tag:blogger.com,1999:blog-34866775.post2143922452593288527..comments2023-06-14T06:46:23.844-05:00Comments on Savvy Working Gal: Should You Hire a CPA To Do Your Taxes?Savvyworkinggalhttp://www.blogger.com/profile/08159197609419858161noreply@blogger.comBlogger23125tag:blogger.com,1999:blog-34866775.post-15538600553223137322014-05-03T07:27:57.084-05:002014-05-03T07:27:57.084-05:00Patrice Mills,
Thank you. You've provided a g...Patrice Mills,<br />Thank you. You've provided a great rule of thumb!Savvyworkinggalhttps://www.blogger.com/profile/08159197609419858161noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-56585421862903838872014-05-03T07:27:00.877-05:002014-05-03T07:27:00.877-05:00Harry,
I think you are over thinking this. If you...Harry,<br />I think you are over thinking this. If you are comfortable researching and preparing your own taxes by all means do them. I too think the average tax payer probably could prepare their own taxes, but choose not too. Yes, having your taxes prepared by a professional is costly. For comparisons sake my company (annual sales in excess of 40 million) paid $90,000 to our accounting firm last year. I give up trying to explain the CPA certification. Lets just leave it at there are many CPA's who don't prepare tax returns and never intended to do so. Also several lawyers I know also have their CPA license. Savvyworkinggalhttps://www.blogger.com/profile/08159197609419858161noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-15540708376679251482014-05-03T07:01:34.420-05:002014-05-03T07:01:34.420-05:00Vanita,
When you are self-employed it gets to the ...Vanita,<br />When you are self-employed it gets to the point where your time is better spent elsewhere, you need professional expertise and who wants to spend time determining how much to send in for quarterly estimates.Savvyworkinggalhttps://www.blogger.com/profile/08159197609419858161noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-78269418866096650982014-04-22T12:45:40.362-05:002014-04-22T12:45:40.362-05:00The general rule is that if your income comes from...The general rule is that if your income comes from a singular source and is pretty straightforward, you can do the taxes yourself. If there are multiple sources of income, it's a good bet to hire a CPA just to make sure you're paying the right amount. It's best to pay the right amount every time, not too little for the taxman to come knocking on your door, and not too much that your finances suffer.<br /><a href="http://millscpa.com/" rel="nofollow">Patrice Mills @ MillsCPA.com</a>Anonymoushttps://www.blogger.com/profile/08563786591671609391noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-91431981689955793572014-04-20T17:45:54.910-05:002014-04-20T17:45:54.910-05:00Ok you didn't make me sound too callous so tha...Ok you didn't make me sound too callous so thanks for that :)<br /><br />I do find it odd though that the CPA is such a broad designation. In fact, all but one of the CPA's I know on a personal level do other things than personal tax returns. I'm sure the CPA test was/is very difficult but I only care about the personal taxes part of that test. I could care less if my CPA knows how to do public accounting. So while it may be a 16 hour test, I only care about 2 hours of it right? <br /><br />I'm sure there are a lot of CPA's out there that specialize in real estate(which is what I need) but I guess I did a poor job of finding one. The one I did find that knew their stuff charged $1000. If I spent 20 hours researching/doing my taxes, that's $50 an hour after tax or the equivalent of somewhere around $80-$90/hr at my marginal tax bracket. So basically I got paid double my normal hourly salary to spend 20 hours doing my taxes - I wish more people would think about their money in these terms since there's a huge difference between pre and post tax $/hr. <br /><br />The other two CPA's I met with more general CPA's and charged $300-$500, that's not going to provide much value for me. I would almost equate these types of CPA's to general practice doctors(sorry my fiancee is in med school so I've been using a lot of medical analogies). General practice doctors don't do a whole lot. If a tough problem comes in, they refer you to a specialist. For more routine stuff, most hospitals are starting to give nurses/PA's more of this responsibility because they are a) cheaper and b) can do just as good of a job. <br /><br />Not sure if I made this point clearly or not but I'd either go with a CPA who is a specialist or no one at all and do it yourself.harry @ pf prohttp://www.yourpfpro.comnoreply@blogger.comtag:blogger.com,1999:blog-34866775.post-49870002064578968592014-04-16T11:14:39.744-05:002014-04-16T11:14:39.744-05:00I did my own for years when all i had to do was a ...I did my own for years when all i had to do was a 1040. But the year I married my husband (independent contractor), I realized we would need a CPA. We've been with the same guy for 9 years now. This year wasn't our best year since I'm self employed now too, but he's done really great things for us these 9 years, found expenses I never would have thought of. worth every penny.vanitahttp://bloggingbetties.comnoreply@blogger.comtag:blogger.com,1999:blog-34866775.post-51520292318896136532014-04-10T13:00:13.060-05:002014-04-10T13:00:13.060-05:00Tanya,
Yes, having a CPA we do have an edge on pre...Tanya,<br />Yes, having a CPA we do have an edge on preparing our own taxes. I did a little poll around my office and the majority of my co-workers have someone prepare their taxes. They do this Mostly because they are afraid they will make a mistake or miss out on a big deduction they aren't aware of. <br /><br />Thank you for mentioning my financial perspective. I am trying to find my writing voice by including my financial background into my posts without becoming a personal finance blogger. And you know I love nonfiction.Savvyworkinggalhttps://www.blogger.com/profile/08159197609419858161noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-81793880510640712532014-04-09T12:57:33.605-05:002014-04-09T12:57:33.605-05:00Debt Debs,
Well said.Debt Debs,<br />Well said.Savvyworkinggalhttps://www.blogger.com/profile/08159197609419858161noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-89159213763474447022014-04-08T12:56:21.951-05:002014-04-08T12:56:21.951-05:00Femmefrugality,
I know for a fact one of the CPAs ...Femmefrugality,<br />I know for a fact one of the CPAs I mentioned in my post pays the IRS penalties if she makes a mistake. She did so when she missed something on a friend's return. I'm glad you enjoyed the tax updates.Savvyworkinggalhttps://www.blogger.com/profile/08159197609419858161noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-82029556836096786492014-04-07T21:23:55.256-05:002014-04-07T21:23:55.256-05:00Mel,
That is the worst tax scenario I've ever ...Mel,<br />That is the worst tax scenario I've ever heard. <br /><br />I literally hid at the gym* from a woman who kept asking me how to get her money back from the state of Illinois, I can't imagine 18 states. And $1000 - I can understand though why all those state tax returns. You are right there has to be a better way this<br />is ridiculous. I sure hope you didn't overpay. I'd ask around and find out who your fellow actors use to do their taxes for next year - you are an actress right?<br /><br />* I didn't really hide, but I wanted to. She eventually got her refund money, but it took 9 months. Funny how we never are paid interest when the taxing authority owes us money. Savvyworkinggalhttps://www.blogger.com/profile/08159197609419858161noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-46406612438494736932014-04-07T12:29:39.656-05:002014-04-07T12:29:39.656-05:00Esthetic Goddess,
One more thing - if you are paid...Esthetic Goddess,<br />One more thing - if you are paid via a credit card your clients no longer have to send you a 1099. You will receive a 1099k from your credit card company.Savvyworkinggalhttps://www.blogger.com/profile/08159197609419858161noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-48049878533340004322014-04-07T12:27:10.740-05:002014-04-07T12:27:10.740-05:00Esthetic Goddess,
Yes, being an independent contra...Esthetic Goddess,<br />Yes, being an independent contractor it is wise to use an accountant, especially if you aren't good with numbers. A claim which I would dispute - you just didn't have a teacher who explained math properly, but that is a different post.<br /><br />You will ask your accountant questions on anything you don't understand when they go over your return, right? Also, ask if there is anything you can do to save on your taxes in the future.Savvyworkinggalhttps://www.blogger.com/profile/08159197609419858161noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-74665738203973371382014-04-07T12:23:03.303-05:002014-04-07T12:23:03.303-05:00The Dose of Reality,
Ah the best of both worlds - ...The Dose of Reality,<br />Ah the best of both worlds - saving money using TurboTax and not having to do them either. You do review them of course and understand/ask questions before signing. I'm sure you do!Savvyworkinggalhttps://www.blogger.com/profile/08159197609419858161noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-18955922481328562782014-04-07T12:18:41.037-05:002014-04-07T12:18:41.037-05:00Webb,
Good points. If you are salaried and your in...Webb,<br />Good points. If you are salaried and your investments are fairly simple TurboTax should work fine for you. And why not save $150.Savvyworkinggalhttps://www.blogger.com/profile/08159197609419858161noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-91219818040127843072014-04-07T12:10:53.423-05:002014-04-07T12:10:53.423-05:00Catherine,
I can't help but wonder if your hef...Catherine,<br />I can't help but wonder if your hefty return after getting married is attributed to what you claimed for withholding after you got married. Plus, with the purchase of your condo you may have more deductions due to property tax and mortgage interest deductions. I am a skeptic when it comes to a CPA finding deductions you can't find on your own.Savvyworkinggalhttps://www.blogger.com/profile/08159197609419858161noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-68835985860689561122014-04-06T19:48:20.438-05:002014-04-06T19:48:20.438-05:00Great discussion Savvy! As you know I am a CPA but...Great discussion Savvy! As you know I am a CPA but like you, I am not a tax professional. Yes, I passed the grueling exam but with the ways tax laws change, I am glad to have Turbo Tax to guide me through prep of my family taxes. Ours aren't too complex yet, and I keep them that way on purpose. I would rather err on the side of being conservative rather than looking high risk and subject to an IRS audit. Unless we hit the lottery I am guessing I will be doing our taxes for years to come. One thing my CPA/accounting education did earn me was teaching me how to research tax issues so should the day come, I can always dig into the code more to find my answers. Thanks for sharing with #smallvictoriessunday last week and look forward as always to what you share with us this week. I enjoy the unique nonfiction books and financial perspective you bring to the linkup!Tanya @ Moms Small Victorieshttps://www.blogger.com/profile/17520133909287154535noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-17607014516974342722014-04-06T09:42:21.476-05:002014-04-06T09:42:21.476-05:00Taxes are definitely a specialty area. I'm a ...Taxes are definitely a specialty area. I'm a professional accountant, CMA now changing to CPA in Ontario, Canada, but I hate doing even my own taxes. <br /><br />Accounting can be quite broad, with different niche areas, Corporate Finance, Cost Accounting, General Accounting, Management Accounting, Tax even Treasury has some accounting elements within it. So just because someone is a CPA doesn't mean they know the tax rules.<br /><br />Now if they specialize in tax and your situation is complex, then hire a CPA, be organized, but be prepared to pay the commensurate rate reflective of their training.<br /><br />If you're prepared to do some legwork / research, have a tax software program and the motivation, then you could do them yourself. <br /><br />But let's be clear, you can make an analogy that it is no different than doing your own plumbing / electrical work if minor, homeschooling your kids, writing up your own will if not complicated, self diagnosing your illness if minor. There are risks involved and it is a personal cost/risk avoidance decision.<br /><br />Having said that, just because you do hire a professional, doesn't mean there are not a small % that are not competent. I believe the professional organizations do address these situations. It is very important to the governance, standards and reputation of the members. <br /><br />But we all know stories of poor workmanship, bad teachers, crook lawyers, quack doctors - why should accountants be any different? I think they call them shady. LOL<br /><br />Caveat emptor - let the buyer beware and do their homework!debt debshttps://www.blogger.com/profile/06166825965827672820noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-81828839193973373362014-04-05T22:03:57.455-05:002014-04-05T22:03:57.455-05:00There is gold in here. I had not idea about the n...There is gold in here. I had not idea about the new home office rules! But then again I never use them for the reasons you talk about. I've always thought that it was wrong that clients could get serious audits when they've trusted and paid a CPA to prepare their taxes for them. I kind of feel like the CPA should share some of that financial burden in some way.femmefrugalityhttp://femmefrugality.comnoreply@blogger.comtag:blogger.com,1999:blog-34866775.post-90039598564891865752014-04-05T18:21:11.426-05:002014-04-05T18:21:11.426-05:00My taxes were so painfully overwhelming this year....My taxes were so painfully overwhelming this year. I spent the year out on tour with a show and had W-2s from 18 states. I didn't even know where to begin. They completely freaked out TurboTax when I tried. Then I thought contacting an entertainment CPA would probably be the way to go, but I couldn't find any that would do the project for less than $1000 and considering how much I made last year, that was so not worth it. I wound up using a hybrid of H&R Block and TurboTax to get it done that cost me about $300 and I still owed the government $60 more. <br /><br />I was so frustrated and upset. I really feel like there should be a simpler way to get taxes done that doesn't require outside help. Mel @ brokeGIRLrichhttp://www.brokegirlrich.comnoreply@blogger.comtag:blogger.com,1999:blog-34866775.post-49419907047410910352014-04-05T10:23:19.121-05:002014-04-05T10:23:19.121-05:00I have used the same CPA for over 10 years. I'...I have used the same CPA for over 10 years. I'm an independent contractor and my head shuts off when I start thinking of numbers. I am so grateful to pay a small fee and know my taxes were prepared correctly! EstheticGoddesshttps://www.blogger.com/profile/11585630187737716729noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-91839949486681853962014-04-05T08:43:28.504-05:002014-04-05T08:43:28.504-05:00My hubby does our taxes with TurboTax, and it work...My hubby does our taxes with TurboTax, and it works great! Especially for me, since I don't do them at all! ;) Stopping by from the SITS Saturday Sharefest.-AshleyThe Dose of Realityhttps://www.blogger.com/profile/15778610584517345200noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-16586030599831458782014-03-31T18:03:32.340-05:002014-03-31T18:03:32.340-05:00Was feeling very guilty about doing my own until i...Was feeling very guilty about doing my own until i reached your last paragraph! Have used Turbo Tax for 10 years or more with good results. Our taxes are very simple, but just going thru all the paper formscan takea long time.<br /><br />It seems to methat if oe is mainly salaried with simple investments taxes are not awful with TT, buti do them early. Had my refunds by Valentine'sDay.webbhttps://www.blogger.com/profile/15168174623602308906noreply@blogger.comtag:blogger.com,1999:blog-34866775.post-65957494108527850432014-03-31T17:04:58.833-05:002014-03-31T17:04:58.833-05:00for most of my life, my mom did my taxes. she'...for most of my life, my mom did my taxes. she's an accountant, not a cpa. she has always said that taxes are easy and anyone can do their own taxes. then when i got married, i started using my husband's CPA who got me the biggest return i'd ever seen. he charges a hefty fee, but totally worth it! word is he used to work for the IRS.Catherine Gacadhttps://www.blogger.com/profile/15869966205258293567noreply@blogger.com