Were you afraid to prepare your return this year? Who do you trust to prepare your taxes? Can you trust the IRS? No! Recently the Taxpayer Advocate Service called the IRS toll-free helpline regarding the dependency exemptions and all the answers were wrong!
Can you trust me. I have over 35 years experience. See my credentials. See the thank you notes from my tax return clients.
What do others advise? See The 5 Types of Tax Preparers: Which One Is Best for You? by The Motley Fool.
Anyway, here are my thoughts.
Seasonal preparers like H R Block. There is variable expertise among seasonal preparers, so you have to judge each one.
How about TurboTax? TurboTax is no guarantee that you will get your return right. Don’t believe Turbotax claims that you don’t have to know about taxes to use it. Among my clients are several lawyers using TurboTax who made expensive mistakes. They paid thousands of dollars in excess taxes incorrectly. I likewise prepared tax returns for an accountant in a Fortune 500 company who could not understand how to use Turbotax to report a rental property.
TurboTax does not protect you from penalties. The Tax Court has upheld 20% penalties against several taxpayers who substantially misreported their taxes using Turbotax. The Tax Court said that using Turbotax “is no defense to accuracy-related penalties under section 6662.” Bulakites v. Commissioner, T.C. Memo. 2017-79 (2017).
What about your trusty CPA?
Like seasonal tax preparers, the tax expertise of CPA’s varies. Of course, CPA’s have to pass the CPA exam. However, only about 25% of the CPA exam is on tax matters. Many CPA’s spend most of their time dealing with financial accounting. I do tax preparation for CPA’s.
Tax Attorneys Tax attorneys like me are generally regarded as the ultimate tax experts but are thought to be too expensive. See the Motley Crew article. Yet my fees are competitive because of my experience in taxes. I don’t accept clients unless I can save then far more than I cost them.
Can you have your cake and eat it too? Can you get a better deal on a tax pro? Sure. For a lower fee you prepare your return that you prepared with Turbotax. I then fine tune the return using Proseries Professional software and my Tax Mastery tax planning software. With Tax Mastery I prepare a written memo that tells you how to achieve the lowest legal tax bill. So you get the best of both worlds. I can use the same process on a return prepared by my client’s CPA. This service is more expensive because I must input the numbers.
If you have a business, I advise you to hire a tax professional. With a free 1/2 hour consultation, I will give you a taste of professional tax planning.