As governance of taxes becomes stronger, more and more people are now being held accountable for filing their taxes. It has now become critical for individuals and companies to maintain their tax record and be vigilant in paying their taxes.
TurboTax VS CPA
In order to facilitate tax payers, there are a number of tax software applications available in the market now. TurboTax is one of the software applications that can help automate the process so you don’t have to stress about your taxes.
TurboTax allows you to make your tax returns and file your taxes online. It is an extremely simple to use software application which allows you to take a snapshot of your Wage and Tax Statement and feed it to the software. The rest is done by the software right in front of your eyes. TurboTax has been powered to pick up information and auto-fill the tax forms with information retrieved from the snapshot. All you need to do is verify your credentials and overview the filled form.
This online system can easily be accessed from your laptops, smart phones and tablets. User friendly formats have been made available by TurboTax so you can conveniently get your taxes done on time. When you log-in, you will have several options available for using TurboTax; you can choose to continue with the free trial, just to get the feel of the software application. Otherwise you can choose:
- The deluxe version which helps you in maximizing your tax deductions
- The Premier version which helps you with your investments and rental property
- The Home & Business version, which is ideal for self-employed and small business owners.
If you don’t want to do your taxes online, you can hire a Certified Professional Accountant (CPA) to do your taxes. You would need to provide the relevant information to the CPA and he would take care of calculating and filing the tax return for you.
Both systems sound easy, however if you begin to compare the two, there are some hidden benefits that a CPA offers, which you may not get with Turbo Tax, and vice versa:
- Hiring a CPA would save you time because they would be doing the work for you, whereas in TurboTax you would be doing the work yourself
- However, if you are someone who likes better control, TurboTax should be a better choice for you
- Your satisfaction with the entire process would depend upon the rapport you are able to build with your CPA and their performance, while with TurboTax, emotions don’t come into play
- Your CPA and TurboTax would both definitely guide you regarding the deductions you can claim, however, TurboTax may be a little more persuasive about you using them.
- TurboTax costs lesser than hiring a CPA (who would normally charge you on a per hour basis)
- With TurboTax, you can retain electronic versions of your returns filed and retrieve them whenever required
- With TurboTax, you can create scenarios by playing with the deduction claims and see how it effects the final amount of tax
- If you avail TurboTax Audit Defense function (which costs about $40 extra), in case an audit query is raised on the tax filed by you, TurboTax will assign an account representative to deal with IRS concerning the audit objection. On the other hand, your CPA will only defend the calculations in front of the IRS and that too for an extra charge. You would need to justify the deductions yourself and defend why you claimed them
- TurboTax allows you to keep your financial information to yourself, while if you hire a CPA, you would be discussing your financial information with them
Going with a TurboTax or hiring a CPA is dependent upon your personal preferences and whether you want to save time and effort or you want to save cost and retain better control on your financial details and your taxes.