Just as taxes are becoming more complicated, the IRS's resources are being cut, and taxpayer services are expected to be reduced to a historically low level. This is expected to affect everything the IRS does, from audits to answering questions.
Here is what you can expect (or not expect) from the IRS this tax season, and what you can do to make sure your tax return is still done correctly.
What is going to suffer?
The IRS's budget has been cut by $346 million this year, and it is now receiving $1.2 billion less than it did in 2010.
Perhaps the biggest issue that will affect the taxpaying public will be the inability to get questions answered. According to the IRS itself, only about half of the 100 million expected callers will actually get through to a representative. And those who do get through may have to wait for 30 minutes or more just to talk to someone.
Other issues, such as a reduced ability to conduct audits, could come as a relief to many people, but there is still a possibility of being audited if something is wrong with your return. And, unfortunately, the inability to get through to an IRS representative isn't a valid excuse for tax return errors.
What you can do about it
Basically, the best way to make sure your taxes are done correctly despite the limited availability of IRS representatives is to educate yourself as much as possible about the tax changes for the 2014 tax year (the return you're about to file).
There are a few changes, but the one most likely to cause confusion concerns the Affordable Care Act, and the documentation required, as well as the potential penalties for not having coverage. I have written about a few of these issues, as well as other tax topics, to help you know the new rules.
And if your taxes are a little more complicated than the average return, or if you typically need to call the IRS for help, it may be a good idea to invest in a comprehensive guide to all of the tax deductions and credits available. That way, instead of having to call the IRS to find out if say, something qualifies as a business expense, the information will be right at your fingertips.
Another option is to invest in a software program that can walk you through everything, step by step. The prices are reasonable, and you can usually have the cost taken directly out of your refund. These programs can assess your audit risk based on the information you enter, and can make sure you don't have any mathematical errors. Plus, the cost of the software is a small price to pay for the peace of mind that you're doing things right.
Defer to the experts?
Finally, if you're still unsure about doing your own taxes without readily available IRS assistance, it might be a good idea to defer to the professionals.
A professional tax preparer is more expensive than the other options I mentioned. According to a Wall Street Journal report, the average cost for a federal and state return with itemized deductions is $246, or $143 without itemizing.
However, most reputable tax preparers are just as knowledgeable about tax laws as the representatives at the IRS, and can make sure everything is done right.
Whichever way you choose to go, you may have to take a more active role in investigating issues with your tax return this year. However, with the proper use of resources, you'll probably find that you won't need to call the IRS after all.
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