Accountant or Turbo Tax?
December 30, 2004 1:10 PM   Subscribe

Who should do my tax filing? The accountant who's done my taxes for the last 13 years? Or, should I give Turbo Tax a go? Last year the accountant charged me $450. Turbo Premier costs $69.95. [+]

Seems like an easy choice, but it's more complicated. I own rental property. I've also sold some rental property this year. I have regular employment and I have 1099 income. I've not filed quarterly either. I have tons of receipts, including a box full of at least $1,000 in parking receipts. My office is in my home.

Historically I get a refund. This year I don't know what to expect. I want to save the cost of my accountant, but I don't want to jinx myself either (he has a photograph of himself and Barry Goldwater in his office, he scares me). Should I just pay him whatever he asks? Or, am I a fool because I can do it myself?
posted by pinkkitty to Work & Money (22 answers total)
I've used the web version of TurboTax for the last three years. I've been very impressed with how easy it was and how much data from previous years it auto-fills in for you. The only downside I have seen so far is that the price has been climbing each year (or at least that is the impression I got).
posted by mmascolino at 1:19 PM on December 30, 2004

What's your accountant's track record for the past 13 years? Unless he's a bumbling fool, it sounds like, at the very least, this year's filing may not be the best time to try something new. And if he's top-notch, frankly, I'd stick with him for another 13 years. A good, trustworthy accountant is hard to find. If you need serious help down the road, you'll be glad to have maintained the relationship.
posted by cribcage at 1:29 PM on December 30, 2004

if you have the excel or the openoffice-whatsis-equivalent, why not give this spreadsheet* a try?

for the last 4-5 years I've used it and have also done everything by hand; and this spreadsheet was never wrong.

put in income on the w2 tab (or other schedule tabs, as appropriate) fill in some other stuff, and that's it.

plus, you can just print it out when you're done. plus, the dude keeps adding more useful schedules every year, so it becomes ever more accessible to people with more complicated workings.

if it ends up still being too complicated, all you've lost is a little time.

*nb 2004 version is not available yet.
posted by dorian at 1:41 PM on December 30, 2004

Every year I ask myself the same question.

As someone with 1099 income, etc. in the past I'd stick with the accountant. He'll probably save you the $450 and TT always ends up being more work/stress than I expect it to be.

You could always use this year as a test. Do both and see who comes out on top.
posted by rschroed at 1:42 PM on December 30, 2004

You're paying him so you don't have to worry whether you did it right. Sounds like you have a lot of things to worry about, and that may be worth $450.
posted by smackfu at 1:43 PM on December 30, 2004

If I recall correctly, you can do the on-line version right up to the point of submitting/printing without paying for it, so you can get started, see what a pain it is, and if you decide to go all the way with it, you can still have your account take a run at it, and then see how off the on-line return is from what the accountant is. Then you'd know for next year.
posted by willnot at 1:49 PM on December 30, 2004

I agree with smackfu. Unless your income is straightforward (payroll), it's best to go with the accountant (assuming he's served you well in the past). There's such a thing as false economy.
posted by languagehat at 1:50 PM on December 30, 2004

Rschroed's answer is what I would have said, too.

Use his services this year, but get Turbo Tax as well, and run the figures. If the accountant saves you less than $370 more than Turbo Tax, you're losing money, so use Turbo Tax next year. If he saves you more, use him again next year and don't use Turbo Tax.
posted by Bugbread at 1:52 PM on December 30, 2004

Wow... that's a lot of money.

Question: are you sure your accountant is actually doing the return? A lot will get so busy at tax season that they contract out to places that do nothing but taxes, and then charge far more than the tax firm would have to begin with.

Also, do you see him only at tax time, or does he do things for you throughout the year? If the latter is the case, it might be harmful to your relationship otherwise if you were to do your own taxes this year.

To be honest, I don't know if doing your own taxes for the first time in more than a decade is a great idea when you have so many major changes, and such a complicated return. Just from what you've said, you're looking at a schedule A, C, E, maybe a B, among other things. If you don't do it hundreds of times a year that's going to take a substantial amount of time and frustration.

on preview: what bugbread said. If only to see if the accountant and turbotax come up with the same bottom line.
posted by Kellydamnit at 1:54 PM on December 30, 2004

Um, the $450 is tax-deductible (next year), so it's not really $450; more like $300....
posted by ParisParamus at 2:02 PM on December 30, 2004

Also, my aunt let me use her TurboTax for several years--perhaps you can use someone else's? Or buy it and share? On the other hand, I used the Web version this year, and ultimately, had to snail mail my returns, having had them rejected by the IRS for some technical reason (and the program refusing to let me send them again)
posted by ParisParamus at 2:05 PM on December 30, 2004

I've done rental income/1099s and all that with Turbo Tax and it was very straightforward. Receipts can be a pain in the butt, but if you're collecting them anyway, then the time to add everything up might not be so bad. Give Turbo Tax a try and see how it goes. You might not find it such a nightmare as taxes used to be (before hand-holding programs came along.)
posted by dness2 at 2:18 PM on December 30, 2004

Response by poster: The Turbo Tax site doesn't seem to have a trial offer. It looks like I have to buy it.

My accountant actually does the taxes himself. This is the only time that I see him throughout the year. He was picked as one of the best tax guys in my state a couple of years ago. He asks questions like: "Did you buy flowers for your office?" "Do you have any magazine subscriptions?" The kind of questions that I wouldn't think of on my own.

He's not a very patient man. Two years ago he told me that he wasn't taking any new clients that owned rental property. He said it was a pain in the butt. He seems to know what I need receipts for and what don't.

I think that I've answered my own question. I can't leave him. I will cheat a little and buy Turbo Tax and see how close they are.
posted by pinkkitty at 2:28 PM on December 30, 2004

This is a good plan. One thing to remember: if you can get to your taxes early in the season, you can buy TurboTax, and then sell it on eBay.
posted by weston at 2:52 PM on December 30, 2004

In my experience, you don't (just) hire a tax accountant to simply deal with the paperwork. There are two important factors to take into account in judging whether he's worth the money:

1) His ability to find legitimate deductions that you either don't know about, or don't have the confidence to take. I'm not talking about dicey stuff, but the things you've already mentioned, like magazine subscriptions. A good tax accountant will aggressively ferret that stuff out, and make sure you're getting every deduction you safely can. Unless you're a natural-born accountant, that alone can make the service pay for itself. (It definitely does for me.)

2) Piece of mind. Back when I was doing my own taxes, especially once we moved past the 1040EZ, I just hated that feeling of playing russian roulette on every other item. ("Can I claim that?" "Will it get me audited if say that?") Even if my tax accountant was just saving me _some_ money, with a situation as complex as yours (I own my own business), I totally think it's worth it.
posted by LairBob at 3:38 PM on December 30, 2004

This doesn't really answer the question, but I think it's important as a potentially useful personal anecdote.

I stopped using TurboTax a couple years ago due to their awful response to the bundled spyware/crippleware they forced users to install (google C-Dilla for details) in order to prevent piracy. I went to H&R Block's TaxCut and have stuck with it since, with no complaints. I will never buy another Intuit product due to their colossal screwup.

My taxes are fairly complicated too (S-corps with nonstandard Schedule K's, etc.), but TaxCut's done the job, and the price is right.
posted by aberrant at 3:59 PM on December 30, 2004

I'm a happy TurboTax Web user for years. I like that it keeps my information year-to-year (things like carry-over capital loss deductions, which I can never bother to write down). I can't speak for property, but I have W-2, 1099, S-Corp and capital gain/loss stuff, and it's all pretty straightforward.

Basically, if your issue is whether or not you think you'll "get it" with TT, then go for it. If your issue is deductions, as others have said, then stick with your accountant.
posted by mkultra at 4:23 PM on December 30, 2004

["Piece" of mind...groan]
posted by LairBob at 5:00 PM on December 30, 2004

I have a tax situation something like you, pinkkitty, and I've used TurboTax for the last three years. The software makes everything pretty easy, except for knowing whether your assumptions about grey areas are, in fact, correct. (This year, I'm going to an accountant because my 1099 and real estate transactions are even more complex than last year, when I felt I was in over my head and TurboTax only offered hints of answers to my questions.)

You can put all your information into the online version of TurboTax as a trial, you only have to pay to print out or e-submit your return. At least I vaguely remember that being the case last year.
posted by McGuillicuddy at 5:53 PM on December 30, 2004

Accountant's use Turbo tax Pro.
posted by hortense at 10:12 PM on December 30, 2004

If your accountant gets you a refund even when you don't make quarterly payments, I wouldn't let him go for a million years! (In fact, whats his number??)

Up until last year, I had a service do my taxes. I've been self-employed for years, and until this year, never sent the quarterlies in, so April has always meant writing a huge check, with the service or with the software.
posted by crunchland at 6:35 AM on December 31, 2004

Have used TurboTax then switched to TaxCut, which is far better.
For instance TaxCut did a much better job on advising me on Schedule D (investments) and S-Corp filings (schedule K something). I say go for both and check your accountant in parallel. It's more work, sure, but after this is over you'll know the value added from your accountant.
If nothing else, you can deduct the cost of the software + the cost of the accountant's preparation (clearly you itemize).
posted by nj_subgenius at 2:09 PM on December 31, 2004

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