Unlike your usual accountant, a tax attorney is laser-focused on defending your rights during an audit. Keep in mind that your Audit Defense membership applies to that year’s membership individually. So, if you had Audit Defense for your 2019 return, you’d be covered for that year if you were audited in, say, 2022. You’d have to renew your membership again in 2020 if you wanted the same protection for that year’s returns.
- The goal is to get the features you need — without paying for upgrades you don’t.
- Rather than going in person to a tax professional, which can be costly and time-consuming, online tax services are made with the consumer in mind.
- While this tool can boost refunds, it may occasionally encourage upgrades that aren’t necessary for every tax situation.
- We reviewed their sales records and identified that the discrepancy was due to a misfiled revenue report.
However, for those with more complex needs or substantial deductions, consulting a professional is often the best route to ensure thoroughness and accuracy. The free version is designed for simple tax returns and may not cover more complex situations like itemized deductions or certain types of income. At Silver Tax Group, our tax attorneys know exactly which IRS forms matter most in your case. We break down complex legal jargon into clear, simple language so that you understand every step of the process.
Choosing the Right Tax Representation for Your Needs
TurboTax Audit Defense is part of the MAX services, which cost $60 on top of your tax preparation fees. It’s important to note that this service is a flat $60, whether you file a basic or a more complicated return. While you might feel like saving money with tax preparation, sometimes paying a bit more for a version that fits your needs can be well worth the frustration you avoid. That’s why it’s important to file your taxes accurately, whether you do it yourself or find a software or company that will guide you. A few minor errors could trigger an audit, but most of us are worried about the worst-case scenario happening to us.
TurboTax
- • Additional fees may apply for complicated audits or delayed cooperation with TurboTax.
- Carla Ayers joined Kiplinger in 2024 as the E-Commerce & Personal Finance Editor.
- Not every filer will benefit from these paid add-ons, so review your tax situation carefully before choosing a version.
- A proactive, dedicated audit defense team saves time, money, and significantly reduces financial risk.
- Software programs like TurboTax, including its TurboTax MAX package, allow you to file your taxes online with expert guidance if needed.
- I also had receipts for transactions related to my freelance writing on hand for expensing purposes.
Once you mail in the requested is turbo tax audit defense worth it documentation, your issue is often resolved. If you lack the required proof, you may have the option to pay the difference and close your case or challenge the IRS’s findings. Taking prompt action upon receiving the first notice is vital to avoid penalties. We reviewed their sales records and identified that the discrepancy was due to a misfiled revenue report. We prepared and submitted a response the same week, including corrected figures and supporting documents, which was accepted by the IRS. For example, with a national restaurant chain that received a CP2000 notice from the IRS.
As long as you complete your tax filings accurately and on-time, the chances of an audit are low. If you’re searching Google for “Find a CPA near me,” keep reading to find out more about what you should look for. The choice you make in hiring a tax attorney makes a huge difference, especially for something as serious as a tax audit. You should also know that if TurboTax can’t connect you to a tax professional, they will refund your money. That’s all well and good, but $60 doesn’t go very far if you’re facing an audit and need representation.
When the accountant in the case, a CPA, realized the individual needed legal representation, they did not advise their client accordingly. That weakened the rights of the defendant, who was ultimately prosecuted criminally for that tax return audit. One of our clients, a mid-sized retail business faced an IRS investigation in 2023 after their tax return revealed a $120,000 discrepancy. The IRS flagged the return because a significant portion of the company’s inventory income and expenses was either omitted or misclassified. In an attempt to resolve the issue quickly, their accountant had already turned over all internal financial records without reviewing them for sensitive details. Today I’ll break down tax audit defense and what it means for you and your business.
While TurboTax can process standard business expenses, it lacks the depth needed for those with complex deductions, investments, and business income. For instance, TurboTax may not catch every possible deduction for those in unique industries or those with specific investment strategies. Dimov’s tax attorneys, on the other hand, are well-versed in industry-specific deductions, ensuring clients receive the full range of deductions available to them.
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However, even with these features, TurboTax’s assistance stops short of the personalized, in-depth service provided by licensed tax attorneys or CPAs. With my utter lack of experience and complicated mess of documents, I might be the best guinea pig to see which online tax services are best for most types of filers. This year, I was a freelance writer for three different publications, across three states, with three types of tax documents. I also had two W-2s, the most common type of tax document, from two different employers. Oh, and I was also enrolled in a university, which brought a separate slew of education-related documents.
Dimov’s tax professionals offer the depth and expertise necessary to navigate the intricacies of tax law, safeguard against audits, and maximize your financial outcome. TurboTax is especially well-suited for people filing simple tax returns — think W-2 income, student loan interest and a few common tax credits. While its free version works well for basic needs, paying for a higher tier can be worth it for the added support if your return is a bit more complicated.
An office audit occurs when the IRS invites you to one of its offices for an in-person review of your tax return. You will be given a specific date, time, and location, and you are required to attend the meeting, often with a legal representative. When the IRS comes after you, every document, every number, and every calculation matters. Without expert guidance, you risk turning a minor error into a major catastrophe. Audit defense offers peace of mind, protecting your rights while fighting for a fair outcome. For instance, one small business owner received a letter for a correspondence audit and lost sleep over minor discrepancies.
Is TurboTax Audit Defense Worth It? An Honest Review
Their internal team struggled with hundreds of pages of paperwork and confusing IRS forms. When they brought us in, we organized their records, set up a clear timeline for responses, and communicated directly with the IRS. Knowing what to expect—from notices like CP2000 or Letters 2205C to detailed documentation requests can help you safeguard your interests and take the right steps to protect your money. When the IRS comes looking for your money, even if only by letter, anxiety can hit us hard.
However, if your financial situation is complicated, its automated approach might not cover every nuance. In short, TurboTax MAX is a basic option that might suit simple cases but may leave you wanting more robust support when the numbers get complex. The confusion was about whether to file an amended return for an overstatement of R&D credits. With deadlines looming, the business risked incurring additional penalties for filing errors.
When an accountant reveals too much to the IRS, the consequences can be severe. Oversharing might strip you of legal protections, exposing your sensitive data and increasing the risk of penalties or even criminal charges. It’s vital to have someone in your corner who understands the nuances of IRS law and who can ensure your rights remain protected throughout the audit process. If sensitive business data is shared without proper legal protection, you could lose vital benefits like attorney-client privilege.
For those with straightforward tax returns, TurboTax offers a user-friendly, cost-effective solution. However, when dealing with complex situations or potential audits, the limitations of TurboTax Audit Defense can make a more comprehensive service worthwhile. Tax professionals, online preparation services, and tax prep software providers typically offer tax audit defense services, which is like insurance for filing your tax return. You pay additional fees for audit defense protection, just like you pay premiums for homeowners’ insurance to protect your house if it suffers major damage from some event. TurboTax Audit Defense primarily benefits those with simple returns, as individuals with more complex filings—such as business owners or investors—may need specialized representation. For those with intricate tax situations, Dimov’s tax professionals offer more comprehensive audit support, tailored advice, and representation before the IRS.
If you didn’t file for an extension (and owe taxes), you can face a late-filing penalty of a percentage of the unpaid tax (for late filing and late payment). The government also charges interest on unpaid amounts, which varies depending on your amount and time owed. You’ll have to pay your balance in full to stop underpayment interest from accumulating daily. I also had receipts for transactions related to my freelance writing on hand for expensing purposes. If you are using a new service this year, you’ll also want last year’s return in order to transfer any relevant information. There are ten items within this taxpayer bill of rights that are applicable to all taxpayers.