Comments on: Outcome Of Hiring An Accountant To Do Our Taxes Vs Using Turbo Tax Or Tax Cut

By: Kwei Quartey

Kwei Quartey — Sun, 13 May 2012 00:38:28 +0000

I scan and categorize all my documents as well and email them to my CPA in separate PDFs headed, “Travel” “Donations” “Publicity expense” etc. Doing everything to completion usually takes me a solid three weekends and at least 2 weekdays in the month of February (I file very early). For the amount I pay my accountant I seem to do an awful lot of work getting things shipshape, but it’s always been that way! I know he’s honest, but sometimes paying him that $2000 a year seems staggering. He even once charged me for answering an email question that I thought was really quite simple.

By: Kwei Quartey

Kwei Quartey — Sun, 13 May 2012 00:27:59 +0000

I have been with the same accountant for some 20 years or so. The main advantage is that because my tax situation is not that simple – I have Schedule A and C – and he has a deep knowledge of the changes in tax law every year, I don’t need to worry that I may screw something up on my tax return. Some of the posts above mentioned mistakes on the part of the accountant. Actually I don’t believe my accountant has ever made one – he really is very good. I, on the other hand, have sent incomplete data to him in before.

The main drawback has always been expense. My accountant is not cheap. A yearly bill from him is around $1800 – $2000. At the moment, because I’m being audited and he is representing me, the bills from him just keep coming and I may end up paying twice my usual amount by the end of this year. It really makes me want to go back to the simple days of just sending in my W2. I honestly don’t want to go through another painful year like 2012 has been. It isn’t my accountant’s causing, but seriously, the bills are killing me.

By: Brandon

Brandon — Tue, 17 Apr 2012 16:53:45 +0000

Turbotax is a ripoff, I bought the 49 dollar deluxe version, ended up paying 440 dollars in state taxes, and turbotax piled on an additional 139 dollars in fees on top of what I was told I would pay: $49. Turbotax has officially lost my business.

By: Steve

Steve — Tue, 17 Apr 2012 15:38:28 +0000

Hi Shasta
We actually have a tax accountant on hand that we pay by the hour whenever we have questions about our taxes. We don’t have him file our taxes but just answer questions whenever something comes up. Very useful.

By: Steve

Steve — Tue, 17 Apr 2012 15:32:07 +0000

Hey Carl,
Yeah, the one thing that TT is not good at is dealing with special cases like your rollover. I’ll give accountants the benefit of the doubt here and say that they probably would have known about this. Having done business taxes for several years now, TT is good for handling taxes when there’s nothing new. But if there are any special cases or drastic changes, it’s best to consult an accountant. But even still, I’d probably just use the accountant for that one year, do the same in Turbo Tax so I know what I’m doing and then drop the accountant the following year.

By: Shasta

Shasta — Sat, 14 Apr 2012 22:48:05 +0000

THANK YOU!

I’ve caught some flack for doing my own S-Corp taxes. Everyone said an accountant would save more than they’d cost, but I was pretty sure by the time I got my books in order I’d have spent most of the time and effort, and our profit was so low there was no way they could save me $500 or more.

Sure enough it took a month to get the books in order (It’s our first year, so there were a lot of one-off items and a new system to set up, then all the paper and Excel records to enter because I didn’t get it set up before we started.)

The actual taxes took half a day, and if there are errors they are in my books, not in my tax filing (though TurboTax Business is not as good as the regular TurboTax), so an accountant wouldn’t help unless they set up and maintained my books.

That said, I have a feeling a tax CONSULTANT would be very very valuable, and I hadn’t really considered that option. I will definitely look for someone when the tax season is over.

By: Carl

Carl — Thu, 12 Apr 2012 17:44:40 +0000

Thanks for this article. Much of what you wrote about sounds very, very familiar.

I’d been using CPAs for several years to file our combo personal/sole proprietorship returns. But after the first CPA made a pretty significant error and responded poorly to it, and the second left our 1040 filing until the last minute (and thus had me running around transferring funds into retirement accounts to make the deadline), I thought I’d give TurboTax a try.

We’ve used TT for about four years. It’s been fine, but I think I’ve hit the wall this year after receiving notices from the IRS noting “discrepancies” in our return. It appears we filed correctly, but the IRS is wanting more info. But these notices are stressful.

What really pushed me over the edge was discovering, quite by accident, that since 2010, I have been obligated to file a separate annual return (known as Form 5500-EZ) for my Individual 401(k). In fact, anyone with a Solo 401(k) that reaches $250k in value has to file that form each year. Trouble is, when I rolled two retirement accounts into that pension plan in 2010, my financial advisor never mentioned this new filing responsibility. Neither did Schwab, which is the custodian for that pension. So here I am, eight months after the 2010 return was due, and I discover that I should have filed. And the penalty for late filing? $25 a day, or $650 a month.

I’m now talking with my old accountant to at least get me through this 5500-EZ debacle (I don’t think he knew about this little rule, either). But I’ll probably get back on the CPA wagon and accept the financial hit of $650 to $800 a year in exchange for less time spent on taxes, and hopefully fewer notices from Uncle Sam.

By: Ali

Ali — Tue, 06 Mar 2012 15:25:14 +0000

I have a partnership and will be trying Turbo Tax for the first time this year. The accountant that I’ve been using the last couple of years never seems to give a complete answer to the questions that I have or I have to research deductions, etc. and then provide the information to him. When I go in for my appointment he sits in silence plugging in the numbers that I’ve already prepared in spreadsheets and then tells me what I owe. With a small business and then having to shut down half the year due to medical reasons, I just can’t afford his services this year, nor do I feel that he is doing a good job to warrant my business any longer. Maybe in the furture I’ll look for someone new if my business really starts to grow, but for now, I’m going to try Turbo Tax.

By: Dan

Dan — Thu, 01 Mar 2012 20:17:34 +0000

I have been a faithful user of TurboTax for a few years. This year, I made the mistake of going with a tax accountant. He is charging me between $200-240, and after a couple of phone calls to check on his progress, he told me I was getting back a whopping $34 from the feds and about $180.00 from the state. My wife plugged in the SAME numbers into TurboTax, and she came up with about a $1700 refund from the feds and over $300 from the state. I told the tax accountant not to e-file his figures and my wife promptly processed the TurboTax return. I will pay the accountant for his “time,” but to be honest, I felt that I got ripped off. I’ll use his figures and compare it to Turbotax just to see what he did differently. Guess I’ll call it “tuition” as part of my “education, ” but I’m never using an accountant for taxes again unless my tax situation gets uber-complicated. BTW, TurboTax says my audit risk is low, so I didn’t do anything shady. I truly believe this guy just didn’t do the best job for me.

By: Steve

Steve — Wed, 18 Jan 2012 04:28:46 +0000

The numbers turned out to be very similar except for the clerical error and the one tax deduction that he missed.