Why eTaxCenter Asks So Many Questions

If you’ve been preparing your own taxes, you might find the questions we ask at eTaxCenter to be a little invasive. Trust me, it’s not that we want to pry into your personal life. The IRS requires that we do something called “due diligence”. That means, we have to ask you lots of questions.

What happens if we don’t ask those questions? Well, the IRS can hit us with a bunch of penalties. For 2016, the IRS has added due diligence requirements to issues we’ve never had to ask about before – and added additional penalties for not asking. What that means is that if we don’t ask you a bunch of questions, the IRS could potentially charge us over $1,500 in fines for preparing your tax return. (You read that right, one thousand, five hundred dollars per return!)

So, if we want to keep our prices competitive (and stay in business) we have to ask you questions!

Why don’t you see those questions when you do your own return? That’s because, the IRS assumes that you know those answers in your head! You don’t have to do due diligence on yourself. You would never get hit with a “due diligence” penalty – for preparing your own return. You could, instead, get hit with a fraud penalty if you lie on your return. Fraud penalties are pretty nasty; you really don’t want to lie on your tax return. Unfortunately, honest people sometimes make mistakes claiming tax credits. It’s not lying when you make an honest mistake, but the IRS doesn’t always see it that way.

At eTaxCenter, we ask a lot of questions – partly, so we avoid paying IRS penalties, but also, we do it to keep you out of trouble. For example, many people don’t know or understand the IRS rules about who counts as a member of your family or not. (IRS rules about who counts as family and what your real family counts as family are probably different. At eTaxCenter, we understand IRS family rules!)

So what kinds of questions can you expect us to ask? Obviously, there will be questions about your income and expenses. We’ll want to see your W2s, 1099s, and all of those documents that say “Important Tax Information Enclosed” on the envelope. Are you single or married? Do you own your own home or rent? And of course of the standard personal data that we need to file your return.

If you have children, we’re going to ask you where they live, how old they are, do you provide over half of their support, are they in college, and things like that. There’s a lot of fraud involving tax returns where children are claimed. If you’re claiming a child on your tax return, there will be lots of questions about them.

If you are self-employed, we’re going to ask you about your business income and expenses, your mileage log, do you have a home office, and questions like that.

And we’re going to ask everybody about health insurance. We hate asking you about your health insurance. We apologize in advance for asking you about your health insurance. But we’re asking you about it because we have to.

The good thing that comes out of asking all these questions, (besides keeping us from having to pay the IRS lots of money in due diligence penalties) is that we’ll be able to do a better job for you! Sometimes, our questions give us clues to things that you might be able to deduct that we wouldn’t have known had we not asked. And, our questions can also tell us when you can’t deduct something either. We want you to pay the least amount of tax – but we also don’t want you to get in trouble for claiming something you shouldn’t either.

So yes, we do ask a lot of questions. But we’ll do a better job for you when you answer them. Ready to get started? Click here!

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