I will start off with a shocking confession: I have worked as a professional tax consultant and preparer.

Should you attempt to prepare you own taxes? That all depends on you financial situation. If you are like most people, you most certainly can prepare them yourself with the assistance of a program like TurboTax. Most folks have a relatively simple return consisting of W-2s, some interest and dividend income and itemize their deductions if they own their own home. However, if your return is more complicated, you could do yourself much more harm by doing your own taxes. Tax professional earn their keep by their knowledge of the taxation system and how well they can tailor that knowledge to specific clients. In addition, most tax professionals also have a great deal of experience in dealing with the IRS, State and Local agencies, should a problem arise.

TurboTax is an excellent program for someone who is not that familiar with how your income and deductions are treated on the return. The interview process is a very good imitation of siting down and having your taxes prepared by an accountant. The program asks you questions about possible income and deductions that you might have. If your return contains these items, it presents you with a screen to enter the data. The program takes you through the entries step by step, which can be rather cumbersome and confusing at times.

The option of switching into the forms method is one of the programs advantages. The program will present you with a blank form identical to the source document that you have in front you. This makes entry of things like W-2s & 1099s a breeze. You can go back and forth between the two methods as you please. The help section of the program is fairly comprehensive and has improved with each year’s release. Most line items on the return have their own help section that educates the user in tax law and program usage. Additional tax information can be obtained straight from the horse’s mouth: www.irs.ustreas.gov .

The ability to import information from prior year’s tax returns is essential for capturing carryovers due to limitations and items like estimated payments. If this is your first year preparing your own return, check your prior years return for any carryovers; capital losses, net operating losses, charitable contributions, State & Local estimated payments, ect. Prior Year import also eliminates a great deal of data entry on reoccurring items.

After you complete your return, the program will check it for errors. If there are any, it will walk you through the process of making the corrections. This is an indispensable step and should never be skipped. The deduction finder process and the audit alerts are fairly useless but give you some additional information about the tax collection process.

A great deal of information flows through to numerous forms and finding the source form for an item can be confusing. Opening forms that you do not need can create a headache when it comes time to print out your return. Be very careful and read every question twice. One wrong answer or mistake can cause the entire form to be prepared incorrectly and as a result the return could be incorrect.

My biggest pet peeve with the program is the copy of the return printed for your records. The program prints out so many useless schedules and documents that you can run through an entire forest of paper. A copy of the return that you filed along with your supporting documentation should be sufficient for your records.

Bottom Line: If you have a simple return, go for it. If your return is more complicated you owe it to yourself to have a professional prepare your taxes. Get recommendations from friends and ask questions.


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