The IRS just released their strategic operating plan for the present thru 2027. In addition to improvements in daily operations and taxpayer services, they plan on scrutinizing individual and businesses making over $400K a lot more than in the past. Here’s an excerpt:
“Funding in the enforcement account will be used
consistent with the Treasury directive that IRA
resources are not used to increase the share of
small businesses or households earning $400,000
or less that are audited relative to historic levels.
Any growth in staffing above historic levels will be
limited to focusing on high dollar noncompliance
such as large corporations, large partnerships and
high-income individuals where current coverage
does not promote taxpayer compliance.”
I’m certainly one of the “everyone”. Even with the tax software I find some of the ins and outs a bit mind-boggling, and our taxing and financial situation is relatively bare bones. I generally know what the bottom line should be, but the getting there can be somewhat of an adventure.
Do you feel the tax programs are not aggressive enough? When I had a tax specialist do my taxes in the 80’s and again in the mid-2010s, I thought they were not aggressive enough. On both occasions I found things that were not done properly and things that were overlooked.
I always go over my returns and do a Bozo check whether I do them with a program or have them done by a professional.
Woody might have been a bit more specific if he’d said “nearly everyone” I guess, but his “everyone” probably comes very near to the truth. True, some people with complicated issues might go to a professional, but I suspect there are few among the great unwashed who want to tackle today’s federal taxes without the aid of software on their home computers.
We’ve never used software for our taxes, always do them by hand.
Last year a friend gave us a copy of TurboTax so we could enter our numbers and compare with how we do manually. Ridiculous the number of questions they asked that we don’t need to do our taxes, so gave up after about 5 minutes.
About three years ago i used a new CPA as the one I’d been using retired. Went round and round with him on several issues, most notably my son was a qualifying relative (and thus a dependent)…he couldn’t get past the fact that he was too old to be a qualifying child. When i used the IRS website to verify that he was a qualifying relative, it was very clear that he was. After repeating over and over and over half a dozen times or more, he finally looked at the qualifying relative criteria, which very explicitly lists sons and daughters as being eligible if they meet the other criteria.
Hmmm… For something as important as my FIT and State income taxes I’m willing to spend a little time and a few bucks on them. For both of them combined, I don’t think I spend more than three or four hours gathering the info, inputting the data and submitting the returns. I think the auto-filling of all my repetitive info is a real time-saver.
In late November or early December I might spend an hour going directly to the forms and entering basic income info to get accurate info to fine-tune my annual estimated taxes by withholding them from my annual RMDs.
I don’t have over 6 or seven income categories and mine’s pretty straightforward too.
You know what’s more of a time-saver? Not inputting that information at all. Almost nothing on your W-2 form that the tax software makes you enter is used to calculate your taxes or goes on your tax return. Same with all the other forms you get. Generally you need one or two numbers from each form to do the calculations.
Which just proves my point. I know what goes on the tax return because I enter it myself.
Judging from your prior comments, and if you tried using TurboTax, you must have opted for the full interview. With TurboTax you can choose three ways you want to enter the data. you can take the guided tour, choose which interview topic(s) you use, or you can enter the info in the final form directly or… a combination of all three methods. It saves a ton of time and keystrokes. You can also choose which data to bring forward and what to leave behind. Stuff like names, addresses, SSNs, etc. are automatically filled in even if you choose to just fill in the final forms manually. Make a mistake on a SSN or other critical data and you can cause yourself some real headaches.
I have just one W-2 and it is filled out automagically by the program when it pulls the information from the source. And all the source information is auto-loaded from the prior year’s data. Most of my investment income is handled the same way, I just choose which sources I want to pull from a list used in prior years. I also like the features that save me all the hassle of handling rental property depreciation and expenses
I read every line of my FIT final return as a final bozo check before submitting it.
I’ve passed three audits since using TurboTax and on one got back an additional $500 of overpayment related to business write-offs.