Between January and April every year, many Americans suffer the same dilemma that seems to never be solved; should you be doing your taxes with an accountant or with Turbotax?. This inner conflict is not a new one, and doesn’t have any one definable yes or no answer. The truth, ultimately, depends on what your circumstances are. For some of us, we have a straight forward income with straight forward deductibles, but as life advances, so does the difficulty level of paying taxes.
Straight forward type – Use TurboTax
For the most part, people who are just starting their professional careers do not have investments or assets they need to include in their taxes, or — if they do — they are often still low enough to not cause too much difficulty. TurboTax is great with those, they have some options for the average tax deductions and assets, and can easily collect and compile your data. The software is designed specifically to handle the average, and it does what it is designed to do very well.
However, when things start to get complicated… that’s when it’s time to consider a Certified Public Accountant (CPA). What’s complicated, you might ask? Inheriting stocks, IRAs or a house; buying a house or an income property; taking up contract work in addition to full-time income; going through multiple jobs in a single year; becoming an ex patriot or providing services/products nationwide to name a few.
Complicated? Use a CPA
Many people may turn away from a CPA because, let’s face it, needing an accountant sounds like something you could do yourself (or with TurboTax), but this isn’t the case. Most CPAs are affordable, and they are well worth the cost. Plus, by the time you reach the level of complication that warrants a CPA, the premium features of TurboTax probably cost about the same, the difference is the person vs a software program. A person can understand and cater to your specific situation. A computer program cannot.
CPAs have experience in a field that confuses many. While a software program can collect data, compile it, and make a decision based off an algorithm, a CPA collects, compiles, and makes decisions based on the customer, the economy, the law, and what opportunities present themselves as best for a potential customer. Plus, with experience comes expertise especially in niche situations.
A professional is also useful for the sheer amount of information they can provide. While TurboTax may have the little information button to help explain the options, a professional can explain and help you plan for what would be a better solution in years to come. A software system doesn’t provide advice for how best to manage your finances over the new year so that your next year tax return is solid. A professional, they can help you plan for what decisions, choices, or purchases you should make this year to minimize your amount owed to the tax man.
The conclusion of the old accountant vs TurboTax battle is this; if you have a question not easily answered with the standard services of the software program, get a certified public accountant instead. This includes the previously mentioned new business owners, investors, people planning for estates for their future generations, any life changes like marriage or divorce, stocks, or any large savings plans. A professional is always a better option when it comes to managing your money, and planning for your financial future.