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diggE-filers risk missing updates, deductions, tax expert says
As April 15th approaches, to file online or not to file online is the question
For decades, Hernandez relatives and friends dutifully visited my dad's south Phoenix home at tax time. Ruben Sr. possessed esoteric knowledge missing among most Latino clans: He knew how to prepare a federal tax return without messing it up.
In 1986, dad foresaw the end of his tax-preparation monopoly with the debut of the Internal Revenue Service's tax return e-filing. Our patriarch - like many of his generation - refused to operate a computer.
Dad, now 85, still snail mails his tax return. But the rest of the family, like millions of Latinos, has turned to tax filing software or professional tax preparers.
However, a tax package passed by Congress in December 2006 is complicating a tax-time choice we must all make: E-file ourselves, or pay a professional tax preparer to figure and e-file our returns?
Sandy Abalos, founding partner of Abalos & Associates P.C. in Phoenix, says which route you take depends on your situation and goals.
"The common perception is that it's (e-filing) simple and anybody can do it," she says. Then she laughs - loud.
What makes things "terribly confusing," she says, are some tax deductions extended by Congress and signed into law by President Bush on Dec. 20. She warns that it may not be wise to file too soon before the April 15 deadline. The paper IRS forms and many of the tax-filing software programs in computers or on store selves in January won't have several extended deductions in them.
"Be aware, if you bought software (before February), you'll need to upgrade it. You'll need to download those updates."
She suggests waiting until at least mid-February to file tax returns electronically.
"Not even IRS's e-filing system will be prepared to accept the newest deductions passed by Congress before then," she adds.
Abalos recommends e-filing software for taxpayers with "ordinary" itemized deductions. "I think the software packages handle that exceptionally well." Software brands include TurboTax, Tax Cut Premium, and others. (For reviews of 2007 software go to http://tax-software-review.toptenreviews.com/)
She instructs those who are self filing to spend time (not on the tax deadline) learning and understanding the software. Also, once you complete your return, put it aside for a time and go back to review what you prepared before e-filing. And be sure to check for every tax deduction you are entitled to, she advises.
Business owners should use a tax preparer for their returns, she says.
"With all due respect, with business owners self filing, it's highly probable that the returns will not be correct, and they will not take advantage of all the tax savings available," she says.
Abalos adds if taxpayers haven't made an appointment a month before deadline, "Don't expect we can squeeze you in."
