Bookkeeping

As long as you complete your tax filings accurately and on-time, the chances of an audit are low. When it comes to tax attorneys, shopping around can be helpful to compare and contrast what services you’re getting and what the going turbo tax audit protection rate is. If you ever find yourself in need of a tax attorney, trade audit panic for preparation with finding a qualified attorney who will represent you.

TurboTax Alternatives

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. TurboTax has established itself as one of the best free tax software programs out there, especially if you don’t have a complicated return. This tax preparation company can help you file your annual return by choosing from one of the many editions available. The word “audit” fosters trepidation in many people, but in reality the deep-tissue audits people tend to envision are fairly rare. According to the IRS, of the nearly 154 million individual returns filed for calendar year 2017, about 1 million were audited.

TURBOTAX ONLINE/MOBILE OFFERS & PRICING

As you’d expect, the higher your income, the more likely you will get attention from the IRS. According to the IRS, out of the nearly 141 million individual returns that were filed for 2011, only 1.1 percent were audited. If you filed your taxes using TurboTax, you can get free one-on-one audit guidance from a trained tax professional. Unfortunately, no.  You can’t add Audit Defense after filing your return.

• However, the Basic version starts at $59 for federal filing and $49 for state filing and pricing goes up from there based on which plan you choose.
• The IRS will charge you with a failure-to-pay penalty, which is usually 0.5% of your unpaid tax.
• If you follow the directions provided and enter the numbers on your income forms correctly, you should end up with accurate taxes just as if you went to a more expensive professional tax preparer.
• It also features an Audit Risk Meter™ that checks your tax return for common audit triggers and shows you whether your risk is high or low.
• Perhaps it’s common sense, but being 100% truthful on your tax return is an absolute must to reduce the chances of an audit.

For those who want even more protection, TurboTax offers Audit Defense, which provides full representation in the event of an audit, for an additional fee. TurboTax offers the following options for support when you receive an audit notice. Your profession and financial situation will play a key role in your odds of being audited. If you’re working at a hospital or within a practice that someone else owns and are earning a standard salary, spending that extra $59 might not be worth it.

How reliable is TurboTax?

It’s the company’s way of assuring you that if a number gets transposed or your taxes get audited, you’ve got a resource you can rely on. 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. 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.

Top Five Ways to Avoid a Tax Audit

• The IRS maintains that filing returns electronically can prevent mistakes and lower the odds of an audit.
• If you’re working at a hospital or within a practice that someone else owns and are earning a standard salary, spending that extra $59 might not be worth it.
• TurboTax Audit Defense does not include legal representation in Tax Court or any assistance if you’ve allegedly committed tax fraud.
• The percentage of people who actually are audited is extremely small, according to the Internal Revenue Service, but the number has risen slowly since 2008.

The TurboTax Audit Support Guarantee also includes the option to connect with an experienced tax professional for free one-on-one audit guidance. TurboTax makes it easy to file your federal and state taxes online without having to visit a costly tax preparation agent. With TurboTax’s Audit Defense, you can also pay an additional fee to gain some protection should you get audited. Fewer than 1% of tax returns with $200,000 or less in income are audited. That percentage grows to 10% and higher for those earning above $1 million.

We’ll ask you simple questions about your tax situation and search over 350 tax deductions and credits to help you make sure you get all the tax breaks you deserve. While audits are rare, most Americans would probably like to avoid them altogether. The percentage of people who actually are audited is extremely small, according to the Internal Revenue Service, but the number has risen slowly since 2008. If the IRS does decide to audit you, there is little you may do to stop it. You may, however, reduce the odds that you will be singled out for that extra attention in the first place.

However, we hope this review has calmed your fears about both audits and paying for TurboTax’s Audit Defense service. In some cases, Audit Defense might not be necessary or worth the additional cost, especially if you’re honest and certain your tax return is accurate. Each version offers varying levels of customer support, such as phone consultations with TurboTax experts and, in some versions, live chat support. However, even with these features, TurboTax’s assistance stops short of the personalized, in-depth service provided by licensed tax attorneys or CPAs.

TurboTax MAX is an optional add-on package that TurboTax users can access. MAX offers a number of benefits and personalized assistance to users after they file their taxes. The Audit Rate Is Typically Even Lower for Most Taxpayers Indeed, for most taxpayers, the chance of being audited is even less than 0.6%. For taxpayers who earn $25,000 to $200,000, the audit rate was 0.4%—that’s only one in 250. In addition, TurboTax Audit Defense includes identity theft protection, loss insurance, and restoration assistance.

We’re no legal experts by any means but if you’re concerned about an audit, choosing a professional with whom you work well can be a better alternative than paying $60 for TurboTax’s Audit Defense. Licensed tax attorneys make a living from helping consumers like you and me so they have a bit more skin in the game when it comes to advising and defending clients. In addition, most tax preparation services develop their software to be as straightforward and succinct as possible. If you don’t have issues entering your information (as long as you enter it correctly), it’s not likely you’re at risk for an audit. If you’re someone who deals in 1031 exchanges or even has several types of IRAs, the Premier version may not be robust enough to handle your situation.

Unusual or unrealistic itemized deductions, either for individuals or small business owners, may raise a red flag for auditors. For example, claiming a charitable tax deduction for 40% of your total income could raise some eyebrows at the IRS. You’re more likely to be audited if you make more than $1 million a year or you’re in a very low income tax bracket. Both categories historically are fertile grounds for fraud and – because of the greater complexity – mistakes in data entry.

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. TurboTax’s Audit Defense is a step up from its general audit “support.” TurboTax’s Audit Support Guarantee is included with all versions except for TurboTax Business. Users get a free consultation and audit information support to help them understand what’s happening if they receive an audit letter about their return. You will also be shown how to prepare for an audit and will have your audit-related questions answered year-round.

These services typically come at an extra cost if you were to purchase them through another source. If your return is simply entering a W-2 and calling it a day, you might qualify for the TurboTax Free Edition. Both federal and state taxes are free to file so you will only have to pay if you owe the IRS or your state. Our guide includes everything you need to know about TurboTax’s Audit Defense, including what it covers and how much it costs. We’ll also discuss your odds of getting audited, which are pretty slim for the average American.

All features, services, support, prices, offers, terms and conditions are subject to change without notice. Audit Defense, on the other hand, is a perk from paying for TurboTax’s MAX package. You’ll have the aforementioned full representation by a licensed tax professional during all interactions with the IRS.

You cannot go to jail for making a mistake or filing your tax return incorrectly. If the IRS has found you “guilty” during a tax audit, this means that you owe additional funds on top of what has already been paid as part of your previous tax return. At this point, you have the option to appeal the conclusion if you so choose. While many people choose to do their taxes themselves, wading through instructional forms and documents can be a hassle. Paying a software program or even a tax preparation specialist to take care of it all can be well worth the price. For most Americans, tax time either means paying the Internal Revenue Service (IRS) big money or getting a refund in the mail.