Tax Software vs Tax Preparer vs Yourself

Discussion in 'Community Discussion' started by dukebound85, Jan 30, 2012.

  1. dukebound85 macrumors P6

    dukebound85

    Joined:
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    #1
    Which do you use?

    Does software like TurboTax or TaxCut tend to be conservative in the refunds/amt owed? Is the higher price of using a tax specialist worth it? What has been your experience?

    Thanks
     
  2. Tomorrow macrumors 604

    Tomorrow

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    Mar 2, 2008
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    Always a day away
    #2
    Turbotax online. Long form, itemized deductions, e-filing, fifty bucks. Cheaper if you qualify for the short form. And you get call-in help if you want it (but I've never needed it).
     
  3. dmr727 macrumors G3

    dmr727

    Joined:
    Dec 29, 2007
    Location:
    Southern California
    #3
    We have a tax guy. Used to use Turbotax, which was quick and very easy.

    Ultimately it depends on your tax situation. If it's complicated, a good tax guy can find stuff to deduct that you never would have thought of. That's where he/she will pay for himself, and then some.
     
  4. yg17 macrumors G5

    yg17

    Joined:
    Aug 1, 2004
    Location:
    St. Louis, MO
    #4
    I use TaxCut. I take the standard deduction so the math is fairly straightforward.

    As a sanity check, I'll plug my numbers into a few of the free tax refund calculators online and make sure they all match up.
     
  5. 184550 Guest

    Joined:
    May 8, 2008
    #5
    Tax Preparer. She's found numerous refunds for my parents over the past couple of years and now that I can't use a 1040EZ I'll be using her.
     
  6. dukebound85 thread starter macrumors P6

    dukebound85

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    #6
    Does the software like TT not utilize those refunds?
     
  7. maflynn Moderator

    maflynn

    Staff Member

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    Boston
    #7
    I use Turbo Tax. I've been using that for years and I'm happy with the results from TT
     
  8. jetlife2 macrumors regular

    jetlife2

    Joined:
    Apr 18, 2004
    Location:
    Cincinnati, Oh
    #8
    It's a function of complexity

    I have been full circle. I started out doing my taxes when I had only earned income and it all fit on one tab of an Excel sheet. (in fact it was Lotus 123). If you have the time, and your situation is simple, build a spreadsheet that looks like a 1040 with the same line numbers, and you will learn a lot.

    Then over the years I got married, got a house, got a rental house, got foreign taxes, AMT, ....I added tabs upon tabs to that spreadsheet. Finally it got so complex I called in a professional preparer. He indeed found things I had not, and for some years I used his company for the peace of mind. It was expensive but worth it.

    Then I realized my situation had stabilized, no more new forms every year, every year the return structure was teh same, just different numbers; and decided to try Turbotax. Even with all of the above complexity, the version I needed was only about $90, where the professional fee was more than 10 times that. Guess what? Turbotax worked perfectly even with all that complexity. And guess what? It found stuff that my preparer had not - because it asked questions he had not asked.

    So now I am back to doing it myself, but this time with Turbotax. And saving a bundle.


    So bottom line: if your situation is relatively straightforward, you can do it yourself, it's not hard. As it gets more complex, I would recommend a preparer until you understand it completely. Once you do understand it, you can use software yourself, even if it is a complex situation. I would not have had the confidence to go direct to software, there is nothing like being able to ask a human a question.

    Caveat: You are signing the return, whoever or whatever does the calculations. So take the time to make sure you are comfortable with the answer, however you get there.
     
  9. renewed macrumors 68040

    renewed

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    Bemalte Blumen duften nicht.
    #9
    Anyone used the TurboTax iPhone app yet? Opinions?
     
  10. 184550 Guest

    Joined:
    May 8, 2008
    #10
    Roughly 70% of the refunds the tax preparer has found would not have shown up in software like TT.

    That, and I just trust an actual person more. :eek:
     
  11. mobilehaathi macrumors G3

    mobilehaathi

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    #11
    I'm lucky enough to have a family friend who is a tax professional and does mine at a substantial discount. Worth it even more since I can't file an EZ.
     
  12. steve2112 macrumors 68040

    steve2112

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    #12
    I use Turbo Tax online. My bank actually offers the use of it for free through their online banking site. They do charge to file, but not for the software itself.
     
  13. jetlife2 macrumors regular

    jetlife2

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    Cincinnati, Oh
    #13
    Can you provide examples? My experience has been the opposite. Thanks
     
  14. 184550 Guest

    Joined:
    May 8, 2008
    #14
    No. Thanks. :rolleyes:
     
  15. GoCubsGo, Jan 31, 2012
    Last edited: Jan 31, 2012

    GoCubsGo macrumors Nehalem

    GoCubsGo

    Joined:
    Feb 19, 2005
    #15
    Look, a tax preparer should have acute knowledge of tax laws. They should be able to help people with complicated returns file their taxes accurately and perhaps find deductions that the filer may not know about. However, I never thought to use a tax preparer when I was able to file a 1040EZ because my returns did not pose any issue. When I was still filing a 1040EZ and I owed one year I used someone who had this knowledge that I did not.

    In the end, you have to make the decision that is right for you. Turbo Tax and the like will direct you through questions but even then you may not know whether you would qualify for something. It is entirely up to you.
     
  16. Plutonius macrumors 603

    Plutonius

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    Feb 22, 2003
    Location:
    New Hampshire
    #16
    Tax preparers are like car mechanics. There are good ones who keep up with everything and then there are poor ones. The tax software has all the tax laws programmed in but will probably miss out on some things if your tax situation is way out of the ordinary. For the average person's taxes, the tax software is as good as most of the average preparers (and much cheaper). The only way to know for sure is to both let your tax preparer do the taxes and to do them yourself with the tax software. A comparison over a couple years should show you if your tax preparer is worth it for you.
     
  17. malman89 macrumors 68000

    Joined:
    May 29, 2011
    Location:
    Michigan
    #17
    I use H&R Block's free online returns for my federal. I don't use their state because it isn't free and their rate is a bit higher. Due to that, I might just look for somewhere that does federal free and a more reasonable state fee this year.

    Just 22, so all I have is one source of income. Well, this year I'll have two W-2s, yippee -- school work study and now my full time post-grad job. Either way, ridiculously easy. Any fool that can read can do my taxes.
     
  18. dukebound85 thread starter macrumors P6

    dukebound85

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    Jul 17, 2005
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    #18
    Has anyone used Freetaxusa by chance? If so, any thoughts? Seems to have the cheapest efile
     
  19. samiwas macrumors 65816

    Joined:
    Aug 26, 2006
    Location:
    Atlanta, GA
    #19
    This year will be my first year to use a tax preparer. I've done them on my own using various software for the past 20 years. And I'm sick of it. Half a dozen W2's for each myself and my wife, half a dozen more 1099's for each, six states, three cities, house, stocks, IRAs, funds...it's not that it's that HARD, it's just so damn time consuming to put it all together! And then you find one wrong number, and suddenly it changes all ten returns. But you only find that after printing 150 pages of tax return!
     
  20. velocityg4 macrumors 68040

    velocityg4

    Joined:
    Dec 19, 2004
    Location:
    Georgia
    #20
    I tried doing it myself. I actually had everything filled out and went through it very carefully. But I still doubted myself.

    So I decided to give Turbo Tax a try. I ended up saving over $400 in deductions I missed.

    I have a mildly complex tax situation since I own a business so profits count as income. If I had a larger business or a much larger income then I would switch to a tax preparer just because the tax situation would become too complex.

    Turbo Tax also probably takes about a quarter of the time than forms to fill out. I'd buy through Amazon as the digital download is much cheaper than the physical version in stores. Mind that you have to buy a new version for each tax year. It also looks at the previous years return to streamline the process once you start using Turbo Tax each year.
     
  21. SuperCachetes macrumors 6502a

    SuperCachetes

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    Nov 28, 2010
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    Away from you
    #21
    TaxCut for many, many years.

    I can't use a 1040EZ, but my stuff isn't that complicated: a day job, a little business here and there on the side, the occasional IRA conversion, then a mortgage, real estate taxes, kids, charity donations, blah blah blah. Nothing software can't handle, so far.

    The deductions/refunds would be the same either way, it's worth it to me to spend $20 to not have to fill out forms directly or use a calculator. ;)
     
  22. SactoGuy18 macrumors 68020

    SactoGuy18

    Joined:
    Sep 11, 2006
    Location:
    Sacramento, CA USA
    #22
    I use TaxACT (online version). Mostly because I don't have complicated returns. :)
     

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