Editor’s note: “Tax tips” returns and will appear bi-weekly throughout tax season. Stephen T. Peppler, E.A., C.F.P., has graciously agreed to provide the tax information to our readers.

This time of year we begin to get our records together and make plans for filing our taxes. Whether to complete them on your own or seek the services of a professional is an important decision.

Today, there are several tax software programs available to the individual costing from $50 to $100.

The programs have been found to do a good job of doing the arithmetic on the return. However, a recent study done on several of the programs found that over half the individuals using them had errors (some serious) on their returns. The reason for this is that our tax code is so complex that it is impossible for a program to analyze your situation and “ask” all the right questions.

Tax programs always have some bugs in them, especially after major changes in the tax law such as we’ve had this year. These problems are fixed quickly on the professional programs since you have thousands of preparers doing millions of returns and reviewing the results for any errors.

With personal programs the process of finding and correcting errors can be more extended. It is not unusual for taxpayers to file their returns before finding out that the program had a bug (if they ever find out at all).

Entering data at seemingly appropriate places does not guarantee the program will handle it properly and give you the desired results. Employee and business expenses can often be entered in more than one place. You will want to check the computer calculations if preparing your own return.

Taxpayers with more complex returns or those with questions regarding the changed tax laws should seek the assistance of a professional to make sure they do not miss deductions and to prevent mistakes that could trigger an audit.

If you own a business or rental you will want help in complying with the complex tax laws. You need to be sure you do not lose the many tax benefits available to you.

Depreciation of business or rental assets is one area that is seldom done properly without the assistance of a professional. Employee business expenses, a frequent audit target, are subject to an array of confusing regulations that are constantly being revised or reinterpreted.

Other areas where professional tax help can eliminate frequent errors are the sale of homes, property, securities or mutual funds, divorce and situations involving inherited property.

A potential danger area most taxpayers are not even aware of is the dreaded Alternative Minimum Tax (AMT), a high percentage flat tax that involves recalculating your tax based on a whole different set of rules. Income is calculated differently based on less favorable regulations and many deductions such as medical expenses, property and state taxes and employee business expenses are lost.

Taxpayers who potentially qualify for the earned income credit will want to review the extensive rules or hire a professional.

Many taxpayers must make timely “elections” on their current return in order to receive tax benefits in the future. These elections (choices) should be properly taken by a professional.

Many people seeking professional help rely on an Enrolled Agent (EA) or CPA. Both must pass difficult two-day exams and have stringent continuing education requirements that must be met each year.

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