Basically speaking, it is not necessary to hire a certified accountant to complete your personal income taxes. For the most basic, joint, family or individual returns, Turbo Tax will more than suffice.
However, businesses or families that have extensive tax situations, or persons who are not comfortable following instructions or calculating the math that is required by Turbo Tax, should consider hiring an accountant.
Covered in this report
Turbo Tax allows consumer to work at their own pace, is confidential between you and the IRS and users are covered in case of an audit.
Turbo Tax employs Certified Public Accountants to answer consumers tax queestions on-line for free. Turbo Tax can be downloaded on-line or purchased in stores. It is less expensive than hiring an accountant and has a free Federal Turbo Tax Edition and free E-filing.
Best for: Consumers wishing to save money on filing and essentially any consumer that falls under one of the Turbo Tax categories, which are designed to meet different levels of tax needs. Turbo Tax is very suitable to the individual preparer who does not have dependents, does not own a large business, or have many assets or charitable giving calculations. Owners of large businesses and start-up companies should employ an accountant.
Before deciding which choice is right for you, consumers who are wondering whether to hire an accountant or to use Turbo Tax to complete this year's tax forms, should understand the difference between a tax preparer and an accountant.
An accountant has an accounting degree, and though he or she has the knowledge base that enables them to complete a personal tax return, it does not necessarily fall under an accountant's job description.
A Certified Public Accountant is certified by the state in which he/she lives and practices. CPA's most often assist businesses with finances, accounting the books and auditing business practices (studies financial practices and relates what changes, if any, should be made).
An accountant also assists start-ups to navigate the rules associated with building a new business. Generally an accountant keeps a business accountable to the rules and regulations surrounding financial responsibility, keeping the business out of trouble. A CPA will also prepare tax returns and is up on tax rules and exemptions that are available through the Internal Revenue Service, for the business.
The Internal Revenue Service utilizes tax preparers on the IRS site and not only accountants, underscoring the fact that an average person can fill out a simple tax form.
Most often tax preparers working for agencies that strictly prepare taxes, do not have a degree in accounting, but are required to pass a proficiency test that certifies them as a tax preparer. Tax preparers are qualified, but you could be just as qualified, depending on your proficiency with numbers, and your ability to comprehend and interpret IRS tax forms.
This in mind, and basically speaking, it is not necessary to hire a certified accountant to complete your taxes. For the most basic, joint, family or individual returns, Turbo Tax will more than suffice. However, businesses or families that have extensive tax situations, or persons who are not comfortable following instructions or calculating the math that is required by Turbo Tax, should consider hiring an accountant.
Hiring an Accountant
Hiring an accountant cost as low as $150 an hour, and as high as $400 an hour. Additionally, some accountants charge a percentage fee on the amount saved as a result of their work. In other words, if the accountant finds a loophole or some other obscure IRS rule that saves you money, then he/she may require a percentage of what that obscure find may have saved you. If you own a business, are a lottery winner or are facing insurmountable tax questions, this is advantageous.
If the consumer is filling out a simple 1040 or 1040 EZ form, and has straightforward, non complicated, basic entries, hiring an accountant is cost prohibitive, compared to employing Turbo Tax and completing the forms yourself.
Turbo Tax claims to save consumers an average of $100 on tax preparation. The site provides step by step instructions; on-line answers to tax questions, (by CPA's) and technical support.
There are four products from which to choose. Consumers can choose which one is right for them.
- Basic-$19.99-for consumers who will file a simple return, like a 1040 EZ, home owners without a mortgage or renters.
- Deluxe-$29.99-for consumers who own their homes and have a mortgage, charitable donations and expenses like childcare
- Premier-$49.99-for consumers that own property and have investments
- Home and Business-$79.99-consumers who are sole proprietor of a business, 1099 contractor, or single-owner LLC
Each Turbo Tax option includes:
- Guaranteed accurate calculations
- Fast return with free e-file
- Up to date forms(up to date on tax law)
- Assurance that taxes are correct
If none of the Turbo Tax options coincide with the needs of the consumer, that consumer should hire an accountant to review and submit tax forms to the IRS.