TurboTax Audit Defense is part of the MAX services, which cost $60 on top of your tax preparation fees. It’s important to note that this service is a flat $60, whether you file a basic or a more complicated return. The good news is that most tax software and even paid tax preparation come with audit defense. It’s the company’s way of assuring you that if a number gets transposed or your taxes get audited, you’ve got a resource you can rely on. In the most common federal audits, taxpayers receive notices from the IRS asking about certain details of their returns and requesting further information or clarification. This is known as a “correspondence audit,” and even those are considered as rare as being struck by lightning.
Help and support
All scheduling of appointments, telephone calls and correspondence will be handled by the assigned Audit Representative(s). We will meet or correspond with the auditor on your behalf and will defend you through the highest level of appeals, subject to the terms herein. Though hiring a tax attorney may be more costly upfront, it’s often worth the investment for those with complex tax needs.
What to Look For in a Tax Attorney
The TurboTax MAX package includes audit defense, identity theft monitoring, restoration support, and loss insurance. If the IRS selects your return for an audit, a TurboTax representative will guide you through the process and help you respond to IRS requests. However, experiences with TurboTax’s audit support vary widely, as the service provides only limited audit representation. Each version offers varying levels of customer support, such as phone consultations with TurboTax experts and, in some versions, live chat support. However, even with these features, TurboTax’s assistance stops short of the personalized, in-depth service provided by licensed tax attorneys or CPAs.
Unusual or unrealistic itemized deductions, either for individuals or small business owners, may raise a red flag for auditors. For example, claiming a charitable tax deduction for 40% of your total income could raise some eyebrows at the IRS. You’re more likely to be audited if you make more than $1 million a year or you’re in a very low income tax bracket. Both categories historically are fertile grounds for fraud and – because of the greater complexity – mistakes in data entry.
Choosing the Right Tax Representation for Your Needs
In addition, TurboTax Audit Defense includes identity theft protection, loss insurance, and restoration assistance. These services typically come at an extra cost if you were to purchase them through another source. While many people choose to do their taxes themselves, wading through instructional forms and documents can be a hassle.
TurboTax Online: Important Details about Filing Simple Form 1040 Returns
The coverage includes any audit that might occur during the time of your MAX membership (which lasts a year)—an audit representative will take care of all appointment scheduling, phone calls, and correspondence. The TurboTax Audit Support Guarantee also includes the option to connect with an experienced tax professional for free one-on-one audit guidance. However, we hope this review has calmed your fears about both audits and paying for TurboTax’s Audit Defense service. In some cases, Audit Defense might not be necessary or worth the additional cost, especially if you’re honest and certain your tax return is accurate. We’re no legal experts by any means but if you’re concerned about an audit, choosing a professional with whom you work well can be a better alternative than paying $60 for TurboTax’s Audit Defense. Licensed tax attorneys make a living from helping consumers like you and me so they have a bit more skin in the game when it comes to advising and defending clients.
You’ll have the aforementioned full representation by a licensed tax professional during all interactions with the IRS. To determine if you purchased Audit Defense, sign in to your TurboTax account, select the tax year under Your tax returns & documents, and select View order details. If you have PLUS, Max Benefits, or Premium Services listed, then you purchased Audit Defense. For those who want even more protection, TurboTax offers Audit Defense, which provides full representation in the event of an audit, for an additional fee. We hope we’ve also shown you that tax preparation doesn’t have to be a hassle.
Confidently handle an audit by the IRS with a representative who will represent you and communicate with the IRS on your behalf. Provide in turbotax audit protection a timely manner the information and documentation necessary to substantiate the various items of income and expense in question so that your Audit Representative(s) can prepare your defense. Provide your signature(s) on the required IRS or State Power of Attorney and return to the Audit Representative(s) in a timely manner.
The IRS has some resources to search for and understand your notice, along with information to set up a payment plan. If you’re ever assessed an IRS or state penalty or interest due to a TurboTax calculation error, we’ll pay you the penalty and interest. In practice, this means communicating and negotiating with the IRS on your behalf. You still retain the right to have the final say, but TurboTax’s experts will do the leg work for you.
Plans and Pricing
That’s why it’s important to file your taxes accurately, whether you do it yourself or find a software or company that will guide you. A few minor errors could trigger an audit, but most of us are worried about the worst-case scenario happening to us. We’ll ask you simple questions about your tax situation and search over 350 tax deductions and credits to help you make sure you get all the tax breaks you deserve.
- For instance, TurboTax may not catch every possible deduction for those in unique industries or those with specific investment strategies.
- More complicated returns require priced plans, especially if you have to append several additional forms, called “Schedules,” to your return.
- Unlike TurboTax Audit Defense, Dimov provides in-depth audit representation, giving clients confidence and the assurance that they have a knowledgeable advocate.
- Both federal and state taxes are free to file so you will only have to pay if you owe the IRS or your state.
The biggest difference between the free service and Audit Defense is having someone to represent you in dealing with the IRS. But given that’s where TurboTax’s defense ends, you might be better off dealing with an unlikely audit with a tax attorney—if that time ever comes. Your profession and financial situation will play a key role in your odds of being audited. If you’re working at a hospital or within a practice that someone else owns and are earning a standard salary, spending that extra $59 might not be worth it. As a physician, a couple of those audit red flags might apply to you—particularly the sole proprietorship and being a high earner.
Is TurboTax MAX and Audit Defense Worth It?
No matter where you fall in the spectrum, an audit can be a scary thing, especially given the ramifications. The word “audit” fosters trepidation in many people, but in reality the deep-tissue audits people tend to envision are fairly rare. According to the IRS, of the nearly 154 million individual returns filed for calendar year 2017, about 1 million were audited.
With so many free and affordable tax software programs out there, it’s easier to find one that suits your needs. Opt to e-file your tax return to minimize errors and reduce the chances of an audit. The IRS reports that only 0.5 percent of e-returns contain errors, compared to 21% of paper returns.
Whether you’ve filed taxes yet or not, knowing about TurboTax’s Audit Defense can help you stay better informed for the future. Next time tax season comes around, you might find yourself in a different position with your newfound knowledge. Contrasting the benefits and the costs of TurboTax Audit Defense can help you determine if this service is worth the cost. No matter which plan you choose, TurboTax offers free phone support to help you through the process. However, the Premier plan is the only one that gives you access to live chat support. Research shows that those fears may be unfounded, especially given how many millionaires were audited back in 2022 (for 2021’s taxes).
More complicated returns require priced plans, especially if you have to append several additional forms, called “Schedules,” to your return. Instances where you might need to do this include getting married, having kids, buying a house, purchasing or earning income from a rental property, as well as foreign earned income. Our guide includes everything you need to know about TurboTax’s Audit Defense, including what it covers and how much it costs.
- Dimov’s tax professionals offer the depth and expertise necessary to navigate the intricacies of tax law, safeguard against audits, and maximize your financial outcome.
- We hope we’ve also shown you that tax preparation doesn’t have to be a hassle.
- Several other tax preparation software programs exist, including H&R Block, FreeTaxUSA, and TaxSlayer.
- This is known as a “correspondence audit,” and even those are considered as rare as being struck by lightning.
Paying a software program or even a tax preparation specialist to take care of it all can be well worth the price. If your return is simply entering a W-2 and calling it a day, you might qualify for the TurboTax Free Edition. Both federal and state taxes are free to file so you will only have to pay if you owe the IRS or your state. For most Americans, tax time either means paying the Internal Revenue Service (IRS) big money or getting a refund in the mail.