax return yourself (at least the initial draft), and
spend enough time in its preparation to cover most of the angles
and possible combinations of laws
Why electronically? First, youll get an e-mail acknowledgment from the IRS it was received; second, youll eliminate one of the primary factors that triggers a preliminary audit, i.e., data errors, and third, youll get your refund in two to three weeks, directly deposited into your account. Electronically filed returns cant have data errors, as they are proofed several ways before the IRS accepts them.
While some CPAs will accommodate
this approach, others may not want to review your draft return,
maybe saying its too much trouble, or theres not
enough money in it. What to do? Simple. Get a
If you want to get a firsthand feel of how to do your own tax return before the current years programs are released, most of the major vendors have specials on the prior years software for minimal rates. The 97 releases should have excellent recaps of the recent tax law changes, in particular the ramifications involving IRAs and planning for educational expenses. Two leading programs to consider are TurboTax (Intuit) and TaxCut (Kiplinger). Both should have 97 releases arriving around the end of December or early January. Consider the CD-ROM versions to obtain the maximum online help and research capabilities.
Happy tax prepping!
ROBERT PRESTON is a regular contributor
|ROBERT PRESTON is a regular contributor to dacs.doc on financial issues and software. Contact him at firstname.lastname@example.org.|