Make this the year you start doing your own taxes!
Using online tax solutions can save you money compared to a tax professional.
It’s also a lot faster, easier and more accurate than preparing your taxes with paper, pencil, and a calculator.
If you haven’t tried online tax software yet, check out these myths vs. facts before you decide how to prepare your 2015 tax return:
Myth 1: I don’t know much about taxes, so I might miss deductions and credits if I do my own taxes
Fact: A tax preparer asks standard questions, and asks for additional information as he or she sees fit.
Online tax software does the same thing.
Tax software developers and accountants have years of experience and design the interview with the right questions to make sure you’re getting all the tax breaks to which you are entitled.
In fact, you may find new tax breaks or benefits you’ve never heard of by using tax software.
For example, the software may ask if you paid educational expenses for yourself, your spouse, or a dependent.
If you did, the program will help you decide which educational credit or deduction you may qualify for, based on your complete tax situation.
Tax professionals know a lot about taxes, but no one knows as much about your financial situation as you do.
When you combine your knowledge of your own finances with the expertise built into tax software, you can confidently prepare and file your own return.
Myth 2: Doing my own taxes sounds difficult and complicated
Fact: Online tax software is no harder to use than most of the other browsing, shopping, and other activities you perform online every day.
In fact, it may even be easier.
If you follow the step-by-step interview, preparing and filing your taxes is as easy as answering one question at a time.
The tax software does the rest for you.
Myth 3: Tax software asks questions that have nothing to do with my situation
Fact: The questions you answer in tax software are determined by your answers to previous questions.
If you don’t have interest income this year, you won’t hear more about it.
If you have a very simple return, tax software determines exactly what you need with minimum questions.
Myth 4: It’s easier to use a tax preparer and let someone else do all the work
Fact: For many people, the hardest part of preparing a tax return is gathering the information.
In the best-case scenario, you track your financial information all year, so it’s easy to find when you need it.
Regardless of how well organized your information, you still have to put it together at tax time. No one else can do that for you.
By the time you hand off your information to your tax professional, you’ve done the hard part.
You may have even filled out an “organizer” for your tax professional with all your information.
You’ve already done the hard part – you may be surprised how little additional effort it takes to finish the job.
Myth 5: I’m afraid I’ll get audited if I use tax software
Fact: The chances of being audited are very low in any particular year.
As a general rule, your chances of being audited are greater if you make a very high income, meaning a million dollars or so per year.
With tax software, you can actually reduce your chances of being audited.
That’s because tax software helps you catch potential mistakes.
For example, the software asks you questions to help you determine if you meet all the qualifications for tax breaks.
In addition, when you use tax software, you can’t make math mistakes.
That’s one good reason the IRS audits software-prepared returns at a lower rate than it audits returns prepared by hand.