Taxes

Fixing TurboTax Returns

I support TurboTax users who prepare their own ta returns and covered this topic last in a February blog post titled “Support for TurboTax Users“. This is not a common service offered by CPAs or professional tax preparers but it works for me simply because I often wind up developing a work relationship in other areas. At this time of year, it is common for accountants to receive requests to fix errors caught by IRS, the state or local tax authorities. I am working on two of these TurboTax correction cases today.

Clients are often surprised that the cost of fixing a TurboTax return is often more than having the return correctly professionally prepared in the first place. The reason is simple: fixing a tax return is a three step process that involves more work, more know-how, and more technology that simply preparing an original tax return.

The first step is to import the TurboTax data into a professional tax software and check for errors. Past experience indicates a strong possibility that new errors will be detected.

The second step is to adjust the tax return. This involves a working knowledge of tax laws and the objection of the tax authority.

The third step is to resubmit and get an acceptance of an amended tax return. An open unresolved tax return can grown into a serious headache.  The goal here is to get the matter closed.

New clients who haven’t used a tax professional often say that they are completely unaware of the fees charged for professional representation. Of course it depends on the issues, the complexity and the number of tax returns involved but I typically handle routine tax audit responses for $400 to $500 to fix TurboTax returns.

It make sense to combine this effort with some tax planning to reduce taxes next year. The savings from this combined effort can more than make up for the cost of the amended tax return.

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