For most of us, preparing our income taxes generates a mixed bag of emotions. For starters, recent surveys have shown that over two-thirds of American adults feel that they do not adequately understand the tax code and don’t feel comfortable filing their own taxes. This demonstrates that there is a definite need today for professional tax preparation and accounting services. Whether you owe money or are anticipating a refund, filing income taxes and completing the necessary tax preparation forms is a must-do. But how has the actual process of tax preparation changed over the years? Read on to find out!
The computer has emerged as the best way to complete and file income taxes
Up until a decade or so, the majority of Americans who completed a tax return on their own used a pen and a tax return form obtained from the local post office, library, or tax office. Tax code publications were available that allowed self-filers to study the tax code, look up their specific tax liabilities, and complete the required forms by April 15th. The problem with filing a return yourself, and bypassing the available computer programs today, is in the higher rate of mathematical errors and the ease at which tax code changes may be overlooked. One of the biggest changes seen over the past ten years is the proliferation of electronic filing.
In 2004, the IRS reported that 63% of tax filers used an electronic means of data transmission – versus filing a paper tax return form via US mail. In 2010 the percentage increased to 70% (or nearly 100 million taxpayers), and in 2013 nearly 90% of Americans paid someone to complete their tax returns – often electronically filed. The proliferation of highly accurate and easy to use tax software, as well as the knowledgeable counsel that is available from tax professionals, has led to little reliance on the traditional pen and ink tax return form.
Interestingly, surveys have indicated that the majority of Americans would rather cut their own hair than complete their own personal or business tax returns. And, the IRS reported in 2012 that the average amount of time an individual spent on completing his or her income tax forms was twenty-two hours – thirty-two if a schedule C or E was involved. Taking into account the relatively low cost of tax preparation, it hardly seems beneficial for one to file his or her own taxes these days.
Modern tax return software and tax form preparation techniques make it simple to accurately and quickly complete all of the necessary tax forms for you or your business. No longer should you drive across town to pick up the requisite forms, complete the mathematical calculations yourself, and get that all-important tax return in the mail by April 15th.
Most individuals and businesses these days could benefit greatly from the sage advice of a certified tax preparation specialist. The US tax code has seen more than 5,000 changes since 2001, and it now tips the scales at more than 4 million words. To put that in perspective, you’d have to read the entire Harry Potter book series four times to match the length of the US tax code. Qualified tax preparers will ensure you receive all of the qualified deductions and tax breaks that you are entitled to – all to help you maximize your refund and minimize your tax liability.