This tax season millions of Americans are relying on tax software to calculate and file their tax returns. However, the IRS is blaming problems with software for more than 600,000 delayed federal refunds, and Minnesota residents misfiled more than 10,000 state tax returns due to software issues.
Problems with Federal Refunds
Problems with Federal tax returns deal specifically with Form 8863, which is used to claim education tax deductions. The IRS changed the way it processes this form and those changes were not implemented into the software until February 22. The IRS did not specifically name the software company. However, H&R Block released a statement saying the problem is fixed and the company is working with the IRS to fix the incorrect forms that were submitted.
Problems with State Refunds
The Minnesota Department of Revenue warned state filers against using products that use Intuit, such as TurboTax. They did not list specific problems, but said more than 10,000 state returns have been filed incorrectly using this software package. TurboTax did release a statement saying the software glitches have been corrected for Minnesota residents.
Lessons to Remember
Tax software is very useful, inexpensive and convenient. However, whether you are preparing your personal taxes or filing for your business, software does not replace a professional who specializes in taxes and accounting. As was the case with the education credit confusion, the IRS has the authority to change processing requirements, often times with little warning. Unfortunately, problems with software do not usually appear until some people have already used it. They are the guinea pigs, so to speak. Each business and individual is unique. Having a proven professional review your taxes is both a protection and advantageous. Many times they find deductions you missed. Contact us for all your tax and accounting needs.
