How Best to File Your Tax Return

Every now and then I hear the question:  how best to file one’s tax return? I hear this often uttered with the enthusiasm of someone facing a root canal. For most of us, unpleasant as it may be, is a necessary task.

There are various options, each with advantages and drawbacks. I think the choices (and cost) depend on the simplicity of your tax situation.  Before I go further, I will tell you outright: most underestimate the complexity of their tax situation. Among my readers, folks that live, work and play in Mexico, I can see more complex tax scenarios.  International taxpayers in general, just have more to mind when it comes to federal and state taxes.

Do it yourself tax software:  Allows you to e-file, knowing when returns have been accepted. Software is also good at cutting keystrokes, reducing math errors. What I find tedious of consumer software: Questionnaires seem endless because they have to cover every possibility. Sometimes I’ve misunderstood what a question really asks for– and my answer has led to error. I know what to look for as I review and detect the ‘error’, but I suspect many can’t. Bottom line: you may catch some but not all mistakes.  Lastly: there are free file IRS approved programs for folks that meet certain income parameters.

Do it yourself paper file:  How much time do you have? There’s a lot of reading to do, most of which may not be relevant to you. The catch: you don’t really know if it’s relevant until you’ve read it. Definitely harder than the NYT crossword puzzle.

Tax Preparers:  They take most of the sting away, but not all.  You still need to provide information and answer questions. The true issue: is your preparer trained and up to date on the latest changes? Not all have equal levels of training or competency in all areas of tax. Inquire about professional credentials and up to date training. ‘Unenrolled’ preparers, lowest on the totem pole, are not bound by federal ethics rules and some may not be able to represent you before the IRS. CPAs, Enrolled Agents and Attorneys have unlimited representation privileges, comply with educational requirements and observe ethical obligations.  Technology allows you to work effortlessly with preparers independent of location, that’s a plus.  You get more choices in providers.

So many choices!  Surely, there’s one for you!

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Orlando Gotay
Lawyer
Orlando Gotay is a California licensed tax attorney (with a Master of Laws in Taxation) admitted to practice before the IRS, the U.S. Tax Court and other taxing agencies.
His love of things Mexican has led him to devote part of his practice to the tax matters of U.S. expats in Mexico. He can be reached at tax@orlandogotay.com, online radio at mixlr.com/orlandogotay

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