Thursday, April 03, 2008

Tax preparation: CPA or CPU?

There have been a number of comparos in the press lately. Should one use a human accountant, TurboTax or a service such as HR Block?
First off, it should be obvious that the answer depends on your employment/job situation. If You're self-employed, business owner, freelancer, contractor, etc, you most likely would benefit financially and perhaps professionally by using a trusted CPA.
But if you have a "regular" job where you get a salary and your real estate consists of only your own home TurboTax should definitely be the first option. There is no math involved. The hardest part of the whole process is getting your records organized, which is something you would have to do for an accountant or H&R BLOCK anyways. Then all you have to do is follow the instructions and basically type in data from your various tax forms and receipts. The only drawback is that as you go through the step-by-step process, you'll probably find that a lot of the questions don't apply to you so there's a lot of pushing the NEXT button.
Benefits:
- TurboTax is 100% online. If you get tired of working on your taxes, you can log out and pick up where you left off.
- Federal and State taxes are filed for you electronically when you're done. (If for some reason you want to print out the forms and mail them, you can do that too.)
- Your records are stored online and you can save and/or print copies of the forms at will.
- When you use TurboTax for the SECOND time, huge time savings are realized because data entry is reduced (address, SSN, tax staus, etc are all saved from the previous years' session).

New York magazine and Gizmodo (below) have CPA vs. Turbo Tax showdowns while Cnet has a generally favorable (8/10) review for Turbo Tax
New York Magazine
Cnet
Gizmodo

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