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Is TurboTax Audit Defense Worth It? The Honest Review

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    Each year, over 200 million Americans file their tax returns in hopes they won’t have to pay a large tax bill or in hopes that they will receive a significant return. To ensure that you receive the return you deserve or to ensure that you don’t end up paying more than you owe, you will want to make sure you file your return as accurately as you can.

    If you don’t, there is a high chance the IRS will audit your return. Household tax preparation software services, such as TurboTax, come with audit protection services, which is why every year, millions of taxpayers file their taxes using TurboTax.

    For many, it’s the simplest and most convenient way to file. However, some people are hesitant to use TurboTax because they’re not sure if it’s worth it.

    After all, there are so many other tax preparation software options out there. So, what makes TurboTax stand out? And is it worth the price?

    To learn more about this service and if it is even worth purchasing, check out our guide below. We will cover all you need to know about TurboTax Audit Defense and other alternatives that may better suit your situation. 

    For those looking for a more comprehensive and personalized audit defense service, consider exploring Silver Tax Group’s Audit Defense services. Their team of experienced tax attorneys offers specialized services that go beyond what typical tax software can provide.

    What Is TurboTax?

    TurboTax is an American household favorite when it comes to filing your annual tax return. You can use several different editions, but the most common one is the TurboTax Free Edition. 

    TurboTax Pricing

    To understand whether or not TurboTax is worth the price, it’s essential to know how the pricing structure works. TurboTax offers three different versions of its software: Basic, Deluxe, Premier, and Self-Employed. The price you pay will depend on which version you choose. 

    The Basic version is the cheapest option, but it doesn’t include all of the bells and whistles that the Deluxe and Premier versions do. If you have a simple tax return, the Basic version might be all you need. However, if you have a more complex return, you might want to consider one of the other two options. 

    The Deluxe version is the most popular choice for filers with more complex returns. It includes features like deductions for home office expenses and an audit risk meter that lets you know if your return is more likely to be audited by the IRS. 

    The Premier version is best for filers with investment income or rental property income. It includes everything in the Deluxe version, plus extra help for those with investment income. 

    All three versions include free phone support from a TurboTax expert, but only the Premier version includes live chat support. Keep in mind that even with the Premier version, you do not get to speak with a real tax attorney. So, if you have any sort of tax questions that may be complex, even the highest level package may not work for your specific tax situation.

    So, what does all of this mean in terms of whether or not TurboTax is worth the price? Simply put, it depends on your individual needs and circumstances. If you have a simple return and just need to file your taxes quickly and easily, then TurboTax Basic might be all you need—and starting at $59* for your federal filing + $49* per state filing, it’s a good deal. 

    However, if you have a more complex return or want peace of mind knowing that you have expert help available if you need it, then opting for one of the more expensive versions, or working with a tax lawyer might be a better choice. After all, when it comes to your taxes, it’s always better to be safe than sorry. Trust us, you do not want the IRS auditing you.

    Turbo Tax-Free Edition

    As the name states, the free edition of TurboTax is entirely free. This covers federal and state filing. This edition is excellent if you have a reasonably simple tax return. Those with simple returns typically have a W2 from a job and not many, if not any, deductions. 

    If your situation is more complicated than claiming the standard deductions or having children, you may want to contact a tax professional for more assistance.

    What Is TurboTax Audit Defense?

    As mentioned earlier, there are different editions and added services that you can pay for. One of those additions is TurboTax Audit Defense. TurboTax Audit Defense provides you with an audit defense if the IRS ever tries to audit your return. 

    If you get audited, TurboTax will get a TurboTax professional to defend you and assist you with the audit. You can purchase this addition through the TurboTax MAX option, which costs you $60. If TurboTax cannot connect you with a professional, they will refund you the $60.

    What Is Included in the TurboTax Max Service?

    In addition to the audit defense, the MAX service includes loss insurance, identity theft monitoring, and restoration help. If the Internal Revenue System pulls your return for an audit, TurboTax’s representative will walk you through the process from the beginning to the end. Many clients reported that they enjoyed this service, whereas others didn’t have the same experience. 

    Is Turbo Tax Audit Defense Worth It?

    In general, the TurboTax Audit Defense addition is not necessarily worth it for several different reasons. The first reason why adding this to your tax return is not worth it is because the IRS is unlikely to audit your return.

    On average, one in every 333 taxpayers gets audited. Percentage-wise, this is only about 0.3% of the total population of taxpayers. 

    Less Likely to Get Audited When Using TurboTax

    Another reason why getting TurboTax Audit Defense may not be worth it is that those who use TurboTax tend to have more straightforward returns than others. However, if you run a business and have complicated investments, you should reach out to a tax attorney to help you file your taxes. 

    As mentioned earlier, those who use TurboTax typically only file their 1099s, and W2s, and claim the standard tax deductions. As long as you report your information accurately, you are less likely to receive an audit letter in the mail. Even if the IRS audits you, it will most likely be something as small as a math error or something minor. 

    What’s Included in TurboTax Audit Defense?

    Although TurboTax Audit Defense helps handle communication with the IRS about the audit, there are a few limitations and exclusions listed in the certificate. The main service offered by TurboTax is having someone from their company send out letters to the IRS. This can be very beneficial, especially if you aren’t too familiar with tax codes, and communicating with the IRS can be quite tiresome. 

    What TurboTax Audit Defense includes:

    • Negotiation with the IRS through appeals 
    • Pre-litigation appeals review before tax court trial
    • Develops a strategy with you before communicating on your behalf

    If the IRS and your assigned tax professional can come to a settlement, they won’t finalize anything until you approve it. Again, this service may not be necessary, especially if you have a reasonably simple return. 

    What Is Not Covered under TurboTax Audit Defense

    TurboTax Audit Defense may sound like a safety blanket to protect you from an audit, but it is essential to remember that there are some limitations and exclusions that come with this service. For example, the TaxAudit service does not provide legal representation in court if your case goes to the Tax Court.

    TaxAudit service limitations:

    • Does not provide legal help for any alleged or actual criminal or civil fraud
    • Does not amend local, federal, or state returns
    • No collection notices assistance for undefended audits
    • Does not organize records, do bookkeeping, or reconcile checkbooks

    If the audit requires additional work that costs money because you reported your audit late or you don’t cooperate, you will have to come out of pocket for these expenses. Many clients refer to this service as having a basic insurance policy on your simple return. 

    Pros of TurboTax Audit Defense

    Based on the information provided, it seems like this service offers more cons than pros. For example, an advantage of using TurboTax Audit Defense is that you have a piece of mind that you have some form of assistance in case the IRS audits your return. TurboTax can help you negotiate and correspond with documents sent from the IRS. 

    Cons of TurboTax Audit Defense

    Based on the very minimal protection you receive, the price is expensive. As mentioned throughout the article, audits are rare, specifically for those with relatively easy tax returns. If the IRS audits your return and accuses you of any civil or criminal fraud, TurboTax won’t be able to do much on your behalf. 

    Should I Hire an Experienced Tax Attorney?

    Suppose you are a business owner filing your tax return. In that case, you may want to seek the opinion of an experienced tax attorney, especially if you aren’t taking the standard deduction. As a business owner, you most likely already have recorded many of your purchases to use as a deductible expense. 

    Business costs, such as internet, rent, new equipment, and more, can quickly exceed the acceptable standard deduction amount. When you file your return via an online service such as TurboTax, you can list out your deductions, but it doesn’t tell you how to prove them.

    It also doesn’t properly advise you on what constitutes a deduction for your type of business. Tax attorneys have more knowledge about the different types of deductions you can take for your specific industry. They will be able to let you know how to prove these expenses and what other deductions you qualify for. 

    Bookkeeping Services

    Unless you hired an accountant to handle your taxes for the year, you most likely are the only person handling your bookkeeping tasks. Unfortunately, if you are the only person doing the bookkeeping, there is a huge chance you could cause a massive error. If you inaccurately report your information, it could trigger the IRS to do an audit. 

    Other possible punishments you could get for inaccurate documentation:

    • Paying too little or too many taxes
    • Harsh penalties and fines

    Online tax software won’t let you know that you put in the information wrong. It assumes you know what you’re inputting. When you work with a reputable tax attorney, they can walk you through all of your possible deductions to reduce your tax liability. If there are any inaccuracies, they will handle that on your behalf before you send in your return to the IRS. 

    Factors in Your Investments

    Even though TurboTax can process information about your investments, investing itself is a confusing concept. How can you be sure that you’re reporting all the correct data or if you’re missing any forms or other reports?

    The software won’t be able to help you properly identify your tax basis if it is not already reported on your investment documents. If you have any employee stock options or restricted stock, a tax attorney can also help you factor that information into your return. Some deductions come with your employee stock options you may or may not be aware of. 

    Taxes Are Complicated

    Let’s be honest; filing your taxes can become complicated and confusing fast unless you have a straightforward tax return. In addition to running a business, other situations can further complicate your tax liability. 

    Other factors to take into consideration:

    • Marriage
    • Rental Properties
    • Buying a house
    • Having children
    • Foreign earned income

    Again, TurboTax can analyze these significant changes and how they affect your taxes, but it won’t correct you if you input something wrong. The ownness of ensuring your return is accurate falls upon you. Not only will a tax professional help you sort through these changes and how they affect your tax liability, but they can also help you plan for the future. 

    You Don’t Have Time

    Even if you have a simple tax return, it can take time to get through the entire process. Although TurboTax does help speed up the process a bit, you still have to dedicate time to sitting and inputting your information. Even if you can pull data from the previous year, you still have to sit there and verify that everything checks out. 

    Preparing taxes is second nature for your tax attorney. They understand the complicated tax laws and how to prepare appropriately and file your return on your behalf. 

    Why Silver Tax Group’s Audit Defense Outshines TurboTax

    When it comes to safeguarding your tax filings against IRS audits, the choice between TurboTax and Silver Tax Group is critical. Here’s an in-depth look at why Silver Tax Group’s Audit Defense service is a superior option:

    Unmatched Expertise of Tax Attorneys

    Silver Tax Group’s team comprises seasoned tax attorneys, offering a level of expertise far beyond what TurboTax’s general tax professionals can provide. These attorneys don’t just understand tax law; they live and breathe it, ensuring that your audit defense strategy is not only robust but also tailored to your specific tax situation.

    Legal Representation in IRS Proceedings

    One of the most significant advantages of Silver Tax Group is its ability to offer full legal representation in front of the IRS. This is a game-changer, especially when compared to TurboTax. Whether it’s negotiating with the IRS or representing you in tax court, Silver Tax Group has the legal prowess to handle it all.

    Proactive and Preventive Strategies

    Silver Tax Group doesn’t just react when an audit notice arrives; they work with you throughout the year to minimize the risk of an audit. This proactive approach includes reviewing your tax filings for potential red flags and ensuring compliance, thus reducing the likelihood of facing an audit in the first place.

    Tailored Solutions for Complex Tax Issues

    For those with intricate tax situations – like business owners, investors, or individuals with foreign income – Silver Tax Group’s nuanced understanding of complex tax laws is invaluable. TurboTax might be suitable for straightforward returns, but it often falls short in addressing the complexities that come with varied income sources and investments.

    Direct Communication with Tax Experts

    With Silver Tax Group, you’re not just a number in a system; you have direct access to tax attorneys. This means any query or concern you have is addressed by an expert equipped to provide detailed, specific advice – a level of personalized service that TurboTax’s automated platform cannot match.

    While TurboTax Audit Defense might suffice for simple tax returns, Silver Tax Group’s Audit Defense service stands out for its comprehensive, attorney-driven approach. Expertise in handling complex tax situations, combined with a proactive strategy and personalized legal representation, makes Silver Tax Group the go-to choice for anyone seeking thorough protection against IRS audits.

    File Your Tax Returns With Peace-of-Mind

    TurboTax is a household tax-preparing software that works best for those who have simple returns and minimal deductions.

    At the end of the day, whether or not TurboTax Audit Defense is worth the cost is up to you. If you have a simple tax return and are not concerned about being audited, then there’s no need to purchase the service.

    However, if you have a complex tax situation or believe that your return may be selected for audit, then TurboTax Audit Defense could save you a lot of time and stress—and may even help you avoid paying additional taxes and penalties.

    It has some benefits, but several limitations could render your purchase useless. Unless you plan on only claiming the standard deductions and you have a W2 from an employer, you may want to reach out to an experienced tax attorney for more information.

    Contact Silver Tax Group if you need help with an audit or preparing your returns to ensure they don’t get audited. Our experienced tax attorneys have years of experience handling audits and other IRS issues.

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