Tax Strategies & Credits

5 Top Reasons Not to Prepare Your Own Taxes

5 Top Reasons Not to Prepare Your Own Taxes

Every year when tax season rolls around, there is the temptation to try to save a few dollars and do your taxes yourself, using one of those readily available, off-the-shelf software packages that you're getting emails about every day.  If there' ever been a year in which tax preparation complexity has risen to new heights, it is 2014. This year's return is so daunting that it makes returns that would previously have been considered simple into a tangled web reminiscent of that of millionaires' with offshore accounts, and that means that you're taking a big risk if you decide to go it alone. Using a professional tax preparation firm — not one of those strip center temporary offices or big box firms that bring in armies of seasonal, undertrained part-time preparers  — is definitely in order this year, and here are just a few of the reasons why:

  1. The introduction of the Affordable Care Act (ACA) means that there are new worksheet calculations, reports and forms that need to be filled out as part of the 2014 tax return. There are a lot of potential penalties tied up with the ACA, so you want to make sure that everything is filled out correctly or risk receiving a notice from the IRS.
  2. Those who purchase their health insurance through a government marketplace need to be extra careful in ensuring that their return is prepared properly. Providing incorrect or incomplete information could mean having to repay the government for the subsidies you have received, and those payments can add up to thousands in some cases.
  3. You know the phrase about an exception to every rule? There are over thirty exceptions to the tax rule about being penalized for not having health insurance, and if you have been uninsured during any part of 2014, you'll want to work with a professional who can help you take advantage of one of them.
  4. 2014 introduced new retroactive repair and improvement regulations for business owners and landlords. There is a 200-page book outlining the details and requirements, which involve filling out the Form 3115 accounting change form in order to made current year income adjustments for expensing, or for capitalizing decisions made in the prior open tax years that aren't in compliance with the new rules.  You'll want somebody who has studied the changes taking care of this on your behalf.
  5. In the last days of 2014, Congress passed the Tax Increase Prevention Act of 2014 to preserve many existing tax breaks. Only a seasoned tax professional who is dedicated to staying current on the latest code will be familiar enough with all of them to ensure that you get all of the benefits available to you.

If you're in need of professional help with your tax preparation and planning, a quick visit to www.TaxBuzz.com will lead you to a local professional who can help. The site provides background information on each professional, giving you all the details you need to help you make an informed decision.

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Lee Reams, BSME, EA

Lee Reams, BSME, EA

Editor-in-Chief

Besides his role at CountingWorks as an educator and speaker to thousands of accountants nationwide, Lee manages a technical research service for a large group of tax accountants which sharpens his technical skills. Lee served on the Board of Blackline Systems, is a former Board of Director for the California Tax Education Council, is a Past President of the San Fernando Valley Chapter of Enrolled Agents, Member and Past Director for the California Society of Enrolled Agents.

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