If you’re thinking that every year it gets harder to fill out a tax form, you are correct. I’ve been at this for over 30 years. I watch the “growth” in terms of the number of lines on the 1040 along with all the new forms and schedules. Don’t get me started with all the rules and their exceptions!
Indeed, an option you have is using online softare like Turbo Tax. If your return is simple and straightforward, I say go for it and do it yourself. It should be relatively easy and painless. This is the option I’d probably take if I were in your position.
Allow me to make a quick analogy. I recently changed my windshield wipers on my car. It was easy to do. There was a diagram in the package showing me how to do it. Since I’m not mechanically inclined, anything that’s more difficult, I take my car to the shop. I would never do my own brake job. I feel your income tax situation should have the same approach.
However, if your return is large and complex in that you own businesses, rental properties, and/or have a lot of questionable deductions, then your time is better spent finding a tax professional. Your time is valuable. And, believe me, I’ve spent countless hours “fixing” tax returns from frustrated software users.
Why the IRS will Find YOUR Return
If you have used online software, while covering your eyes and ears, and hoped for the best, keep in mind that the IRS “data mines” for common statistics of users who aggressively took the wrong deductions or made common mistakes. This will get even easier for the IRS in the future because improvements in technology lead to more efficient ways to analyze data. This often becomes an issue when things get complex because it’s not always clear where something is ‘supposed to go’.
I’ve seen many people “play with the numbers” until their refund is where they wanted. Despite the constraints of online software, it’s amazing how ‘creative’ you can be filling out a tax form. Since most software information is derived from simulated interviews, the system has to interpret what the user is entering. For example, how can you effectively write a software program to distinguish between a Schedule C business expense versus an Employee Business Expense? And make it simple for the user.
User experience (UX) is a common practice in which UX professionals find the best way for humans to interact with an app. User experience involves a person’s behaviors, attitudes, and emotions about using a particular product, system or service (Wikipedia). However, there are what UX professionals would call “edge cases”. Edge cases translate to infrequent situations in which a very small portion of users encounter. The problem with income taxes is the massive heap of rules with most of them having certain exceptions.
On top of that, the system cannot do an effective job at understanding what a user needs when things get complicated. If you’re inclined (or just extremely bored), read through the 1040 Instructions booklet and you’ll find plenty things in which you have to read multiple times just to understand.
Tubro Tax and other similar applications aren’t for everyone. If you’re self employed, have investments, or involved in a partnership, online software will be a painful experience. Not to mention, it’s time better spent doing something else.