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Free Tax Prep?? Warning...you get what you pay for...

Date: April 9, 2020

Author: Trish Wright

Categories:

While this may seem like a self-serving post.  It isn't. Believe me, we don't make our living off of doing "EZ"s, students and seniors.  However, in the past couple of week several of those same demographic groups came to be in front of me.  In the case of the EZ, with a few short questions, I was able to determine the Tax Payer could be head of household claiming her parents who they supported and thus saved thousands of dollars this year and every year going forward. We are doing 3 years of amended returns. The "EZ" will have these savings forever, even though the tax payer will probably do their own taxes on Turbo again next year.  I mentioned, "You know I just paid for myself for about the next 5 years in just one year."

A senior came in to the office. They had been doing taxes through the free senior center tax program.  This tax payer owed money every year and couldn't understand why. We set up voluntary withholdings on social security and changed their withholdings on their pension. I'm pretty sure they won't owe next year.  We also showed how "Senior" could claim their grand daughter being that they lived in a multi-generational home. There are bunches of questions to ask in this area to determine what strategy you can/can't use.  Guess what I said, "You know I just paid for myself for about the next 5 years in just one year."

Another area where FREE does not pay may be in deciding when and when not to claim your adult college-going children who also have decent jobs. By shifting children to stand on their own tax return, they could be able to take the college credit that the parent might not be able to take and by being on their own, "Student" may also qualify for the stimulus check being issued. There are bunches of questions to ask in this area to determine what strategy you can/can't use. FREE doesn't ask you these questions.  Most tax payers think their older children are worth way more than they actually do in terms of tax advantages, but with the new tax code that might not be the case. Guess what I said, "You know I just paid for myself for about the next 5 years in just one year." Just kidding.

Whenever I give non-tax advise, I do say "You know this advise is free and free advice is worth exactly what you pay for it."  Always do your research and try to find several different sources and points of view.  Your tax adviser can be one trusted point of view on a wide range of topics. If your tax accountant isn't part of your "village", keep looking until you find one that is. 

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