Look in your IRS letter or notice, and select the corresponding number in this article (for example, CP11, CP12, CP14, CP2000) for more information about what to do next.
Perhaps it’s common sense, but being 100% truthful on your tax return is an absolute must to reduce the chances of an audit. Realistically and accurately reporting income, deductions, credits and other figures can help keep an audit at bay. 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.
Annual Audit Defense Membership Agreement
No matter where you fall in the spectrum, an audit can be a scary thing, especially given the ramifications. 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.
Staying on the right side of the IRS
If you qualify for TurboTax Free, you might be able to file your federal and state taxes without paying anything. 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. When it comes to tax attorneys, shopping around can be helpful to compare and contrast what services you’re getting and what the going 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 ONLINE GUARANTEES
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 turbotax audit protection tax attorney makes a huge difference, especially for something as serious as a tax audit.
- Free filing of simple Form 1040 returns only (no schedules except for Earned Income Tax Credit, Child Tax Credit and student loan interest).
- 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.
- In 2020, just 0.3% of individual tax returns were audited, though those who earn seven figures per year (or who pay $0 in tax) are about six times more likely to face an audit.
- 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.
• Additional fees may apply for complicated audits or delayed cooperation with TurboTax. TurboTax Audit Defense, an optional add-on through TurboTax MAX (around $60), aims to protect users in the event of an IRS audit. Should you be audited, TurboTax will assign a representative to assist with the audit process and help manage communication with the IRS.
Plans and Pricing
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. TurboTax MAX’s worth comes down to how much you’re concerned about being audited. If you’re in that “unlikely” category, there might be better places to spend that $59. Audit Defense, on the other hand, is a perk from paying for TurboTax’s MAX package.
- BY ENROLLING AND USING TAXAUDIT, YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTOOD, AND AGREE TO THESE TERMS AND CONDITIONS.
- 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.
- In practice, this means communicating and negotiating with the IRS on your behalf.
- Provide in a timely manner the information and documentation necessary to substantiate the various items of income and expense in question so that your Audit Representative(s) can prepare your defense.
Paying a software program or even a tax preparation specialist to take care of it all can be well worth the price. 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. For most Americans, tax time either means paying the Internal Revenue Service (IRS) big money or getting a refund in the mail.
Assistance with Investments and Stock Options
One of the most common red flags for auditors – erroneous data entry – is also one of the most preventable. It seems simple enough to follow the advice to “double-check your return,” but surprisingly, people are often too careless regarding their taxes. While audits are rare, most Americans would probably like to avoid them altogether.
Before that looming deadline (or deadlines if you file your taxes quarterly) hits, you must have all of your financial documents in order so that your tax return is as accurate as possible. The slightest miscalculation could lead to an inaccurate return, and if a discrepancy is big enough, it could garner the Internal Revenue Service’s (IRS) attention—and you could be facing the dreaded audit. Software programs like TurboTax, including its TurboTax MAX package, allow you to file your taxes online with expert guidance if needed.
Connect with an expert
The biggest difference between the free service and Audit Defense is having someone to represent you in dealing with the IRS. But given that’s where TurboTax’s defense ends, you might be better off dealing with an unlikely audit with a tax attorney—if that time ever comes. 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. As a physician, a couple of those audit red flags might apply to you—particularly the sole proprietorship and being a high earner.
Keep reading to find out if paying $60 for this service is worth the cost. For those who have never been through the audit process and want to make sure they’re not being taken advantage of, this expert guidance can be well worth the cost. 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.
This Audit Defense Plan shall also be deemed to be terminated if you did not pay the appropriate fee to Intuit Inc. or if the TurboTax tax preparation fee was subsequently refunded to you by Intuit Inc. Investing can be complicated, and TurboTax may not always provide accurate guidance. Dimov’s team can help you identify tax-saving strategies specific to your investments, including stock options and restricted stock units, which often require specialized knowledge to maximize potential deductions. Free filing of simple Form 1040 returns only (no schedules except for Earned Income Tax Credit, Child Tax Credit and student loan interest). TurboTax Audit Defense does not include legal representation in Tax Court or any assistance if you’ve allegedly committed tax fraud.
First, we’ll guide you step by step, to help you avoid making mistakes while preparing your tax return. Then, when you’re finished with your taxes, TurboTax double checks your return to ensure accuracy and avoid common audit triggers. 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.
TurboTax offers the following options for support when you receive an audit notice. Of course, even with a spotless tax return, there’s always a rare chance you may be randomly audited. Determining how likely it is that you’ll be audited depends on your situation.
