More taxpayers than ever are finding themselves confused by tax rules and forms and wondering whether they’ve left money on the table. While tax software can help fill in some of the blanks, they may not be adequate for many taxpayers’ needs. The Tax Cuts and Jobs Act (TCJA) may be, as some have joked, the “Full Accountant Employment” Act.
Why Taxpayers Are Having Trouble
A recent survey of more than 2,000 taxpayers revealed that nearly half cope with the trials and tribulations of tax prep by watching TV, surfing the internet, listening to music, cooking, or doing just about anything but focusing on their taxes. Fourteen percent of survey respondents stated that they drank alcohol while completing their tax return.
Combining these distractions with the complexity of the U.S. Tax Code seems to be a recipe for disaster. Many taxpayers may not be taking all the deductions and credits to which they're entitled, while others may be hitting "yes" on questionable deductions that could subject them to an audit. In just about every situation, having your tax return professionally completed so that you can avoid an audit is far cheaper than paying to defend against an audit (plus having to pony up fees and penalties) at a later date.
What This Means for Tax Professionals
After learning that DIY tax prep is often a penny-wise, pound-foolish decision, many taxpayers may find themselves turning to professional help to make sure they’re maximizing the benefit of the TCJA. In many cases, the time savings of not having to complete a tax return yourself combined with the knowledge that you’re squeezing every last possible penny out of your tax refund can make tax prep fees seem like money well spent.