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Message
Another Tax Question: Can a CPA "Work Magic" compared to TurboTax
Posted on 2/12/13 at 2:06 pm
Posted on 2/12/13 at 2:06 pm
I'm self employed and neglected to file quarterly. I ran my numbers through Turbo Tax and came up with a tax liability of about 12K fed & state. If I take my info to a CPA and pay him several hundred dollars, is he likely to save me enough money to make it worthwhile?
I thought Turbotax' discount software was quite detailed and don't see how a CPA could really do much better.
More detailed info:
1 W2
2 1098e's for student loan interest paid
About $4K in medical costs
About $1K in charitable donations
Lots of mileage & vehicle expenses, cell phone expenses, etc.
I thought Turbotax' discount software was quite detailed and don't see how a CPA could really do much better.
More detailed info:
1 W2
2 1098e's for student loan interest paid
About $4K in medical costs
About $1K in charitable donations
Lots of mileage & vehicle expenses, cell phone expenses, etc.
6
Posted on 2/12/13 at 2:18 pm to GaryMyMan
Can you take home office deduction (office space, internet, supplies, etc.)? These can add up and reduce your taxable income. Does Turbo Tax look at all of this too?
Posted on 2/12/13 at 2:26 pm to GaryMyMan
It's hard to say. Do you have any depreciable assets you are claiming? Sometimes that can be a little harder to determine on your own if you aren't familiar with it.
Don't forget that you can also deduct the cost of health insurance if you paid it with post tax dollars. I don't know if you included that in your 4,000 in medical but I'm assuming you have.
Do you have any investment income? Sometimes it's best to go to a cpa for guidance on that.
I'm assuming your penalty for not paying the quarterly estimated taxes is included in that amount you wrote down?
The computer programs are often pretty thorough but without knowing every expense you had it's hard to know if there's something you may have missed. My guess is that you haven't missed anything major.
Don't forget that you can also deduct the cost of health insurance if you paid it with post tax dollars. I don't know if you included that in your 4,000 in medical but I'm assuming you have.
Do you have any investment income? Sometimes it's best to go to a cpa for guidance on that.
I'm assuming your penalty for not paying the quarterly estimated taxes is included in that amount you wrote down?
The computer programs are often pretty thorough but without knowing every expense you had it's hard to know if there's something you may have missed. My guess is that you haven't missed anything major.
Posted on 2/12/13 at 3:38 pm to GaryMyMan
A CPA is most useful for tax planning during the calendar tax year. He/she can help you make decisions from a timing, amount, etc. position that will positively impact your filing.
After the tax year has ended there is only so much that can be done. Legitimate tax software covers this well for most cases.
After the tax year has ended there is only so much that can be done. Legitimate tax software covers this well for most cases.
Posted on 2/12/13 at 3:51 pm to GaryMyMan
TurboTax asks questions that have yes or no answers that lead to specific reporting of information. However, the answers to the questions it asks are often a yes, but... instead of a definitive yes. And following the but... will frequently lead to a better result.
Those yes or no answers also treat the tax code as if everything is a black or white. The complexity of our tax code leave many grey areas where the right answer is open to interpretation, and TurboTax doesn't care about interpretations. A good CPA cares about little else as he looks for opportunities for tax savings. The value of a CPA comes from his knowledge of the tax code and how to apply facts and circumstances favorably for his clients. You get none of that from TurboTax or any other tax return software.
Those yes or no answers also treat the tax code as if everything is a black or white. The complexity of our tax code leave many grey areas where the right answer is open to interpretation, and TurboTax doesn't care about interpretations. A good CPA cares about little else as he looks for opportunities for tax savings. The value of a CPA comes from his knowledge of the tax code and how to apply facts and circumstances favorably for his clients. You get none of that from TurboTax or any other tax return software.
Posted on 2/13/13 at 7:13 am to GaryMyMan
If you're self employed they may be able to structure your business to avoid most of the self employment tax, TurboTax isn't going to help with that.
Posted on 2/13/13 at 12:42 pm to GaryMyMan
quote:
I'm self employed and neglected to file quarterly
I doubt much can be reduced this year, but yeah you should definitely get one for 2013.
Hell, if you're making enough wouldn't be a terrible idea to set up an s corp
This post was edited on 2/13/13 at 12:50 pm
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