Tax Software vs. Tax Professional?
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I am comfortable doing my own. Do you think you get a larger tax return from using a tax professional?
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Answer:
Actually if you keep good records, such as an excel sheet of all your trades and broker statements of when you bought and sold each share of stock or portion of, and the accountant doesn't have to calculate each and every single one to figure out the profit or loss. And you keep good records of your business, then basically you have done half of the work that a tax professional would do Each one of those trades have to be put onto a Schedule D individually, short term, long term, dividends re-invested or cash? Are there any carryback or carryover capital losses? How far back? Depreciation on assets on your Schedule C. Have you kept a good record of all of your assets and what you have depreciated so far? Auto worksheet for your business. If you really keep good records, then your fee for a professional will not be as high as if they have to sit there and add everything up. The more work that you can do at home to add everything up, and have (key word here) verifyable records that the tax professional can maybe spot check, then you should have quite a bit of savings on your tax preperation fees. It depends on whether you are talking of getting back a 200-300 more back or several thousand dollars back. If you think that you may get only a few hundred back, then that's almost the cost of a good tax preparer. But if you think that you may save thousands of dollars then it would be worth you while. Try it once, to see what the difference would be. The most you're out is 200-300 bucks one year and you can deduct that on your tax return the next year anyway. A good tax preparer not only just prepares the tax return but stays current every single day with tax laws that have gone into effect that may affect your particular return. There is no way that one person can possibly know all of the tax laws as they change and are challenged everyday in court., but we have access to an up to date tax law library. So you just have to know where to look.
David at Yahoo! Answers Visit the source
Other answers
My accountant told me a story.... A client came to him one day and said, "If i don't get audited once every 3 years, then you're not doing your job!". Moral of the story...nothing is illegal unless you get caught. If you do, you can always negotiate with the IRS for less than what you owe. this of course assumes you have a tax professional who can represent you. IMO, go with the tax professional. I've used the software, but it can't replace human "creativity"
sirkater
The short answer is "yes", but the right question is this: "At what point does the increased return outweigh the increased expense?"
Mike S
Depends on how complicated your return is. I use a professional, but my return ends up being about 1/2 inch think.
jpr302001
if you feel ok about doing it yourself then why pay someone else. on the other hand it may be better to let a professional do it. the risk is yours to take. honestly, the more complicated, the more you probably need a professional unless you really know what you are doing. i am a tax professional.
little debbie
NOT enough information to tell. With a simple return, probably little difference. To say you're comfortable doing your own suggests that. Think about taking a tax class by Jackson Hewitt or Block next year, and find out all the stuff you don't know. Sometimes you don't know what a question is asking, or what your answer means. Be sure to get yourself a Pub 17 (free) from the IRS (irs.gov) and read the relevant sections.
chatsplas
It is impossible to tell. As a generalization, the more complicated your return is the more likely a professional will save you money.
wartz
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