Tax-Prep Software is Good, But Taxpayers Still Need a CPA
Tax columnist Tom Herman called Intuit Inc.’s TurboTax and TaxCut, by H&R Block Inc., “impressive and remarkably easy to navigate.” But he also spoke with tax preparers who say that some people zip through the process too quickly without fully considering every tax-saving opportunity.
About 40 percent of American do their own taxes, but taxpayers with a complicated financial life or a home business will want to consult with their CPA.
“Unless you have a reasonably straightforward situation, you've got a financial risk in doing it yourself — even with the help of consumer software," said Claudia Hill, owner of Tax Mam Inc. of Cupertino, Calif., in the Wall Street Journal.
Another option is to do it yourself, but have a professional review your return to see if there’s anything you or your software program missed.
Herman recommends TaxCut if your tax situation is fairly simple; TurboTax for more complex issues. He especially liked being able to download the information on the W-2 form from his employer. TaxCut doesn’t have that feature.
USA Today came up with similar results in its test drive of the two products. TurboTax is more expensive, and the extra money is worth it if you’ve got investment returns, self-employment income or complicated deductions. Turbo Tax Deluxe costs $74.95 to prepare and e-file a federal and state return. TaxCut’s top-of-the-line package is $59.95 for the same services in addition to audit support and one free consultation with a tax professional, the newspaper reported. Online versions are cheaper.
Consumer Reports also tested both programs: "For ease of use and more comprehensive information, we lean toward TurboTax. But TaxCut is nearly as convenient and costs less.”
Remember that you can file free. If your income was $52,000 or less in 2006 and your tax situation is fairly straightforward, get free federal tax-prep and filing services online at www.irs.gov and click on “2007 Free File.”
Number of comments: 3
AccountingWEB.com Feb-22-2007
Categories: News Archives
Times read: 4653
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RJ Goodman , Mar-1-2007
Maybe not just a CPA I couldn't agree more with your comments about tax prep software, having fixed more than a few self-prepared returns and fielded many "interesting" questions from users of tax-prep software. Having just completed course work towards a CPA designation, I agree wholeheartedly that CPA's are the experts when it comes to accounting issues, but it's a pretty broad coverage. While some CPAs do specialize in and have a remarkable mastery of taxes, in my experience, many CPA's strengths lie elsewhere. Please also consider an EA for tax-related issues -- while they do not, by definition, have the background in accounting that a CPA does, they do specialize in taxes, and demonstrate that mastery by passing a two day test, which, unlike the CPA exam, focuses entirely on taxes. RJ Goodman, EA, California |
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Chuck McCabe , Feb-27-2007
Taxpayers Don't Always Need a CPA, They Need a Tax Professional The 2/27/07 accountingweb.com article titled, "Tax Prep Software is Good, But Taxpayers Still Need a CPA," is biased in that it fails to recognize the fact that Enrolled Agents and many unenrolled tax professionals are very capable of providing highly-competent tax services, and that many CPAs who do not specialize in individual and small business tax preparation are not qualified to provide competent tax preparation assistance. Chuck McCabe, Chairman, National Alliance of Tax Business Owners. |
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Virginia Jarvis , Feb-22-2007
consulting a licensed tax specialist In his article assessing tax prep software, nowhere does WSJ's Tom Herman say taxpayers must consult a CPA. In fact, he quotes enrolled agent Claudia Hill. So why is it that AccountingWeb's take on the article is that taxpayers "...will want to consult with their CPA" -? Why not an enrolled agent? They're tax specialists. Consulting a licensed tax preparer is always a good idea -- please remember that includes enrolled agents. Gigi Jarvis |
