The common misconception is that CPA's work magic to produce tax returns with unusually low tax liabilities. That can occur, but it is usually due to unusual circumstances, such as a hurricane being declared a disaster triggering special deductions and other relief. The benefit of using a CPA is that the CPA's experience should enable him to prepare the tax return with greater efficiency and confidence in the result.

What do I mean by greater efficiency? I try and quantify the value of time, and compare the relative values. For example say my billing rate for tax return preparation is $150 per hour and I can prepare a tax return in 4 hours. My time should be worth $600 to a potential client without any concern for the quality of the result. The potential client has to prepare his tax return during his leisure time since he does not get paid to prepare his tax return. If that potential client values his leisure time at $100 per hour, then he has to be able to prepare his tax return in less than 6 hours to do it at less cost than paying me to prepare the return. As the potential clients return increases in complexity efficiency trends in my favor.

Then there is the confidence in the result factor to consider. My professional reputation is at stake with every return I prepare, so I have pretty good incentive to get the best possible result for each client. I strive to get the best result for each client given their risk tolerance which is something that software cannot do. So I usually come up with a better result than the client using software because I ask questions different from the yes or no questions that the software asks. And I also save clients any aggravation and frustration they can encounter while preparing their tax returns as an additional benefit.

The lagniappe of my services is my ability to identify planning opportunities for future tax savings. Tax preparation software just doesn't do what if scenarios as well as humans.