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Message
When is worth it to use a CPA?
Posted on 5/23/17 at 10:44 am
Posted on 5/23/17 at 10:44 am
So I have been using HR&Block and TurboTax the past few years to file my own taxes. To be honest - it seems pretty straight forward, but I have this nagging thought in the back of my head telling me - I would have gotten more money if I used a CPA.
I don't think my tax situation is too complicated, but just wanted to make sure.
1) I have a mortage
2) I'm single with no kids
3) Work one W2 job with mid 6 six figure salary
4) I do all the 401k stuff
5) Have taxable investment accounts but primarily invested in ETFs
6) I also max out my HSA
Would I see a huge gain in using a CPA over continuing to use HR&Block/TurboTax?
Would a CPA see something that these online solutions are missing?
I don't think my tax situation is too complicated, but just wanted to make sure.
1) I have a mortage
2) I'm single with no kids
3) Work one W2 job with mid 6 six figure salary
4) I do all the 401k stuff
5) Have taxable investment accounts but primarily invested in ETFs
6) I also max out my HSA
Would I see a huge gain in using a CPA over continuing to use HR&Block/TurboTax?
Would a CPA see something that these online solutions are missing?
5
Posted on 5/23/17 at 11:17 am to tissle
Probably not.
This is coming from an accountant too (audit, screw tax)
If my taxes got complicated, with more itemized deductions, investment properties and what not, I'd use a CPA. But all I have are normal/simple forms and I can do it myself.
Shouldn't* cost more than TurboTax, plus you'd get audit protection too, but really only a convenience if it's not too complicated.
This is coming from an accountant too (audit, screw tax)
If my taxes got complicated, with more itemized deductions, investment properties and what not, I'd use a CPA. But all I have are normal/simple forms and I can do it myself.
Shouldn't* cost more than TurboTax, plus you'd get audit protection too, but really only a convenience if it's not too complicated.
This post was edited on 5/23/17 at 11:19 am
Posted on 5/23/17 at 11:21 am to tissle
Are you making mid 6 figures like $500k or you mean mid $100s like $150k? Big difference.
If like $500kish I'd get a CPA for sure, $150k ish not necessarily.
Your situation is probably $600-800 for the CPA to do your annual taxes. I demand a sit down once a year to bounce questions off of my CPA, prepare for the future, and makes me feel more comfortable but I pay for that. Its worth it though.
I don't see anything where a CPA will save you money, but they may find something. The benefit will be the peace of mind hopefully.
I'm on my second CPA though, i'll tell you that if you are making $150k you won't be a big client that gets a ton of thought. If you make $500k you will get some extra tips and time.
If like $500kish I'd get a CPA for sure, $150k ish not necessarily.
Your situation is probably $600-800 for the CPA to do your annual taxes. I demand a sit down once a year to bounce questions off of my CPA, prepare for the future, and makes me feel more comfortable but I pay for that. Its worth it though.
I don't see anything where a CPA will save you money, but they may find something. The benefit will be the peace of mind hopefully.
I'm on my second CPA though, i'll tell you that if you are making $150k you won't be a big client that gets a ton of thought. If you make $500k you will get some extra tips and time.
Posted on 5/23/17 at 11:41 am to tissle
You should be fine doing it yourself.
You could always pay someone to do it once for the peace of mind and to confirm you are doing it correctly.
You could always pay someone to do it once for the peace of mind and to confirm you are doing it correctly.
This post was edited on 5/23/17 at 11:43 am
Posted on 5/23/17 at 11:55 am to tissle
CPAs who work in tax do 5 things. I tell this to potential and current clients, as well as staff, all the time.
1) Determine what is, and what is not, a deductible expense
2) Determine what is, and what is not, taxable income
3) For one and two, if it is a deductible expense or a taxable income, determine the year in which it applies.
4) Determine ways to manipulate and impact the first three items.
5) You absolutely hate the idea of doing it yourself and for peace of mind, would rather hire someone.
If I can't do one of those first four things for you, then it doesn't make sense for you to hire me. Further, even if I can do one of those things for you, there has to be a cost benefit to you. If my knowledge and expertise is going to save you $75 in taxes, don't hire me, that would be a waste of your money.
And if you fall in the 5th category, I usually refer you to an enrolled agent who has a much lower cost structure than I do.
It sounds like to me... everything you need for taxes is determined for you. You get documents that tell you all the amounts you need, right? You don't own a business or rental property.
1) Determine what is, and what is not, a deductible expense
2) Determine what is, and what is not, taxable income
3) For one and two, if it is a deductible expense or a taxable income, determine the year in which it applies.
4) Determine ways to manipulate and impact the first three items.
5) You absolutely hate the idea of doing it yourself and for peace of mind, would rather hire someone.
If I can't do one of those first four things for you, then it doesn't make sense for you to hire me. Further, even if I can do one of those things for you, there has to be a cost benefit to you. If my knowledge and expertise is going to save you $75 in taxes, don't hire me, that would be a waste of your money.
And if you fall in the 5th category, I usually refer you to an enrolled agent who has a much lower cost structure than I do.
It sounds like to me... everything you need for taxes is determined for you. You get documents that tell you all the amounts you need, right? You don't own a business or rental property.
Posted on 5/23/17 at 12:27 pm to LSUFanHouston
quote:
it doesn't make sense for you to hire me
quote:
don't hire me
quote:
I usually refer you to an enrolled agent who has a much lower cost structure than I do.
Sounds like you hate to work
This post was edited on 5/23/17 at 4:38 pm
Posted on 5/23/17 at 12:37 pm to LSUFanHouston
Thanks guys. Based on the feedback here - it seems like I don't need a CPA. My concerns were that I didn't think Turbo Tax was finding all my deductibles...but based on our discussion here it seems like I don't have much to worry about and a CPA is probably not required for me.
Posted on 5/23/17 at 12:43 pm to tissle
Absolutely not. I'm assuming you itemize and deduct some combination of mortgage interest, state income tax, property tax, and/or sales tax? What's left? There isn't much beyond that in your situation.
Posted on 5/23/17 at 3:51 pm to tlsu15
quote:
Sounds like you hate to work
I love working with complex clients where I can use my skills to really help them.
I love tax planning.
I hate filling out simple tax forms.
Posted on 5/23/17 at 4:39 pm to LSUFanHouston
It actually sounds like you're taking the moral high ground and not robbing people for easy money - I just thought it sounded funny
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