Saturday, December 18, 2010

Turbo Tax vs. Tax Professional - Revisited

Althouse thinks you should purchase TurboTax to do your taxes; I say otherwise. (Hmmm. Both of us seem to have a profit motive for our positions in the debate. Well, consider the merits of my argument while discounting my motive and do the same for Althouse. I still win.)

Price seems to be the biggest factor for those who favor TurboTax. (Which is a pretty good program, don't get me wrong. Just ask Tim Geithner, Treasury Secretary, who able to manipulate it into preparing a false return for him.) If that's the case for you, here's my number 2 reason in my Top 10 list of reasons to hire me:
Price isn't everything is it? Cost is. What will it cost you to use TurboTax to do your tax return rather than me? Let's see, there's the cost of the software, the computer to run the software, the time you spent learning the software and inputting the information, and the potential cost you'll have if the IRS has a question about your return. And make no mistake, the IRS is questioning more and more returns. You'll have to take time to respond to any IRS inquiries and should the IRS take a hard line - something they seem to be doing more and more nowadays - you'll have to take time to research and respond to that. That's all included with my fee. I call that a pretty low cost for a some peace of mind.

Bottom line: forget about the cost of my time; what's the cost of yours? What's your time worth? I'd say your time is worth far more to you than mine.


  1. Spot on, Pete.

    I have had my federal and state tax returns prepared by a CPA firm for more than 20 years. It's been the same firm, although the faces change once in a while. It costs a bit, but the results have been consistently excellent. It helps that the partner in charge of the tax division is a former IRS field auditor.

    Two years ago I thought I'd take the identical information I provided my CPA and plug it into Turbo Tax, just to see if there was a difference. There was. I would have paid more tax had I used Turbo Tax than I paid having the CPA prepare my returns. Quite a bit more, in fact, well beyond the difference in cost between the two.

    My CPA also provides some doggone good tax planning advice when my return is completed, as well as throughout the year, via the firm's quarterly newsletters.

    I'm not going to get the same velvet-glove treatment from the IRS that Timothy Geithner got, should I ever be audited. On that occasion, I want a CPA sitting in the IRS office with me, not some inert diskette.

    The thing about (Law Professor Ann)Althouse's recommendations that seems missing is her not telling us to use one of those cheap-o online law firms for our legal needs. Gotta keep those lawyers cranking out billable hours, I'd guess.

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