Tax professionals report recurring questions about software accuracy, data security, and compliance with recent IRS updates, highlighting user concerns amid evolving tax code changes. The trend underscores rising reliance on digital tools for personal tax preparation.
- 22% year-over-year increase in identity theft cases affecting tax data
- 3.1 million IRS returns flagged in 2025 due to reporting discrepancies
- S&P 500 closed above 5,200 in early 2026, driving capital gains reporting concerns
- Form 1099-NEC now requires reporting of payments over $600 to independent contractors
- Tax preparer visits rose 18% in Q1 2026 compared to Q1 2025
- Intuit and TaxAct have released updates to address compliance and security concerns
Tax experts across the U.S. are consistently fielding three primary questions from individuals using tax preparation software, reflecting growing anxiety over accuracy, privacy, and regulatory adherence. The most frequent inquiry involves the reliability of automated calculations, particularly in complex scenarios such as capital gains from stock trades or crypto transactions. With the S&P 500 closing above 5,200 in early 2026, increased investment activity has amplified concerns about correct reporting of gains and losses, especially for users leveraging platforms like TurboTax or H&R Block’s digital tools. Another top concern centers on data security, especially after recent cyber incidents affecting major financial platforms. Users are asking how software providers safeguard sensitive information, particularly when integrating with brokerage accounts. The surge in identity theft cases—up 22% year-over-year—has heightened scrutiny on third-party data access and encryption standards used by tax software vendors. Finally, questions frequently arise about compliance with the IRS’s updated Form 1099-NEC reporting requirements, which now mandate disclosure of payments exceeding $600 to independent contractors. This change has particularly impacted freelancers and gig economy workers, many of whom are using software to track income from multiple platforms. Failure to report such income correctly can trigger audit flags, with the IRS’s automated systems flagging 3.1 million returns in 2025 due to discrepancies. The convergence of higher investment activity, stricter reporting rules, and digital security risks is driving demand for more transparent and robust tax software. While companies like Intuit and TaxAct continue to update their platforms, users remain cautious. The increasing complexity is also prompting some to seek professional help, with tax preparer visits rising 18% in Q1 2026 compared to the same period last year.