Do you double check your accountant/tax preparer's work?

[ArkTinkerer]

Like the title says.

When we first used an accountant, we double checked her work and found it wanting. We corrected it and eventually got taxes submitted on time that year. We then changed and had a much better experience. We double checked again this year and found a few items we had given were missing in the tax return and one item was on the wrong line.

I strongly suspect most of my friends don't double check.

What about those of you here? Do you recheck their work? Any suggestions/stories about making sure your return is correct after paying someone else to do your return?

Arktinkerer

 

[2B]

Why do you keep paying someone to do your accounting (taxes?) that has to have their work corrected? You are obviously not getting your money's worth.

 

[calmloki]

We double check our tax prep person's work. Common to find a few errors, often having to do with two of us splitting most, but not all of the rentals, and each of us having a couple little differences (IRA, business, itemized deductions...). One year we found a rather large error - we had somehow failed to submit to her ANY of the income or expenses on a little rental house - just failed to make it into the Quicken reports and we missed it before sending off our data. Our bad, we caught it, she fixed it. This year we will each have a primary address, but in two different states, 11 loans between the 2 of us, a gifted property to go against our lifetime gift exclusions, rental income from one state, a trust income from another state, and a stack of different depreciation schedules for carpets, roofs and other rental improvements. Then there will be a bit of stock market stuff.

Our double checking has little to do with how things are filed and is more number checking and seeing what we are paying and how it was apportioned. We've no problems with her work or what she charges. Mistakes happen, how they are fixed is the important thing.

 

[MikeWillRetire]

I check the parts that I understand. If I understood it all, I wouldn't use an accountant.

 

[Meadbh]

I check the parts that I understand. If I understood it all, I wouldn't use an accountant.

+1

 

[Animorph]

If I hired someone to do it, I'd check it carefully. So I do it myself.

 

[kimcdougc]

My accountant does my taxes while I am sitting there. I can watch her put the numbers in. She has always been very accurate.

 

[marko]

If we've had a particularly financially complicated year, we'll have our accountant do our taxes.

I will always run a parallel effort on TT to 1) see if there is any difference and 2) convince myself that I should've saved the $700 and done it myself next time.

When something does bounce, it's good having the accountant who did it help us work through the issue with the IRS.

 

[MBAustin]

We are currently using an accountant because of various complications, but I also run things through TT mostly to make sure I haven't missed any info to give her and to understand things that change year to year.

Our tax situation should simplify greatly in 1-2 years and I was thinking of saving the $$ and just doing TT myself, but if something happened to me, it would be very helpful for DH to already have an accountant who knows our particular situation as he would most likely not feel comfortable doing it himself. So it may be worth the $$ just to keep her in the loop.

 

[2017ish]

I did when we had rental property, limited partnerships, and two state income taxes. After three years of correcting them, started doing it myself (1992 or so). Was glad when I could quit doing it with pencil and paper!

 

[MRG]

I know very little about tax preparation. I just ordered a book "Taxes made simple, Income taxes explained in 100 pqges or less". Until I understand the basics there's not much value in me checking what I don't understand.

Our tax situation got easier as of this year. I plan to read and review what my CPA does. Maybe I can do the preparation, and use the CPA for consulting.

If anyone knows of better education, books please feel free to mention it.

 

[TrvlBug]

Other than for the obvious and transposition errors, I never did a deep dive until last year. As someone posted, if I understood taxes, I would do them myself. As DH will be retiring this year, I wanted to understand our taxes so that I can bring them in house for DIY. Discovered an error last year that saved us $3K .

Never finished the comparison for last year as my Mac died just before I finished and will do so in the next couple of weeks so that I can do this year's taxes myself. They are not overly complicated, just W-2, investment and one K-1 income.

 

[Cobra9777]

I was an expat late in my Megacorp career and have a huge foreign tax credit (FTC) carryforward balance. So Megacorp still pays a Big-4 firm to prepare my return and tax equalization statement, since the FTC benefits them not me. I don't get to choose the preparer and typically I get Big-4's latest college recruit.

So, yes, I check everything and generally find multiple mistakes. However, I have always maintained a spreadsheet of my estimated taxes. So mainly what I'm checking is that the bottom line in the "hypothetical" return for tax equalization equals my spreadsheet estimates. Sometimes the spreadsheet needs tweaking, but more frequently the "hypothetical" return has errors. Eventually, the two reconcile and I give them a green light to file. My actual return with all the FTC calculations is way beyond my comprehension, so I just do a cursory check on the parts I understand, and hope for the best.

I'm looking forward to preparing my own return again some day.

 

[ArkTinkerer]

Why do you keep paying someone to do your accounting (taxes?) that has to have their work corrected? You are obviously not getting your money's worth.

We did change accountants after the first one had way to many errors for my liking. The current one gave us a return the first time that was fine as far as I could tell.

Similar to what someone else here posted, if I had the time and understood it all I would do it myself. We started using a CPA when we created an LLC and the paperwork got beyond the time we had to keep up with it all. I hate having to pay but right now I don't have the time. Next year, when retired, it will be a choice based upon how I feel about my abilities, the cost, and how much fun I'm having in retirement. Before going to a CPA it took us over a week of nights and at least two weekends to get all the work done. I suspect it would take us another 5 evenings now that we are doing the LLC.
Now it takes us (mostly my DW) about 5 evenings to get all the paperwork together.

 

[Choices]

We do ours in-house. DH pulls the info from Quicken into T T and I check it. So far, so good.

 

[Al in Ohio]

If I hired someone to do it, I'd check it carefully. So I do it myself.

Ditto. Even when I had my own buisness I did my own using Turbotax. Its just not that hard people.


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[pb4uski]

I usually do my return, put it aside for a couple days and then check it back to the supporting documents (1099s etc) just as if I was reviewing an accountant prepared return. Has seemed to work well so far.

 

[unno2002]

Double check, yes. I recently had a CPA firm put the wrong EIN on an IRS form...

 

[GoodWishes]

Everyone makes mistakes, doctors, lawyers, accountants. I try to check what I can, what I understand as others have pointed out.

We did our own taxes for many years. A few years ago, we wanted to out source it to see if it is worth while. So far not too bad, found mistakes here and there but no big problem.

 

[Midpack]

I've never hired an accountant. Like others have noted, I can't imagine hiring someone to do my taxes if I was capable of double checking for myself.

But if I did check and found mistakes, I'd probably expect the accountant to provide a partial refund for their services, and not use them again. For most people, tax preparation software is all that's needed. For the 15 years I've used TurboTax, I've yet to find a mistake, and neither has the IRS.

 

[gerntz]

You're responsible for the return. I find it foolish to not understand the work done & to not ask questions when you don't. You let the work of other employees/subordinates go when you don't understand it?


I've had our taxes done because they are so complicated - semi-retired CPA says we're in the top 2-3 of 75-80 he does - I wouldn't have known everything to look for. But once I see what was necessary, I double check the work. The CPA sometimes has input errors from missing income sources details in reports or transposing numbers. These haven't been large errors but he knows I'm watching.

 

[2017ish]

.... For the 15 years I've used TurboTax, I've yet to find a mistake....

I had a couple of occasions in the past where I had to override turbotax to get the return correct. Hated seeing the red typeface on my entries, which was the sign that they weren't supported answers.

Can't even remember what the issue was, and it has been a few years. Nonetheless, just like any other route, if complex, out-of-the-norm issues pop up, the software may not handle it properly.

While it is true, as Gerntz said,

You're responsible for the return. I find it foolish to not understand the work done...

I don't think the law is reasonable in expecting everyone to have the time/interest/ability to burrow into the Code, Regs, and Cum.Bull.--much less the circuit splits on grey areas of the tax law (which may have been where TurboTax failed me). The system can get really complex really fast if you get far afield from straight W-2 and some investment earnings.

 

[nuke_diver]

I do use one and I do check. It has become a discussion point in our house. Our taxes used to be very complicated and we started using a tax prep because my wife did not care for all of the yelling and bad language coming from the office room . And I missed stuff because I did not understand the tax code. So she would prefer to pay someone than to deal with her werewolf spouse....I believe this will change when I ER since I can take my time and am not forced to do it on days off/evenings. I also do not think the taxes are as complicated now and the software handles some of the tax code stuff better than it did 10 years ago

 

[FIYes]

We used a CPA for several years when DH had a business. Before that I always prepared the returns myself. A couple of years ago when I picked up our tax return I immediately spotted an error that would have cost $2000! I waited to talk to the CPA about this. After waiting around for half an hour I spoke to one of her employees. I showed him the error and he didn't understand. I left the return and the next day the CPA called me...yes I was right and they were correcting the return. After that experience I went to Turbotax. The real work is in gathering all the data needed to file.

I have thought that eventually I may need to go back to a paid preparer but my experience has made me gun shy.


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[jebmke]

I don't use an accountant. I did for about 5 years due to ex-pat junk and foreign tax returns. But I checked everything. It is my signature on the return. I do our returns now but I always have someone check it.