Beware of the little boxed tax software you buy at the store. It’s not always what you need.”Connie Phillips, local CPA
CULLMAN – Now that a new year has begun, it is time to start thinking about filing 2015 tax returns. From now until the end of January, people everywhere are anxiously awaiting their W-2s, as well as all the other tax forms needed to get the filing process started.
Important to note is that this year’s tax deadline is Monday, April 18. That’s right, citizens get three extra days this year because Emancipation Day (the day President Abraham Lincoln signed the bill ending slavery), a federal holiday, will be observed on Friday, April 15, so the IRS will be closed.
But while it may seem like April 18 is far away, local CPA Connie Phillips has the following advice to consider before starting the tax preparation process.
“Beware of the little boxed tax software you buy at the store. It’s not always what you need,” she said. “I have a client right now that is being audited because the software didn’t handle everything properly. He answered the questions to the best of his ability and he thought he had answered them correctly. As it turns out, the software allowed him to deduct something he wasn’t able to deduct. He had also got another deduction for something that wasn’t explained correctly, and then it miscalculated some credits. The software didn’t catch it like it should have. If he had been with a tax professional this wouldn’t have happened.
Phillips said that it’s easy to be lured by the low cost of the various tax-filing software out there or the advertising that claims that, “it’s so easy a dummy can do it.”
“It is not a substitute for interaction with somebody that really knows about taxes and what they are doing,” she said. “If you misinterpret what the question means or you don’t answer it completely correct, you are going to get a wrong answer, and there’s really nobody you can ask. You can’t ask the box and expect it to answer you,” she chuckled.
For those that do have trouble filing their taxes, it can be hard figuring out what to do.
“If you do your own taxes and have problems, there is no service at the IRS anymore,” Phillips added. “It is no longer the Internal Revenue Service; it’s now the Internal Revenue Non-Service. They are working on a budget dollar-wise they had back in 2009 or 2010. It is 2016 now, and as you know, costs have gone up. They do not have the money to fund what they already had, much less anything extra. As a result, they have cut back on phone service. Plus, you can’t really communicate with them online because that information could be breached like it was last year. They just don’t do that,” she said. “You basically have to communicate with them the old-fashioned way – via mail, fax or phone call.”
Phillips says the way to avoid ending up in a tough situation is to see a tax professional for advice beforehand or have a professional do your taxes for you. “It could save you a lot of time and money in the future,” she said.
The IRS offers Free File, a no-cost service. For those with income below $62,000, there’s Free File software; for those with income over $62,000, there’re Free File Fillable Forms. Visit http://qrne.ws/reeile.
The Affordable Care Act will also impact tax filing this year. According to the IRS, “The law requires you and your dependents to have health care coverage, an exemption, or make a payment with your return. If you purchased coverage from the Health Insurance Marketplace, you may be eligible for the premium tax credit.” To learn more, see www.irs.gov/Affordable-Care-Act.
For state tax forms and filing information, visit the Alabama Department of Revenue’s website at www.revenue.alabama.gov.
Whether filing early or waiting until the last minute, doing it yourself or with a professional, the most important thing is to make sure taxes are filed on-time and correctly. Remember, this year’s filing deadline is Monday, April 18.
