Navigating Tax Refunds and TurboTax: Should They Be Your One-Stop Solution?

When it comes to tax season, many rely on tax software like TurboTax to streamline and simplify the process of preparing and submitting tax returns. However, what happens when the software successfully prepares your return, yet you find yourself waiting for a refund or still owe money to the IRS? This raises important questions about the role and responsibilities of TurboTax and similar tax preparers. Should tax software companies be solely responsible for getting the tax money owed to you, or are you on your own once the return is submitted?

Understanding the Limitations of Tax Software

While TurboTax and other tax preparation software can be highly efficient in preparing your return, they come with specific limitations. One primary limitation is the scope of the services they offer. These software programs are designed to assist you in the initial preparation of your tax return. However, once your return is submitted, the responsibility to chase any owed refunds or address issues with the IRS falls to you or your chosen tax professional.

Note that TurboTax does not include representation services for the IRS. While the software can guide you through the process, representing you in front of the IRS may require a different set of skills and expertise.

Tax Refunds and Delays: What to Expect

When you file a tax return and find out that you are owed money, you naturally expect this refund. However, the timeline for processing refunds can vary widely. For older tax years like 2017, it is not uncommon for refunds to take longer due to various reasons, including bottlenecks in the IRS's processing system.

For other tax years, refunds may be processed more quickly. Still, it's important to understand that the IRS has a significant backlog, especially during peak filing periods. If your refund is delayed, consider checking the IRS eFile Status portal to track the processing of your refund.

Seeking Professional Help for Audits

If your tax return was audited and you owe money, the situation can become more complex. In such cases, it might be beneficial to hire a Certified Public Accountant (CPA) to review the IRS notice and represent you. The decision to pursue professional help depends on the amount involved. While CPA fees can add up, they might be worth considering if the money owed is substantial.

Reasons to Hire a CPA

Complexity of Tax Issues: Tax audits often involve complex financial and legal issues that require a professional's expertise to navigate. Time and Energy: Dealing with the IRS can be time-consuming and stressful. A professional can handle the communication and documentation for you. Probability of Success: A CPA can significantly increase your chances of reaching a favorable resolution, such as a reduced tax bill or potential tax refunds. Understanding IRS Procedures: CPAs are well-versed in IRS procedures and regulations, which can be crucial in minimizing tax penalties and interests.

Conclusion: While TurboTax and other tax software can be incredibly useful for the initial stages of filing, they are not a one-stop solution for all your tax-related concerns. Once your return is submitted, it's important to stay proactive in monitoring your refund or addressing any issues with the IRS. Depending on the complexity and amount involved, seeking professional help from a CPA can be a wise investment to avoid unnecessary stress and potential penalties.

Whether you decide to hire a CPA or handle the situation yourself, staying informed and prepared is key to navigating tax season effectively and successfully.