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Re: CPA versus Turbotax
Old 02-06-2006, 02:09 PM   #41
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Re: CPA versus Turbotax

My wife enjoyed the superbowl commercial with all the guys working on their roofs.

I bet I get checked up on the next time I go up there.

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Re: CPA versus Turbotax
Old 02-06-2006, 02:27 PM   #42
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Re: CPA versus Turbotax

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. . . or you don't have the inclination or talent, so you hire someone good to do the work. I don't want to reroof my house. I wouldn't do a good job and probably would fall off the roof. And I don't want to learn how. So I spend some money by hiring a roofer.
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Originally Posted by (Cute Fuzzy Bunny)
Its very relaxing...
Quote:
Originally Posted by (Cute Fuzzy Bunny)
My wife enjoyed the superbowl commercial with all the guys working on their roofs.

I bet I get checked up on the next time I go up there.

Don't watch football so don't have a clue about the commercials. I must have been witty without realizing it.
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Re: CPA versus Turbotax
Old 02-06-2006, 02:33 PM   #43
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Re: CPA versus Turbotax

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Originally Posted by Martha
And then you better make a trip to the lawyer to find out the various other consquences of an LLC, limited partnership, QTIP, GRAT, etc.* And then to form the entity.* Getting pretty pricey fast.

And what do you do when the lawyer and the CPA disagree?* As retire@40 and I have done on occasion.* **

In any event, you won't get anywhere outside the bubble for $325 in my neck of the woods.*

I do miss our old CPA that retired.* He and I had a good give and take and I think we learned from each other.* The new CPA just sticks my numbers into her computer program.* Not worth the $1000 it costs us.


My CPA only does my small holding corp. Last year he
charged me $485.00, which I refused to pay, so I may need someone else next year.

Doing tax work bored me silly. My own is only slightly
more interesting. Anyway, I will file two (2) single
returns (1040A) plus state. My personal gross income is under
10K, so no fed. taxes are due. I've gotten used to owing -0- and it will be a bitter pill when I have to pay
again. DW pays of course.

JG
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Re: CPA versus Turbotax
Old 02-06-2006, 03:25 PM   #44
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Re: CPA versus Turbotax

Quote:
Originally Posted by Martha
http://www.irs.gov/taxpros/article/0,,id=99032,00.html
EDIT:* Another interesting tidbit, for what it is worth.* The IRS reports that using software to calculate taxes reduces the error rate on returns to less than 1%.* http://www.irs.com/tax-software/info.htm
Presumably almost all paid preparer's are using software anyways.

I will state without any firm evidence that I believe that CPA prepared tax returns have a higher rate of error than the general public.* I base this on two tidbits of info: (1) simple returns should have a lower error rate and CPAs would not be preparing such returns and (2) the old Money magazine article of giving 50 tax preparers the same info and Money getting 50 different answers back from them.

Anyways, CPAs need to get over their self-esteem problems after being replaced by computers. They can work on more complicated things than data entry to tax software and thus charge more.
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Re: CPA versus Turbotax
Old 02-06-2006, 05:16 PM   #45
 
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Re: CPA versus Turbotax

People here seem to think this is an either or situation. I do my tax return with software and with my Accountant. I don't put my head in a vacuum and turn everything over to him.

I'll give you an example of how my tax accountant paid off. There was in a problem in our State Tax Tables one year that made Married filling separately really pay off on state taxes. I had to pay more for Federal, but the State Tax error more than made up for it. I would never have known about this, but my Tax guy advised me on this. This Paid his way for many years to come!

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Re: CPA versus Turbotax
Old 02-06-2006, 05:36 PM   #46
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Re: CPA versus Turbotax

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Originally Posted by Cut-Throat
People here seem to think this is an either or situation. I do my tax return with software and with my Accountant. I don't put my head in a vacuum and turn everything over to him.

I'll give you an example of how my tax accountant paid off. There was in a problem in our State Tax Tables one year that made Married filling separately really pay off on state taxes. I had to pay more for Federal, but the State Tax error more than made up for it. I would never have known about this, but my Tax guy advised me on this. This Paid his way for many years to come!
Great example.*

The next guy that may have done his own return that year may have done everything correctly (in his own mind), but missed out on this opportunity.

It may not happen every year, but it happens enough.
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Re: CPA versus Turbotax
Old 02-06-2006, 05:38 PM   #47
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Re: CPA versus Turbotax

Turbotax lets you 'what-if' the joint and married filing separately in about 2 seconds. I'm not sure if it automatically does it both ways and tells you which is best, I've only had the option for the past year

Quote:
Originally Posted by Martha
Don't watch football so don't have a clue about the commercials. I must have been witty without realizing it.
Yes you were. In one of the commercials, a guy goes up on his roof, sets out a chair, opens his toolbox and its full of beer. Guy on the next roof has a barbecue grill going. Then a third guy climbs up and whines that he REALLY has to fix a leaky roof.

Nice view of the Sutter Buttes from my roof top. Pull off a few of the tiles, set down on the tar paper, little sun on it and its pretty dang warm. I forgot to bring beer with me though.
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File Type: jpg sutter buttes.jpg (3.0 KB, 70 views)
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Re: CPA versus Turbotax
Old 02-06-2006, 06:07 PM   #48
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Re: CPA versus Turbotax

Quote:
Originally Posted by Cut-Throat
People here seem to think this is an either or situation. I do my tax return with software and with my Accountant. I don't put my head in a vacuum and turn everything over to him.

I'll give you an example of how my tax accountant paid off. There was in a problem in our State Tax Tables one year that made Married filling separately really pay off on state taxes. I had to pay more for Federal, but the State Tax error more than made up for it. I would never have known about this, but my Tax guy advised me on this. This Paid his way for many years to come!

Cutthroat: We have the same quirk in our state filing system in Calif.

It's under our "Gigalo" filing seperate section.(#894-249). Glad your Tax guy was sharp enough to pick up on it. 8)
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Re: CPA versus Turbotax
Old 02-06-2006, 06:15 PM   #49
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Re: CPA versus Turbotax

By the way, my brother in law bought a hummer a couple of years ago (yes, they car, you disgusting people). Put his company name on it and uses it exclusively for business.

His CPA/tax guy had never heard of the 'hummer deduction'. Once I made him aware of it, he had the cpa file revised returns for the last two years. I think that saved him about $25k.

I think he has a new CPA this year.

As a marketing executive, I really need to team up with a CPA or go get the dang thing myself so I can credibly write books.
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Re: CPA versus Turbotax
Old 02-06-2006, 06:32 PM   #50
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Re: CPA versus Turbotax

Would taxprep software have suggested to Al that he could run his medical expenses through his business and make them fully deductible?

Would it suggest that you might want to front load alimony payments right before you retire?

Would it help you decide whether your "second home" you rent for 14 days, is better off rented more than 14 days so you can get the benefit of a variety of deductions?

Would it raise issues regarding audit risk for efiling?

Would it suggest that you might want a multiple support agreement for a dependency exemption?

Does it help you maximize the amount you can put in retirement plans?

Does it help you minimize your taxes by suggesting alternative investments?

Does it recommend buying a Hummer for the Hummer deduction?



I think both tax prep software and most accountants who are hired to prepare your returns do only that--they prepare your returns based on the information you provide. And if the IRS is to be believed, software prepared returns are "accurate." But if you are interested in minimizing the taxes you pay, then you likely have to educate yourself or use a good professional. Or both.
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Re: CPA versus Turbotax
Old 02-06-2006, 06:36 PM   #51
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Re: CPA versus Turbotax

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His CPA/tax guy had never heard of the 'hummer deduction'.* Once I made him aware of it, he had the cpa file revised returns for the last two years.* I think that saved him about $25k.
What did you do differently from the CPA to save him $25K?
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Re: CPA versus Turbotax
Old 02-06-2006, 06:43 PM   #52
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Re: CPA versus Turbotax

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Would it raise issues regarding audit risk for efiling?

Does it help you maximize the amount you can put in retirement plans?
All of the other questions are "No... not even close", but Turbotax did address these questions last year.
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Re: CPA versus Turbotax
Old 02-06-2006, 06:55 PM   #53
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Re: CPA versus Turbotax

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All of the other questions are "No... not even close", but Turbotax did address these questions last year.
Of those two questions, the first one is meanigless anyway. For the second question, I never used Turbo Tax, but I would be very surprised if it realized ALL the retirement plan options one could maximize and the best approach to doing so, not just the Roth and Traditional IRAs.

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Re: CPA versus Turbotax
Old 02-06-2006, 06:59 PM   #54
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Re: CPA versus Turbotax

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What did you do differently from the CPA to save him $25K?
Actually knew about the deduction.

I dont think anybody is contesting the value of a GOOD tax preparation expert if you arent interested or willing to do your own research or your tax situation is so complex that an expert is needed.

I think its almost impossible to FIND a GOOD tax preparation expert that will do a better job for a reasonable price.

I think past that, what you're looking at has less to do with taxes and more to do with FINANCIAL PLANNING. And I think that ones been beaten to death. If you find a GOOD one, and you're willing to PAY A LOT OF MONEY to them for their advice, and you are UNWILLING to do your own legwork and research, then you should get one. And a tax guy. Two of them in fact.

:P

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Re: CPA versus Turbotax
Old 02-06-2006, 07:04 PM   #55
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Re: CPA versus Turbotax

I've had a CPA do my taxes for the last 15 years. *Couple of reasons:

1) *Want to increase my chances of NOT being audited. *Every year this guy explains how to smooth the return so it doesn't flag an audit.

2) If I hit the audit lottery, I want a CPA in my corner. *I believe most wealthy people should expect to be audited at sometime in your life. *Turbotax isn't help much when the G7's are asking questions trying to justify the gov expense of the audit.

Yes I've been farmed out to the "new hire" but I meet with the same CPA and we review the return in detail before the final numbers are crunched (input in his tax SW).

He also takes my calls 2-3 times per year with questions and what-if scenarios ... pretty good deal.

$320 personal return. *$1050 for a corporate return.
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Re: CPA versus Turbotax
Old 02-06-2006, 07:59 PM   #56
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Re: CPA versus Turbotax

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All of the other questions are "No... not even close", but Turbotax did address these questions last year.
Interesting. What did TT do on the IRAs? Did it calculate things like amounts you could contribute to a spousal IRA? Evaluate a ROTH vs. traditional IRA? What did it say about audit risk and efiling? Just curious, so if you can't remember that's ok.

Quote:
Originally Posted by retire@40
Of those two questions, the first one is meanigless anyway. For the second question, I never used Turbo Tax, but I would be very surprised if it realized ALL the retirement plan options one could maximize and the best approach to doing so, not just the Roth and Traditional IRAs.
I disagree on the meaninglessness of efiling and audit risk. I know that efiling wil catch a lot of inadvertent errors and give you a chance to correct them without penalty. But efiling also allows the IRS to do a lot more cross checking than it can with paper filing. What risks you want to favor is your choice.

With respect to maximizing retirement options--what do you think TT would miss?



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Re: CPA versus Turbotax
Old 02-06-2006, 08:08 PM   #57
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Re: CPA versus Turbotax

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Interesting.* What did TT do on the IRAs?* Did it calculate things like amounts you could contribute to a spousal IRA?* Evaluate a ROTH vs. traditional IRA?* What did it say about audit risk and efiling?* Just curious, so if you can't remember that's ok.
I remember it asked questions about contributions, let you know if you blew a limit, and made recommendations on the following years' IRA contributions. It probably had more features-- everyone claims to have an IRA evaluator-- but I'll know more in the next couple months.

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Originally Posted by Martha
I know that efiling wil catch a lot of inadvertent errors and give you a chance to correct them without penalty. But efiling also allows the IRS to do a lot more cross checking than it can with paper filing. What risks you want to favor is your choice.
Since our returns don't push the limits, I'd rather have the IRS catch an electronic mistake. I can also schedule the ACH payment for the 15th via EFTPS instead of mailing in a paper check at the last minute.

I'm more concerned that they're going to screw up (or lose!) the paper version and efiling is a lot less hassle than printing, addressing, & mailing.

Some years TurboTax did efiling, other years (multi-page Schedules D) it said the return had to be mailed.
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Re: CPA versus Turbotax
Old 02-06-2006, 08:31 PM   #58
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Re: CPA versus Turbotax

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Actually knew about the deduction.
Hard to believe anyone could miss a motor vehicle deduction after going through the business disbursements for the year, especially one that large, whether paid in full with one business check or financed. Just hard to believe he got no deduction at all before you showed up.
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Re: CPA versus Turbotax
Old 02-06-2006, 08:57 PM   #59
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Re: CPA versus Turbotax

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With respect to maximizing retirement options--what do you think TT would miss?
I would be curious to see if it would give you answers on the most efficient retirement contribution options. For example, maxing out on matching 401(k) then maxing out Roth IRAs, then going back to the 401(k).

Or for self-employed, partners, or members of an LLC, or shareholders in closely-held C and S corporations, giving you answers on mandatory contributions and selecting the best plan (and reasons why) among solo-401(k), SEP-IRA, SIMPLEs, etc while making cost considerations for mandatory additional contributions for any qualified employees and identifying issues relating to things like controlled companies and the such.
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Re: CPA versus Turbotax
Old 02-07-2006, 08:01 AM   #60
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Re: CPA versus Turbotax

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I would be curious to see if it would give you answers on the most efficient retirement contribution options. For example, maxing out on matching 401(k) then maxing out Roth IRAs, then going back to the 401(k).
I would be too. Unfortunately, I would be surprised if many tax preparers mentioned this. Again, it goes back to financial planning versus tax return preparation.

Quote:
Or for self-employed, partners, or members of an LLC, or shareholders in closely-held C and S corporations, giving you answers on mandatory contributions and selecting the best plan (and reasons why) among solo-401(k), SEP-IRA, SIMPLEs, etc while making cost considerations for mandatory additional contributions for any qualified employees and identifying issues relating to things like controlled companies and the such.
This is a good point. If you have a business, financial/tax/succession planning advice is invaluable. It is also easy to mess up on your own. Especially if you have employees beyond yourself.
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