Litman Associates Logo
1 (877) GOT-TAXES?

The Advantage of Using A CPA To Prepare Your Taxes Versus Preparing Your Own Returns

Posted on 24, Mar, 2014

If the last few years of global financial uncertainty have achieved nothing else it has created an entire new generation of people who are far more financially aware and astute than the generations gone before them. The ideas of unlimited credit and unlimited ceilings on property values are now a thing of the past, and the world is now enjoying its very own, and very real, financial hangover. People are now more likely to do things for themselves than to hire somebody else to perform those same tasks for them, and using computer software to prepare tax returns is a perfect example of this.

Now the big question here is whether or not you should actually be using software to prepare your tax returns instead of engaging the services of a CPA, or other professional financial adviser, instead. Obviously software packages like TurboTax have come a long way over the last few years, and are now easier to use than ever before, plus there is also the added benefit that these software packages are extremely cost-effective, often costing well under $100.

When you compare these costs to the fees charged by a fully qualified CPA you'll find that on average you'll pay a CPA a few hundred dollars to prepare your tax return. Tax software is also very popular with people who have very small or very straightforward tax returns to file each year because they can complete their tax returns from start to finish in just a few hours. So tax software offers the average Joe or Josephine a cheap and quick way to complete their tax returns, which is why they're are so very popular.

They say that all that glitters is not gold and this is very true of any tax software package. Even the most computer literate person, who is extremely familiar with this type of software, is more than capable of making any of a number of costly mistakes - the kind of mistakes which could result in IRS penalties and other such financial complications. Even the very best tax return software is simply not capable of providing the human input and human judgment that you get when dealing with a trained CPA, and true artificial intelligence is still at least a decade away.

So the reasons you should continue to use a CPA instead of tax software include things like your CPA having decades of experience to draw on, your CPA is capable of and willing to answer any questions you have which are beyond the scope of any tax return software anywhere on the planet. Most importantly your CPA can be there when you need them most, to help you resolve the most complex tax return issues - something a software package can simply never, ever do.

If you consider nothing else when choosing between a human CPA and tax return software bear in mind that more than $1 billion is lost by people who choose to file their own tax returns each year, this amount being due to penalties and not receiving the refunds they were actually entitled to. Unless you are 100% familiar with all current IRS rules then you would be well advised to seek the advice of a CPA before filing your tax return - you could save yourself a small fortune by doing things this way.

« Back to Blog index

English | Русский

© 2023 Litman Associates LLC • Built by Synthesis Creative