I have used Turbotax software for the past few years. Prior to that I had an CPA because for several years I had a bunch of deductions (businesses I started, home office for my job, unreimbursed employee expenses, rental property, etc.).
These days I have mostly normal deductions so I think TurboTax will do fine. Having an outside expert (be it a CPA or H&R or whatever) can be a real help because the tax laws are so arcane. I remember the first time I met my CPA he told me that some of my deductions, while perfectly valid, were an invitation to an audit. He also told me about some deductions I was missing because I was unaware of specific deductions only for certain years (I think it had to do with air conditioning we installed) and the deductions could be maximized by managing the depreciation schedule to coincide with my situation to mitigate the effects of the alternative minimum tax I was paying.
Or something like that. I would have NEVER discovered that stuff on my own by using just software.
Do your taxes your normal way then have H&R take a look at what you did.
Well - if you have a simple return either choice is fine. If you have a more complex return neither choice is good. You get what you pay for just like with cars/ car parts etc.. With one of these choices you may actually get less than you pay for. Any complexity at all - go to a real professional. Don't believe the advertising - that's all it is. Good luck.
H&R block is pretty pricey to go long form. all they will ask is if you think you have XXXX amount of money in deductions to make long form (for me it was like $7000), so i always choose short, and always feel like i paid wayyy too much. so i'm going to give turbo tax a try this year.
I use turbo tax. Have been for more than a decade. I have a middle of the road complexity return with stocks, gain/losses, that kinda crap.
I got an auto-audit letter from IRS this summer for a return from 3-4 yrs ago. Took my turbo tax things, all my details, went to CPA, paid them $400 to 're-file' an amended return to correct an error in how one my schedules wasn't attached since it was accounted for in my w2 and it made the auto-audit letter go away. I got another $1.60 back from the fed and $17 from the state.
So I still use Turbo Tax because I gain little/nothing from a CPA in terms of finding additional deductions.
I've been using turbotax for a decade as well. I tried a couple years using a professional when I had investments, a rental property and some other financial changes. I had to do just as much work collecting paperwork as I do with turbotax. It also cost me a lot more money and the results were the same. So now I just use the program and follow the rules as best I can. If you're really worried about an audit then pay the extra for the audit protection. While not perfect, it is still cheaper than a CPA.
If you're having trouble finding deductions the problem isn't the tax problem. The problem is you don't have enough deductions! At the least don't go to H&R. They just use a program similar to TaxCut and most aren't experts in the tax field. Use a real CPA and compare the difference with TurboTax. I bet you'll find you just wasted money unless you have a complex situation.
I've been using Turbo Tax for more years than I can remember. Prior to that I prepared my own returns. I went through training conducted by the IRS to serve as a volunteer tax preparer back in the early 90s, and saw how relatively easy it is to prepare your own returns, if you have any practice at all reading government regulations (which I have way too much of).
My returns have always been complex, and are even more so now. It used to take me an entire weekend, and the whole kitchen table to do mine manually. Turbo Tax has it down to a few hours. I have multiple investments, along with a couple of rental properties, home purchase/sales, etc.
I end up buying the TT Premier (the one just below small business version) every year, and it does a great job.
Consider this: HR Block only knows what you tell them. In order to gather information, they're going to follow an interview format, asking you for different types of income and expense/deduction sources. The person asking that question is on an appointment schedule, the more people they see, the more money the company makes, meaning there's no incentive for them to slow down, wait for you to contemplate the finer details of 2012... Once they have the information from you, they go in the back, plug the details into a computer program (a commercial version is available on their website, BTW), and it spits out your information.
Wouldn't you rather sit at home, in your PJs, take your time, and answer the same questions with your computer, so that you can back-track, or get up to go look up some information, etc? Then, as you're answering the questions, you're plugging the numbers into a similar program, which will spit out your information and forms.
HR Block doesn't offer anything additional, and in some ways doesn't offer as much, in my opinion. It just makes you think you're getting a "tax professional" which preys on your insecurity and potential fear of the IRS. They're only as good as the information you give them, and you can get the same outcome at home.
How complex is your return? FWIW, unless you have home mortgage interest, it's difficult for most folks to have more itemized deductions than the standard deduction.
67 vert, the project that never ends...
2013 Gt500 vert... the new toy!
I've used TurboTax for a bunch of years but, The fun boys at the good old IRS hit me 2 years ago (for $400.) and last year (for $300.). Never had any problem for years before then. I just love the way the IRS wait until the following late December to send out the letter saying you owe more money. That way they can jack it up with %/fees etc. AHoles. Why do I get a Refund if they check stuff when I send in the 1040? Seems like they would find it then and deduct it from the refund at that time? The only thing I like with using Turbo Tax each year is that it just updates from the previous year and saves a bunch if typing in all the usual stuff.
I have always gone to an accountant since I have a lot a lot of deductions from work, stock transactions and various donations. Its about $110 but well worth it since I have always received significant returns to cover.
I used to use computer tax programs. But none of them could properly handle deductions for students, student loans and a few other things. I went to a CPA and he saved me a bundle. But he also cost me a bundle. He kept getting more and more expensive while doing less and less work. And the tax programs also kept getting more expensive. And you have to buy a new one every year. Then you have to buy the State Add-On.
Two years ago Mrs. Klutch received some payments when her mom passed away. I couldn't figure out what was taxable and what wasn't. On a whim, I went to the H&R Block office right by my house. I got lucky and ended up working with a great person there. She's very nice and really knows her stuff. She was a BIG help and the price was much more reasonable than the CPA I was using. By the time I buy a tax program, pay sales tax on it, then pay for the State Tax program add-on and pay sales tax on that, I wasn't really saving much money compared to H&R Block.
Since my kids moved out, I've been getting raked over the coals in taxes. The H&R Block rep gave us some good advice for reducing the raking.
Thus, I think it depends on the person helping you and not on the sign hanging over the door. Ask around and try to find a good tax preparer. And don't forget that you can deduct the cost of a tax preparer on the following year's tax return.
Great topic! My parents use a CPA. A couple of years ago my parents got a notice that an error was made and they had to pay a whole bunch of money. What did the CPA say? "sorry, but to review you error I'm going to have to charge you another $400". They paid the fines and got a new CPA.
As for me, I have used Turbotax for years without issue. As I've gotten older and my life became more complicated it appears that I have finally made an error... We got a notice last fall from the IRS that we had to pay about $1600 for some "mistake" that I or Turbotax had made... we paid it figuring that we were not going to win a fight with Turbotax. Then I pondered my options for months, H&R, CPA, more Turbotax. I figure all the options contain about the same level of risk, any person or software could make a mistake, however I'll take my chances with Turbotax and try to learn on my own.
65 Restomod Coupe - incomplete, 5.0, Custom wiring, AOD, 4-wheel disks, some gentle body mods
67 390 GT Fastback - finished. Acapulco Blue on black, w/ '63 Ford 406 Tripower, Shelby drop, 15 x 7 Halibrands. Built at San Jose, February 9th, 1967.
"I love you, and your smart and all... but da**!, you are an idiot!!"
"The laziest man is the most innovative."
i always use a private accountant. for $200 a year he cheats for me like like crazy but knows the limitations and loop holes to stay under. and he does not charge for an audit in case I get clipped one year.
1970 Mach 1 San Jose built Dec 23 1969. Marti says 1 of 7. Purchased in 1987. Original family owner of the powertrain 351C 2v FMX.
1993 GT 11,000 miles, Built 2-12-93 Auto, 3:27 Axle, cloth, sunroof. Untouched except for rubber and battery, Purchased new 8-3-93. still has the factory windshield fluid and new car smell.
Last edited by Blues Power; 01-17-2013 at 03:41 PM.
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