Anyone use a CPA this year for taxes?

[Dvoll]

This year was the first year I decided it was time to let the professionals handle my taxes. In 2011, I changed jobs, got married, bought a home and I also knew I would able to claim my step daughter in filing my taxes. Needless to say I thought it was time to let someone else deal with all these changes I had last year. (All good changes, 2011 was a memorable year)

Anyway, I felt like I may have paid too much for CPA (7 hrs x $120/hr = $840) but I will be getting almost $10K back from the IRS.

I must note that almost half of the time was spent reviewing my 2010 and 2009 returns for possible errors. Next year it should be at most half of the time since everything will be on file.

For reference, I'm 31, Married, home owner w/ 217K mortgage, 150K/yr+ income, 2 step children, my first baby expected in Nov 2012.

Hardly anytime to do my own taxes, and turbo tax although cheap, I think misses alot.

[NetSkyBlue]

This year was the first year I decided it was time to let the professionals handle my taxes. In 2011, I changed jobs, got married, bought a home and I also knew I would able to claim my step daughter in filing my taxes. Needless to say I thought it was time to let someone else deal with all these changes I had last year. (All good changes, 2011 was a memorable year)

Anyway, I felt like I may have paid too much for CPA (7 hrs x $120/hr = $840) but I will be getting almost $10K back from the IRS.

I must note that almost half of the time was spent reviewing my 2010 and 2009 returns for possible errors. Next year it should be at most half of the time since everything will be on file.

For reference, I'm 31, Married, home owner w/ 217K mortgage, 150K/yr+ income, 2 step children, my first baby expected in Nov 2012.

Hardly anytime to do my own taxes, and turbo tax although cheap, I think misses alot.

Turbo Tax isn't as cheap as it used to be! It cost me around $90 this year.

[disneysteve]

I always use a CPA.

[Petunia 100]

This year was the first year I decided it was time to let the professionals handle my taxes. In 2011, I changed jobs, got married, bought a home and I also knew I would able to claim my step daughter in filing my taxes. Needless to say I thought it was time to let someone else deal with all these changes I had last year. (All good changes, 2011 was a memorable year)

Anyway, I felt like I may have paid too much for CPA (7 hrs x $120/hr = $840) but I will be getting almost $10K back from the IRS.

I must note that almost half of the time was spent reviewing my 2010 and 2009 returns for possible errors. Next year it should be at most half of the time since everything will be on file.

For reference, I'm 31, Married, home owner w/ 217K mortgage, 150K/yr+ income, 2 step children, my first baby expected in Nov 2012.

Hardly anytime to do my own taxes, and turbo tax although cheap, I think misses alot.

$840 seems steep to me for a return no more complex than what you described. Where I work (CPA firm), the fee for a return similar to yours would run approximately $300. But perhaps you are in a HCOLA and the fee isn't out of line.

[bjl584]

Yes. This is the first year that I used a CPA to do my taxes. I used to do them myself, but as the years go by my taxes keep getting more complicated. Especially now that I am regularily buying and selling stocks, dealing with capital gains/losses, and dividends. I feel safer having someone else do them. And besides, who has the time to sit down and sort through all that mess anyway?

[jpg7n16]

Turbo Tax isn't as cheap as it used to be! It cost me around $90 this year.

Please tell me that you used some of the discounts first...

http://www.savingadvice.com/forums/personal-finance/64531-turbotax-discounts.html

Oh and I use TurboTax too. My situation isn't complex enough to warrant a CPA.

[disneysteve]

My situation isn't complex enough to warrant a CPA.

This is not directed at anyone here personally - just a general comment.

The problem with TurboTax is that the results are only as good as the data entered.

I have a friend who is an accountant (not my accountant, someone else). I was talking with him the other day and this topic came up and he said a fair amount of his business is straightening out and refiling taxes for people who did it themselves first with Turbo Tax and screwed it up.

Using TurboTax requires you to have some fundamental knowledge of finances and taxes so there are lots of people out there doing it themselves who probably shouldn't be.

[kv968]

This is not directed at anyone here personally - just a general comment.

The problem with TurboTax is that the results are only as good as the data entered.

I have a friend who is an accountant (not my accountant, someone else). I was talking with him the other day and this topic came up and he said a fair amount of his business is straightening out and refiling taxes for people who did it themselves first with Turbo Tax and screwed it up.

Using TurboTax requires you to have some fundamental knowledge of finances and taxes so there are lots of people out there doing it themselves who probably shouldn't be.

That's true and nothing would beat going to a CPA. However I find that for the price, TurboTax falls somewhere inbetween paying nothing and doing it yourself (and possibly missing some things) and having to a pay a CPA.

I can't really justify paying a professional to do my taxes since they're not that complex but with all the stock trading and things I may miss, TT helps in that regard. It's a lot easier to import the data, check it over for accuracy and have TT fill out the subsequent forms than me doing it on my own. That within itself is worth the price of admission.

[MonkeyMama]

I think for the vast majority of people, turbo tax is just fine (speaking as a tax preparer). Some things that will add to the complexity are businesses and investments. More complexity? - more help may be needed.

But what I really wanted to say is be very careful about people you do hire to do your taxes. If you can find someone diligent and honest, that is great. But Steve mentioned talking to an accountant who spent a lot of time fixing people's mistakes. We spend a *lot* of time fixing other tax professional's mistakes, ourselves. It has been particularly bad the last couple of years. Be wary and remember that ultimately you are responsible for getting your taxes done correctly.

The price sounds reasonable to me, but OP could likely be paying for a lot of tax expertise that they don't need. There are certainly cheaper tax preparers that focus on simpler tax situations. Which would make much more sense than paying a higher end tax preparer for a lot of expertise you won't ever need or use.

[Mr Nice Guy]

I feel like you paid too much.

I just got through a tax season, helping a CPA prepare taxes.

How much time did you spend face to face with your CPA, or email exchanges?

I assume this is your first year with them?

If you are a first year client it will take extra time just inputting your basic info, (i.e. name,address,ssn's, children.)

Existing clients typically have the same jobs(w-2), same banks (1099-INT,1099-DIV), same brokerage (1099-B) so you really need to factor that in too...

[elessar78]

I've used one for the past four years, since we got married. The first year we were married we lived in two different cities, worked in a third before we were married. After, we moved to a completely new state, got two completely new jobs and I had a side business to boot.

In retrospect, I would say it has been well worth it because we've had to contest some of the old states we lived in asking for back taxes. But we paid taxes to a different state, so we are covered. And multiple instances of the states claiming we underpaid the first year of marriage when we lived places partially. States are so broke that they are going back through old filings and looking for discrepancies trying to find a buck anywhere they can. I just give the notice from whatever tax body is asking us to pay, give it to my CPA and he drafts a letter, and the whole thing goes away or we're asked to pay a nominal amount (which we actually owe).

This year my return cost $96 to prepare. So I guess not much more than TurboTax at retail price!

[dawnwes]

Yes. We use a CPA. My husband is a CPA and he does our taxes. He would be too expensive to actually hire though.

[KTP]

No way I would trust a CPA or regular tax professional to have done my taxes this year.

I took the H&R tax course recently and saw the type of people taking the class. If your return is a 1040EZ, then yeah, maybe.

I used a $30 copy of Tax Cut and about 3 years experience from reading forums, investing sites and IRS tax documents.

I had option straddles, Roth conversions and recharacterizations, business expenses and depreciation, plus depreciation recapture, employee stock options with an incorrect basis reported on the 1099-B, and over 350 individual stock trades, many of which resulting in wash sales that had to be calculated across separate accounts. The biggest pain was our Wells Trade account which did not have the capability to export a TXF file like my OptionsHouse account did. This resulted in having hand enter the 90 odd individual trades by hand on the Schedule D worksheet. Another annoying thing was Wells Trade had incorrect information on the 1099-B for several wash sales on the papers they mailed out in Jan...they sent out corrections in Feb, then corrected corrections on March 6, but when I found errors on these and checked the website, I found March 19 pdf 1099-B that was a corrected corrected correction!

So yeah, I would not trust anyone but me to do my taxes.

Edit: There is one tax item I catch that I am fairly certain 90% or more of other employees at this company miss. Every three months you can participate in a ESPP plan to purchase a small amount of company stock at a slight discount (10%). The discount amount is actually reflected on your W2 as ordinary income and federal tax is taken and reported on the W2. The brokerage that manages the ESPP reports the stock when sold as having a basis based on the discounted price, when the actual basis is FMV on the day of the ESPP purchase. It isn't a huge amount of money, around $700 a year in extra tax you would pay if you use the figures on the 1099-B that I bet any regular tax professional would use if given to them by a employee, but if you multiply that by my estimate that 90% of the 70,000 odd employees are making this $700 mistake, then that is an extra $44 million in federal tax being overpaid by just this one group of employees each year.

[disneysteve]

No way I would trust a CPA or regular tax professional to have done my taxes this year.

I took the H&R tax course recently and saw the type of people taking the class.

I'm not following your logic here. What does the type of people taking the H&R course have to do with CPAs? It isn't the CPAs taking the H&R course.

[KTP]

I'm not following your logic here. What does the type of people taking the H&R course have to do with CPAs? It isn't the CPAs taking the H&R course.

A CPA taught the Block course I took, and had never heard of Roth recharacterizations (I asked after one class since I had recharacterized two failed Roth investment accounts). They also knew little to nothing about how the IRS handles straddles, or how the basis of a stock is affected by an assignment of a cash secured put.

I did not mean to lump all CPA into this category though...I bet MonkeyMama could knock their socks off