Hey Tim Nelson, can I just use Turbo Tax or another software to file my taxes? Why should I pay you to do what these programs do? I can do it myself right?
As a CPA, I have heard these questions a countless number of times. My answer to these questions may surprise you though. I usually respond, “Yes you can use them, and yes you can do it yourself.” However it is the “why should I pay you” question, that I like to explain in more detail.
Let me start out by telling a story. There was a barber who had been in the community for a long time. He was selling haircuts for between $20 and $25 dollars. He was getting steady business, but one summer a Supercuts moved in. Once he saw their sign advertising five-dollar haircuts, he started to worry about his business. However, after further examination, he realized this was good for business. He was keeping his usual clients and he decided to put a sign in the window saying, “We fix haircuts for $5.” He noticed that many of the customers would come out of the Supercuts and be frustrated with their haircut. Yes, they got their haircut, but they also got what they paid for.
Being a CPA, is the same. When these tax-filing programs came out we all worried a little bit about how it would affect our business. However, after a short time we realized there was not personal touch with these programs and often times they were not doing a complete and accurate job. Do not get me wrong, if you work at one job, and don’t have a business and you do not have a lot of rentals or property, then using one of these programs is fine. Using these programs when you have a complex tax return is not a smart decision.
Working with a CPA, will not only save you time but save you money too – tax dollars! We will help you find extra deductions. The programs are set to ask you certain questions. They are not programmed to ask follow-up questions that may uncover more deductions and reductions for you and your business.
A scenario that I’ve seen time and again is a client who decides to use a retail tax software program to save some money, but whose tax return is complex. They complete the return with the software and file it, but then they receive a notice from the IRS a couple of months later. The return was brought to the IRS’s attention because the questions asked by the software weren’t answered correctly by the user and inconsistencies were created in the return. Once you have the attention of the IRS, it can become difficult to explain yourself and answer their questions to resolve the situation
When it comes to filing your taxes, you need to determine whether your taxes are simple or complex. If you know your taxes are complex, or if you find yourself preparing your tax return with retail software and you can’t answer the questions that it asks with absolute certainty then you should consult a CPA. We are always here to assist you when and if you make a mistake and receive a notice from the IRS, but as with most things in life, it’s a lot easier and less expensive to do it correctly the first time!