Right now, we do our taxes with TurboTax. My husband actually does it. It doesn't seem that hard or that big a deal. He claims not to mind doing it.
However, we've had some tax issues recently due to my extracurricular activities. That is, I moonlight at a place that doesn't remove taxes when they pay me. And also, last year I earned close to $20,000 from book sales from Amazon. So between those two extra incomes, we ended up owing a lot of money and I think even had to pay a penalty. We donated quite a bit to charity, but it didn't really balance things out.
A friend of mine was telling me that having a tax guy would help us find more deductions, and ultimately, we would end up saving money. My husband says that's bullshit. That all they really do is plug the data into TurboTax.
What do you think? Should we pay for a tax guy?
pay for CPA so worth it! don't use a tax preparer (H and R block) it's not the same. get a real CPA. a doctor income needs it (especially if you keep writing and earning money doing it)ReplyDelete
A GOOD tax guy (CPA with excellent reputation, NOT some jomoke from H&R Block like Amy said) is worth his weight in gold. I'd be in jail or living under a bridge now if it weren't for mine.ReplyDelete
"Don't go see a doctor, all they do is plug your symptoms into Google"ReplyDelete
I was actually going to reply, a CPA is to Turbo Tax like a Doctor is to WebMD. High five Michael!Delete
When you have meaningful "self-employment" tax or partnership income, you're stuck - you have to get professional help. The costs of getting that wrong and potentially getting audited way outweigh the accountant fees.ReplyDelete
Turbo Tax is good, but not the same as a good CPA.ReplyDelete
I'll agree with your husband if he's thinking of H&R Block (as others have said). They mostly just plug stuff into their own program and it spits out an answer.ReplyDelete
But for things that aren't cookie cutter (and your situation sounds like that), find someone that does that kind of stuff for a living, like a CPA. I've had a couple times when my taxes were difficult (extended international work, compensatory travel domestically, etc) and having someone prepare my taxes that was versed in that area was crucial.
I use a professional tax preparer and have for many years. Because I work as a contractor, my taxes are quite complex, what with per diem and so forth as I am on the road working at clients. Several years back, a friend of ours working at H&R Block told us that she could do the job for us. We let her try, and found that according to her numbers, we owed @5000 state and federal taxes. Our CPA did it, and we were owed about 1800. As Mr. Felts and others said above, it is worth the money to pay a full time tax pro. And I don't think there is that much difference in price. Last year I had income from 3 states, some investment stuff, and the total was under $300.ReplyDelete
Our original one died, but the institutional knowledge remained, and even though we have not lived in that state since 2009 we still feel that the firm does what we need. I don't know if they use Turbo Tax, but we always get the deductions for professional reading, housing that are permitted. We've been questioned a few times by the IRS or the states, but we have never had to pay more.
I think you just have to remember to pay estimated taxes quarterly on what you make moonlighting and via book sales. Not rocket science, but annoying if you don't have much time. I refuse to pay to have my taxes done for me though, and have been doing my own for over 15y, so maybe I just have a high threshold for pain. 😛ReplyDelete
Agreed that a CPA is worth it's weight in gold. (Pediatrician momma and work-from-home dad)ReplyDelete
Also- you can do a trial one year and have both your hubs and CPA do them and see what it figures out and if you could be saving $Delete
This is what I was going to suggest. I used a CPA one year just to make sure I was doing everything correctly for my small business (schedule C).Delete
Found out Turbo Tax and I were doing just fine and so I continued doing my own taxes ever since.
What someone said above is correct. For any non w2 income you need to make quarterly estimated tax payments. Start with 25% for Fed and adjust from there as needed. The percent question would be something you could ask your cpa the one year he does your taxes.
Now if only someone could make a less annoying tax prep software.
I'm ditto for the AftenMd and Anon. I was going to say the same thing: try it and see what happens. Then you can pick up on it and see if that is worth it. You can check what deductions are done next year, and then have them do it, and see what you get between the two.Delete
My husband is an accountant, but we still pay a CPA to do our taxes. When you have complicated stuff, there are ways that a tax expert can save you enough money that it covers their fee.ReplyDelete
I like Ameriprise.ReplyDelete
Our life is simple and my wife is a bookkeeper so we can get by with Turbo Tax. When we had income properties and more complicated sources of income we used a CPA. You might be wise to do so.ReplyDelete
OK, you guys have convinced us...ReplyDelete