TurbaTax is offering me Tax Audit protection for $49.95. If my tax return is randomly selected for audit they will represent me.
Is this service worth the money?
It depends on how complex your return is.
If the only reason you are not using the 1040EZ is because you are over the $ limits, you probably don't need the audit insurance.
Look at the sources of your income. A W-2 per person, some 1099's from your bank, and you take the standard deduction because you rent, you probably don't need it.
If you are a day trader, and you claim to have a home office, and your return runs dozens of pages, it might not be a bad deal.
I agree with mhoran_psprep's answer, but would like to add a few additional points to consider.
TurboTax and the professional it will send to represent you in case of a tax audit have no more information about your tax return than what you entered into the program. Now, there are three (or four) different kinds of audits.
So, pay the fee for peace of mind if you like, and as insurance as littleadv suggests. But be sure you understand what you might be getting for the money. Most tax returns selected for audit are selected for what the IRS believes are good reasons, not at random. If what you said
is interpreted literally, TurboTax will represent you only if your return is selected for examination under the TCMP program, not if it is selected for audit because the IRS believes that something is fishy about your return. And as always, you get what you pay for.
I think it is, unless you have another protection. For example, I have a legal plan sponsored by my employer that amongst other things, covers representation in case of audits for personal taxes.
If, however, you don't have any other legal plan to cover this, I'd suggest getting the TurboTax audit protection. Hiring a professional to represent you in case of an audit will cost several hundreds of dollars per hour. Of course chances are slim, but that's the nature of insurance.
Thank you for your interest in this question.
Because it has attracted low-quality or spam answers that had to be removed, posting an answer now requires 10 reputation on this site (the association bonus does not count).
Would you like to answer one of these unanswered questions instead?