CPA or TurboTax

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AgentHoopla
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CPA or TurboTax

Post by AgentHoopla » Thu Apr 20, 2017 4:17 pm

Hello All,

I have been using turbo tax for many years, and never really understood the value of having a CPA handle my taxes unless I owned a business or have a very difficult tax situation.

Im 27, work at a company and dont own a business, never used a CPA.

What are your thoughts? Do you use a CPA? whats your opinion?

carolinaman
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Re: CPA or TurboTax

Post by carolinaman » Thu Apr 20, 2017 4:28 pm

It sounds like TT is fine for you. You say you have been using it, so unless you now have some unusual complicated tax situation, I think you are fine with TT.

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flamesabers
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Re: CPA or TurboTax

Post by flamesabers » Thu Apr 20, 2017 4:30 pm

carolinaman wrote:It sounds like TT is fine for you. You say you have been using it, so unless you now have some unusual complicated tax situation, I think you are fine with TT.


I also agree with using Turbo Tax. Since your taxes aren't overtly complex, I don't think there is any reason to pay hefty fees for a CPA to do your taxes. Tax software should be more then adequate for you.

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unclescrooge
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Re: CPA or TurboTax

Post by unclescrooge » Thu Apr 20, 2017 4:39 pm

I've been using TT since 2000 (1999 taxes).

Between then and now, I've had w2 income, 1099 income from consulting jobs, k-1 income from an S-corp, 18 rental properties, tons of capital gains/losses, carryforward NOLS, and even a 1099-c resulting from a short sale.

TT is a bit a confusing sometimes, but you can call up their help desk and talk to a tax expert.

Last Sunday (2 days before the deadline), my wait time was 18 minutes. I had a question about deducting mortgage interest on a second home - it was complex because I hit the mortgage limits....I was very happy with the results.

One year, in 2007, I hired a CPA to check my taxes and make sure I wasn't making any mistakes.

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lthenderson
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Re: CPA or TurboTax

Post by lthenderson » Thu Apr 20, 2017 4:57 pm

I used to do all my taxes by hand and then got lazy and went to a CPA. I loved that they could do it in about 40 minutes what took me several evenings to do. However the cost kept going up and up and eventually it hit me that they were just entering my information into a computerized form just like TT. I bought Turbo Tax and the first year, spent an afternoon doing my taxes. Every year since it takes about 40 minutes just like at the CPA office with the big exception that the cost associated is a tiny fraction of what I was paying the CPA. Unless my tax situation changes in the future, I don't foresee that I will ever go back to using a CPA or doing it by hand.

Spirit Rider
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Re: CPA or TurboTax

Post by Spirit Rider » Thu Apr 20, 2017 5:21 pm

Tax filing is relatively straightforward for most people and they really don't get much benefit from a CPA.

You don't know what you don't know. You could be leaving money on the table. However, this seldom is a reason for a CPA to do your taxes, they are slammed at tax time and have very little time for one on one.

What is a good idea is to pay a financial planner or CPA (in July), definitely not an insurance agent to do a financial/tax planning review. This may cost you some money, but maybe they can suggest some things you were not aware of. NOTE: I am not talking about anybody selling you things. The only thing you should be getting from this review is what to do, not how and who with to do it.

You really only need to do this with major changes in your life, marriage, children, significant change in income, etc...

Even though it may go across the general BH grain, sometimes it is worthwhile to pay a professional for a few hours time.

michaeljc70
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Re: CPA or TurboTax

Post by michaeljc70 » Thu Apr 20, 2017 6:15 pm

I used TT even when I owned a business. I do have a background in accounting. I think the important thing is you understand the key tax savers like Solo 401k, IRAs, key tax credits (child care),etc. My business was professional services, so there is no inventory or a lot of complicated accounting. You will get differing views on BH. The thing I find interesting, is it is very similar to investing. Of course you can hire a professional. Or you can educate yourself like many BH do with investing. The tax code is very complicated and just as I wouldn't advocate writing covered calls based on reading a Wiki or forum, I wouldn't advocate doing very complicated taxes using a piece of software or using online wikis.

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Ged
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Re: CPA or TurboTax

Post by Ged » Thu Apr 20, 2017 7:24 pm

I think there is an advantage to doing your own taxes in that the understanding of the process adds insight into the effects of your decisions on the amounts of taxes you pay.

Nova1967
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Re: CPA or TurboTax

Post by Nova1967 » Fri Apr 21, 2017 7:48 am

I prefer Turbo tax, I go to a CPA is I get a letter from the IRS and need to correct a discrepancies

rantk81
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Re: CPA or TurboTax

Post by rantk81 » Fri Apr 21, 2017 7:52 am

Ged wrote:I think there is an advantage to doing your own taxes in that the understanding of the process adds insight into the effects of your decisions on the amounts of taxes you pay.


I agree 100%. The time I have spent doing my taxes has resulted in a much better understanding in areas of the tax-code. This ultimately gives me the knowledge to lower my tax burden in future tax years.

Dottie57
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Re: CPA or TurboTax

Post by Dottie57 » Fri Apr 21, 2017 8:00 am

rantk81 wrote:
Ged wrote:I think there is an advantage to doing your own taxes in that the understanding of the process adds insight into the effects of your decisions on the amounts of taxes you pay.


I agree 100%. The time I have spent doing my taxes has resulted in a much better understanding in areas of the tax-code. This ultimately gives me the knowledge to lower my tax burden in future tax years.



Since I am 3-5 years out from retirement, I expect I will start doing at leadt some pre-work by hand. Doing my own taxes and then in Turbo tax. I want to know more about how to reduce my taxes in retirement.

J295
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Re: CPA or TurboTax

Post by J295 » Fri Apr 21, 2017 8:05 am

I think you using TT makes sense now.

We had an accountant for years when I was a full time partner in a business. It was a great decision and worth every penny to offload the work to him, but honestly it still took a lot of my time because I needed to provide detailed information to him (but it was worth it for him to use his system to generate the forms and also to advise us from time to time on issues that required analysis).

Now, we have some modest business interests but are mostly retired so I've been using TT for a few years. It's actually fun to work the process, since I have the time and things aren't too complicated (at least on the input side ... the paper/forms generated are still quite complicated, but that's what TT provides!)

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DaftInvestor
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Re: CPA or TurboTax

Post by DaftInvestor » Fri Apr 21, 2017 8:08 am

In addition to using TurboTax you should do some reading and understanding of basic tax law and deductions - and perhaps you already are. If you use the TurboTax in question-mode and are asked a question - you need to read the question carefully and understand why you are being asked the question. Provided you are doing this you probably don't need a CPA. If you have special circumstances (Stock-options at work ,etc.) you can investigate those as they come. I know people that say they have gotten help and advise, while others say they simply act as prepares (take what they give you and type them into their program), while others have related that their CPAs or tax-preparers have actually missed things or done their taxes wrong.
I've always been a do-it-yourself with TurboTax - sounds like you are find doing the same.

afan
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Re: CPA or TurboTax

Post by afan » Fri Apr 21, 2017 8:48 am

Hiring a paid preparer is worth it if your taxes are complicated enough that you cannot, or do not want to, do them yourself. If you charge a higher hourly rate than your preparer it could pay to have them do your taxes while you earn money.

If you want a paid preparer, an enrolled.agent is usually cheaper. If you really have something.they could not handle then the right CPA could be worth it. Note that taxes are all EAs do while CPAs do a lot of things and may devote little time to taxes.

If all you have is W2 and 1099 income and a few common deductions then you are not missing anything. There is nothing else the world's greatest tax preparer could do for you except save the time and hassle of filling out the forms.
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Texanbybirth
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Re: CPA or TurboTax

Post by Texanbybirth » Fri Apr 21, 2017 8:53 am

I'm a CPA and it sounds like TurboTax is the choice for you.

dbr
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Re: CPA or TurboTax

Post by dbr » Fri Apr 21, 2017 9:02 am

A person can always use a CPA once to find out if one is missing something one should have known.

I agree most people don't have enough going on that the interview format in TT wouldn't catch everything.

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EATaxGuy
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Re: CPA or TurboTax

Post by EATaxGuy » Fri Apr 21, 2017 9:06 am

Lots of tax professionals offer a free review of a prior year return. Take one up on the offer. Have a pro review your tax return. If they find nothing then you know for sure TT is good enough for your needs.

Good Luck! :sharebeer
You may have been handed a cactus, but sitting on it is up to you.

ubermax
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Re: CPA or TurboTax

Post by ubermax » Fri Apr 21, 2017 10:37 am

EATaxGuy wrote:Lots of tax professionals offer a free review of a prior year return. Take one up on the offer. Have a pro review your tax return. If they find nothing then you know for sure TT is good enough for your needs.

Good Luck! :sharebeer


Good advice and ,as someone else noted, an Enrolled Agent(EA) might be as good a choice as a CPA ; when we first got married we hired a CPA and his work became a blueprint for the next several years ; now we're retired and have been using Turbo for several years .

I think it could be worthwhile to have a pro look things over and provide some tips but even with Turbo I feel it's important that the individual do some homework and understand the logic behind all the numbers that Turbo presents .

Good luck !!!!

inbox788
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Re: CPA or TurboTax

Post by inbox788 » Fri Apr 21, 2017 3:37 pm

I used to use TurboTax, but things got a little complicated so I got an accountant. It's probably not necessary now that I've gotten things under control and I'm actively trying to simplify things, but I like the 2nd pair of eyes. Still, I've caught more problems and errors myself, and there are some things I'm not sure he's doing correctly. They're small matters, but I've got a list of issues and corrections if there is ever an audit. I might go back to TurboTax, but not sure if the savings are worth any additional time right now, but if the fees ever go up, I'll give TT another try.

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