Tax season is fast approaching and people need to be aware of some of the scams that are out there. Most people are willing to pay a tax prep fee to get their taxes prepared but why would you when you can do it yourself.
With tax season fast approaching, it's time to start thinking ahead about getting your taxes prepared. It's always a good idea to start thinking about who will prepare your taxes for the following season a good 2 or 3 months ahead of the season. Most people are willing to pay a tax prep fee to get their taxes prepared but why would you when you can do it yourself.
Look people, online software is all you need. Not speaking directly to anyone in particular here, but if you can read, you can prepare your own taxes. Tax programs like H&R Block or TurboTax which is created by Intuit Inc., is a very simple online software. While working for H&R Block in 2007, I took notice of a lot of hidden fees that were being charged. Senseless fees that are charged simply because it's just another way for them to make extra money from the unsuspecting. However, H & R Block does have a great online tax software. The most it will cost is $19 to $29 to state file. Compare that to them charging you anywhere from $100 to $300 when you get it prepared in office.
I think most people are petrified to prepare their own taxes out of fear of mistakes. Here's the most you will need to have with online software.
Your name, date of birth, social security number, physical address, dependents info, W-2. Have I named anything that you shouldn't know by hard or shouldn't have in your purse or wallet. Filling out the online W-2 is simple. It's just an electronic version of what you've received from your employer. The only thing that's missing are the numbers. Once you transfer exactly what's on your W-2 onto the electronic W-2 the software automatically totals everything up. It guides you like a GPS.
All that's left to do at this point is to answer a few questions like, have you lived in the U.S. for at least 6 months and contributions if you have any, if not, then skip to the next section and so forth.
I mentioned the H&R Block software for a few reasons. It has error protection, audit support and it's very easy to navigate.
The economy is really in a slug right now, most people are going to want their refund as soon as possible, so one scam to look for this tax season is the rapid refund scam. Tax companies will tell you they can get you your refund in as little as 24 to 48 hours, they've been doing it for years. What we need to look at are the fees. Basically, this method of refund is illegal according to the IRS.
What the company is doing is promising money that the IRS hasn't put into your tax account yet, so they go through banks in order to fund the account, henceforth, charging you outrageous fees to do so, just to get back your own money that you've worked for the entire year.
IRS has never approved this method, it's just a method that's been excepted as long as no one complains to the IRS that a crime has been committed, and tax companies know you want cause they've got you thinking they've done you this huge favor and we buy into it because we need or want our money so badly. In actuality, we've been ripped out. First of all, the bank charges a fee, which usually is anywhere between $10 to $50. Then they charge you the origination fee which is a small percentage of the total refund. If that's not enough, then your tax preparer charge you a tax prep fee anywhere between $100 to $300 or more.
If you go into H & R Block to get your taxes prepared, you are getting charged per page, and per W-2, plus your bank fees. H & R Block has it's own bank, so why would they need to go though other banks to fund their clients tax accounts? It's a rip off. Plain and simple, so they can make more money. H&R Block has, I believe a full finance bank, with loans, mortgages and the whole nine yards. They have so much capital, they even have their own debit and credit cards. So ask yourself this one question. Why do they need to go through Santa Barbara Bank or Republic Bank? It's a numbers game.
Before going out next tax season check out some of these publications on tax scams and what you should be aware of.
You can find a whole line of tutorials for Turbo Tax on YouTube
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com