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We have investments, mortgage and our income, I've used TurboTax for the past 5 years and never had any problems, now that we're married, I want to continue to use turbotax buy my wife thinks an accountant will find deductions that turbotax can't do. What do you think?

2007-02-01 01:17:02 · 19 answers · asked by Michael S 1 in Business & Finance Taxes United States

19 answers

Your accountant is not paid to find deductions, but to complete your form. If you tell your accountant what deductions you want, he will put them in - regardless of legality. And when you get audited, he will be there to hold your hand as you are escorted to jail.

Turbotax, on the other hand, is conservative. It will not allow you deductions you are sometimes entitled to unless you tell it to do so.

Bottom line: An accountant is worth the money if he will give you an honest answer. But, do not count on him to do the right thing for you (I say this as I had a brother that would write down the numbers on the back of envelopes for his business records. The CPA would then record the numbers on the back of the envelope and send them to the IRS. Unfortunately, my brother could not add and it ultimately cost him BIG BUCKS. The CPA, though stupid for not opening the envelopes, for not checking the math, had no liability and got a pass). When it was said and done, my brother only escaped prison by the skin of his teeth.

2007-02-01 01:29:23 · answer #1 · answered by Christmas Light Guy 7 · 0 0

TurboTax is not better than a CPA. Still, if you have a relatively simple return, TurboTax might work out fine for you.

Let me admit my bias right up front: I am a CPA. And, I can honestly say that I regularly see tax returns prepared by people using preparation software that were not prepared to their best advantage and/or were prepared incorrectly. The same applies to the national tax preparation chains.

Someone else commented that a CPA will just take whatever deductions you tell them to, legal or not. I don't know a CPA like that, though I am sure they are out there. A good CPA will not only not take illegal deductions, they will help you find legal deductions. Better yet, you can consult with your CPA before you enter into transactions to make sure you are maximizing tax benefits/minimizing tax costs. Of course, if your tax situation is very basic, there may not be any additional deductions to find--in which case the use of a CPA might not be justified.

A bit of a rant:

There is a posting claiming that CPAs do not keep up on tax law changes. The number of continuing education classes I attend, periodicals I subscribe to, and resource materials I purchase would indicate otherwise.

There is also a posting from another professional indicating that CPAs are not necessary. It depends what one means. For example, a person can purchase personal finance books and read publications and, with some effort, do their own financial planning, as well. With time and effort, it is probably possible to do a good job. It is likely that a professional would do a better job--and the professional is warranted if the person's situation justifies it or is simply not interested in doing it himself. The same thing applies to using a CPA for your taxes. (Disclosure again: In addition to being a CPA, I am also a CFP.)

Back to you and your wife: why don't you use a CPA this year AND purchase Turbo Tax? Be honest--prepare your return with Turbo Tax first, without seeing what the CPA does, and then do NOT give a copy of your prepared return to the CPA. When you get the return back from the CPA, compare the two. If there are any differences, ask the CPA to explain them.

You will then know which method of preparation you would like to use in the future.

2007-02-01 03:29:18 · answer #2 · answered by Take Responsibility 2 · 1 0

Being a financial planner, I associate with a lot of CPAs, and I have the same feeling (of course, they often disagree). Tax software is pretty much infallible as long as all of the information is entered correctly. TurboTax or TaxCut are machines that attempt to apply every rule to every scenario until they uncover every potential deduction or solution. They don't have the potential to "overlook" something. The only way they can make a mistake is for there to be an omission in the program. I don't think this is likely.

The one thing the programs can't do is represent you in an audit, but you can hire a CPA or an attorney if that becomes necessary.

Finally, I don't see a significant difference between the programs, but TaxCut is cheaper.

2007-02-01 01:30:08 · answer #3 · answered by Rob D 5 · 0 0

A really good accountant will, on balance over many returns, outperform TurboTax. On the other hand, TurboTax will cost you $20. The accountant? You'll have to assess the return on that investment. In general, tax prep programs do a wonderful job. What they don't do is ask you a lot of really probing questions that might allow an accountant to unearth something you didn't know about. But, frankly, if your economic activities are limited to a salary, interest and dividends and owning a residence, that's not all that likely.

2007-02-01 01:24:38 · answer #4 · answered by SDD 7 · 0 0

TurboTax is only as good as the person putting in the information. A CPA would probably advise you of a better plan to save taxes on your investments and mortgage interest. I am pretty sure you would be able to write the CPA expense off your mortage income. At least you can in Canada.

2007-02-01 01:23:00 · answer #5 · answered by Anonymous · 0 0

As long as you are knowledgeable about the rules for your investments, TurboTax probably works as well, and would be cheaper than a CPA. It doesn't sound like you have a very complex return.

To keep the peace, if she really insists, I'd do it both ways for this year and see how it comes out. One of you will learn something. And the cost won't be all that much.

2007-02-01 03:23:23 · answer #6 · answered by Judy 7 · 0 0

No. She was used to the idea of an accountant so that is all she knows. She has probably never seen what a tax program like Turbo Tax does and has never been through the questions that ask you all the things pertaining to all available deductions and latest tax law changes. The program is made by people who do nothing but keep track of changes in the tax law, whereas accountants have to keep up with their clients primarily and tax law changes secondarily. There is nothing an accountant can do that Turbo Tax can't do at a far cheaper price. Plus you can fiddle with your tax in formation in spurts and fits day or night, and not have to make several time-consuming trips to the accountant.

Is your wife a blonde? Might explain it.

2007-02-01 01:23:41 · answer #7 · answered by Kokopelli 7 · 0 0

I agree with your wife. If you have a particular question, you can't really ask it to a box. Additionally there are so many laws that can apply if...a, b and c are true that the box can't figure out. And it won't go with you to an audit and defend you on points of the law that were used or not used as the case may be. Also, the cpa's fee is tax deductible.

2007-02-01 01:25:33 · answer #8 · answered by J Somethingorother 6 · 0 0

Your wife may be right.

The IRS loves Turbo Tax. The program is very conservative when it comes to deductions and can't make judgement calls that could save you money. And make sure you get your Federal Excise tax credit! It is a one shot deal if you had a phone of any kind from 2003 to 2006, make sure you don't forget that one.

If I were in your shoes I would take the taxes to a CPA, and then do them yourself on TT. Compare them side by side and see the results for yourself. Then you and your wife can decide which is better for your situation.

Have fun!

2007-02-01 01:22:37 · answer #9 · answered by Gem 7 · 2 0

If you feel comfortable doing your return w/ turbo, good for you. People do theirs through Turbo, and later get audited. They go to a CPA, they mess up too. Don't get me wrong, there are some good CPA's out there, but they do all kinds of stuff. I think you should find a place that specializes in one field (like Jackson Hewitt or H&R Block) and go to them. Again, not that the other people aren't good, but that is what they specialize in. Also--Make sure you go to an experienced preparer, not a new one. Office managers are usually the most experienced in the office.

2007-02-01 03:15:28 · answer #10 · answered by Anonymous · 0 1

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