All posts by Shams Khan CPA, CFP

Relocating? How to Notify the IRS About a Change of Address

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In the event that you are moving out of your home to a new place, it is a good thing to notify the IRS (Internal Revenue Service) and any other state tax organizations if you eventually move.

Notifying the IRS about a change of address is not a difficult thing to do. Simply download and fill Form 8822, Change of Address. This one-page form is simple to fill out (all necessary instructions are added on the second page, in the same file).

One of the advantages of applying for a change of address is that, whenever the IRS needs to send you a notice or message, the mail will go directly to the new address.

Whenever the IRS agency gets information about a new address, they will revise their records to reflect an individual’s new address, even if the individual didn’t file a Form 8822. This can occur, for instance, whenever a taxpayer files a return indicating a new address, or whenever the IRS gets information from the USPS (United States Postal Service) showing a new address.

Generally the IRS updates their records in 45 days of receiving the information about a new address, though this phase can be delayed all through the hectic filing season.

 

Tips for guaranteeing an easy change of address with the IRS

  • Ensure that you fill a change of address form for every single type of tax return you wish to file: for instance, gift tax, estate tax, personal income tax, or business tax returns.
  • Try as much as possible to delay the filing of an income tax return should in case you plan to relocate sooner than later. With this means, you can file your tax returns making use of your new address, and then your refund check will be delivered to your new address.
  • Couples who are thinking about separating should individually file a change of address form even if it is only one individual that is moving to a new address. By doing this the IRS will be able to find each taxpayer in person.
  • Ensure that you let the United States Postal Service know of your change of address so that every refund check or letter from the IRS are sent to your new mailing address.

Tax Tips

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The Forthcoming Tax Season – Tips on How to Get Prepared

The tax season is fast approaching and consider yourself lucky if you’ve already filed your previous taxes. So, why then should you still consider your present taxes? The fact is that, whatever you do all through 2017 will only reflect in your tax refund whenever you file your tax in 2018.

We are not expecting you to jump into the forthcoming tax season without adequate planning, so we have outlined 6 useful tips to help you get prepared for the forthcoming tax season and make certain that you get your biggest tax refund by next year.

6 Useful Tips To Get You Prepared For The Forthcoming Tax Season

  • Stay Organized:

As you have filed your taxes, don’t make it difficult on yourself and stay organized for the coming year. Create a folder of important records and financial documents for today, which would help you have a quick nice start during the forthcoming tax season. In the event that you’re self-employed you can make use of QuickBooks Self-employed to track your earnings, expenses, mileage easily and also take record of your receipts throughout the whole year.

  • Think About Reviewing your W-4 Withholding:

Did you receive a huge tax refund? You might want to consider regulating your withholding. What is withholding? This is the tax deducted from your salary by your employer. In order to update them, just re-file your W-4 form with the division in charge of your payroll. You can decide on when to review it anytime you want all through year.

  • Reduce Taxable Income by Donating to your Retirement Funds:

Lower your possible tax liability for the forthcoming tax season by setting up plans and preparing for your future retirement. Should it be that you donate to a 401K or a Traditional IRA, you’ll be entitled to have a dollar back for tax dollar reduction in your income.

  • Donate to Charity Organizations Before the Year Ends:

Reaching out to charity organizations or donating items can lower your tax burden in the forthcoming tax season. There are many ways you can value and keep track of your charitable contributions or donated goods all through the year, one of them is TurboTax. This app will help you track and value your donations accurately and easily transfer the pertinent information into TurboTax whenever the time comes for you to file.

  • Register for Healthcare if you Faced a Tax Punishment the Previous Year:

Should it be that you faced a tax punishment last year because you don’t have health insurance, you should quickly signup for a Marketplace plan before the deadline (January 31st) unless you’re faced with a serious life event. Only this way will you be able to avert a tax penalty by next year.

  • Update financial details in the Health Insurance Marketplace:

In the event that you bought a Marketplace insurance this year in this Open Enrollment period and got a tax credit to assist you pay for coverage, always remember to update your financial details in the Marketplace all through the year. This will make certain that you are receiving as much support as you are entitled to get and also assist you to avert any kind of additional tax credits (which you are not entitled to) next tax season.

The Scariest IRS Scams – Learn How to Avoid Them

 

We’ve started to consider income taxes as those 1099 and W-2 forms move in. The criminals out there have also started to think about upgrading their scam techniques. This article would serve as a guide on how to determine if the person calling is truly an IRS agent or a criminal, as this happens to be the most common means of scamming people.

  • First assume it is a scam: The IRS does not call people asking them to immediately pay their taxes, instead they will send a message to you via mail. In the event that you truly have taxes due for payment, it’s best you call the IRS with this number: 800-829-1040.
  • Quickly end the call: Try as much as possible not to connect with the caller. Don’t give out any form of detail; doing this will only expose you to additional fake calls. The best thing to do is to end the call.
  • Report the occurrence to the IRS: If you were contacted via phone call, quickly report the event to this number: 800-366-4484 (United States Treasury Inspector General of Tax Administration). If you were contacted via email, you should forward the message straight to the IRS using this link: phishing@irs.gov

We believe these few simple tips will help you stay safe from the criminals.

The Internal Revenue Service (IRS) and the Treasury Inspector General for Tax Administration (TIGTA) continue to receive reports from taxpayers saying they got false calls from people ordering payment while deceitfully claiming to be an IRS agent.

Statistically TIGTA has recorded over 90,000 complaints via their telephone hotline, till this very moment, TIGTA has recorded about 1,100 victims of scam who have mislaid an estimated $6M.

John Koskinen, an IRS Commissioner stated that “there are obvious signs that warn about these scary scams which persist at high levels all through the country. He went ahead to add that “taxpayers should not forget that their first IRS contact will never be a call from nowhere, but via official e-mail messages sent to your mail. Flag off all angry and threatening calls from individuals claiming they are IRS agents and demanding quick payment. This is never how the IRS operates! You should quickly end the call and contact the IRS or TIGTA”.

In addition, it is very essential for taxpayers to understand how the IRS operates. Take note that:

  • The IRS will never demand that you use a certain payment system to make tax payments
  • The IRS will never ask for information of your debit card, credit card, or prepaid card over the phone
  • The IRS will never demand instant payment over the phone and will not immediately take any enforcement action after a phone call. Taxpayers normally get early notifications of IRS enforcement actions.

 

Potential victims of phone scam may perhaps be reminded of their overdue taxes that must be paid to the IRS immediately or they’re entitled to huge refunds. In the event that they failed on the first try, oftentimes the criminals call back using a new technique.

Other features of these scams consist of:

  • Scammers might be able to narrate the last 4 digits of your Social Security Number.
  • Scammers make use of false IRS badge numbers and names. They usually make use of a common name and surname to identify them.
  • Scammers manipulate the IRS toll free number to make it look like it is the IRS truly calling.
  • Scammers from time to time send out false e-mail messages to few victims to assist their fake calls.
  • Victims sometimes hear noise of other ongoing calls on the background being conducted to imitate a call site.
  • After intimidating and frightening victims with license revocation, arrests, jail time and so on, scammers end the call and soon someone else calls back claiming to be from the police and the caller ID backs their claim.

You should be careful with the fraudsters! In case of any call or message that appears false, you should contact the IRS or TIGTA immediately.

Don’t fall victim! Help the IRS and TIGTA apprehend these crooks!

IRS Extends Tax Deadlines for Hurricane Irma Victims in Florida

 

 

 

 

The IRS (Internal Revenue Service) is extending the tax deadline for victims of Hurricane Irma in Florida up until January 31st to file certain business and personal tax returns and also to make their tax payment.

The IRS stated Friday that contains an added filing extension for the taxpayers with applicable extensions that ends on October 16th, and also businesses with extensions that ended just few weeks ago which was on September 15th. The IRS stated that it is giving the extended deadline to any county selected by the Federal Emergency Management Agency, as being eligible for either public assistance or individual assistance in Florida.

The tax release program will hold back a number of tax payment and tax filing deadlines starting from September 4th, 2017 in Florida. Due to this, the IRS is offering individuals and organizations that are involved in the hurricane disaster until January 31st, 2018, to have their returns filed and pay up any taxes that are due within this period.

Are you aware that:

  • Without the extended deadline, victims of hurricane Irma who pay their taxes quarterly would have been confronted with the deadline last week Friday which was September 15.
  • The new date, approved to victims of Harvey as well, applies to inhabitants of declared disaster counties.
  • People rendering relief efforts and those who depend on documents found in affected places should call the IRS if they’ll make effort to file on time.

 

This exercise is simply giving taxpayers that are affected by Hurricane Irma an official pardon from meeting some filing deadlines.

In addition, in the event that you filed your returns for an extension in 2016, the due date for receiving your paperwork is pushed back to January 31st rather than October 16th. If you’re in debt to the IRS, you will still be faced with a late-payment consequence and interest, because the 2016 payments were expired few months back, on 18th April. The deadline extension also applies to persons and businesses affected by Hurricane Irma.

 

Places within Florida Affected by the Hurricane Irma

The Internal Revenue Service (IRS) stated that areas within Florida that are affected by the Harvey will benefit from this program. These areas include:

  • South Bay
  • Moore Haven
  • Lake Harbor
  • Clewiston
  • Pahokee
  • Canal Point
  • Pahokee
  • Brevard
  • Monroe
  • Palm Beach
  • Lucie
  • Pinellas, etc.

These and many more counties are currently qualified for deadline and tax payment reprieve. Check the Federal Emergency Management Agency list updates for added areas that are qualified for disaster support, taxpayers residing in those areas will also be added in the IRS action.

If you are a taxpayer residing outside the affected area but you depend greatly on paperwork coming from the area affected by Hurricane Irma, you should call the IRS immediately and you can also get an official pardon on future deadlines.

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TOP 10 BEST SMALL BUSINESS FIELDS TO BE IN FOR FLORIDA

Are they any lucrative business opportunities to begin with small capital in Florida? Florida happens to be a state in America. It’s a very big state with a large number of inhabitants which makes it an ideal place for business because of its population. You can find more than enough business fields in Florida which you can invest in with small capital.

 

Top Fields and Investment Ideas to Start in Florida with Small Capital

Among the many things that makes business ideas unique in Florida is that there’s no state or local revenue tax, it has a strong and operational local economy, and also there’s a considerable amount of tourists that visits Florida every year.

 

  1. Visitors/ Tourist guide

There are over 10,000 tourists per year visiting Florida, this is a large number, in the event that you completely understand your way around the city, and can embark on this nice business idea with profitable returns in Florida, you have to be a friendly and sociable person. In Southern Florida, this business is counted among the best part-time businesses [if you’re starting alone], however, if it’s a venture, you can startup full-time immediately.

 

  1. Transport Service

Florida is a busy area due to the amount of tourists that visits. Therefore, much transport service will be required to move both locals and tourists from place to place. You can make good daily income if you own a car plus a valid driving license.

Should in case you’re considering starting as a company, you’ll need to register as a transport company in order to start up this trending business.

 

  1. Translation

Florida is a multicultural and multilingual state similar to most states in America. As a result of this, translation of language is regularly needed and because thousands of tourists visits Florida yearly, a translator is often required to assist translate the language of tourists to the locals and vice versa. Therefore, locals that want to sell to tourists must employ a translator that will assist with the translation for effective communication.

  1. Export Business

Florida has a very big port from where goods can be exported effectively to anywhere in the world. So, whether you’re into food processing, or agricultural practices, and you have knowledge of the strategies involved, you can start up this resourceful small business idea.

 

 

  1. Errand Service

Nowadays, most people are unable to do what they wish on a daily basis because of their tight schedule, due to this fact, they require the help of someone, things like – school pickups, walking the dog, babysitting, etc. Florida is just the right place to get into the errand service business.

 

 

  1. Smartphone Repairs

Statistically, 9 out of 10 individuals who live in Florida have a Smartphone. However the requirement for starting up this business is that you ought to have technical knowledge about Smartphone and how to repair them. Having this number of people, you must agree with me that a day won’t pass by without having to repair at least 10 phones.

 

 

  1. Baby Sitting

The residents living in Florida would cheerfully pay for babysitting job because they do not always have time to stay with or care for their babies. Make sure you don’t have any criminal record before applying to take up this job, because many people run a background checkup before employing you to cater for their child. This creative offline business idea is trending in Key West Florida and is appropriate for women.

 

 

  1. Restaurant/food vendor

Food intake is certain by every living thing and because many of them are tourists and they have a very busy schedule, they don’t find time to prepare some food, so they would gladly pay to eat good food. In case you have a nice cooking skill, you should try operating a mobile food vendor or restaurant.

 

 

  1. Event organizing

As mentioned earlier, because of the busy schedule, many individuals do not always have time to care for themselves, or planning their occasion, and oftentimes people do not have planning skills. So in case you’ve got planning skills, you should put it to test. This wouldn’t cost much, only a few bucks to get your business card ready.

 

 

  • Tutoring

Being a tutor, you’ll have to lecture people on different subjects and topics related to academics. Lectures can be planned during holidays or after school period to assist students do better with their grades. You can offer tutoring service to students physically or online.

 

Note: All these resourceful businesses in Florida are only suggestions; you need to be really dedicated in order to make money choosing any of these 10 top fields.

 

 

AFFORDABLE WAYS TO WEATHER PROOF YOUR HOME

Planning for the winter weather is an awesome approach to green up your resident and organize its energy so that you can always turn down your indoor regulator and save both money and energy this winter.

 

The following are some simple and affordable ways to weatherproof your home for the winter:

WINDOWS:

  1. Ensure your windows are correctly installed:

In the event that you have more established windows, make sure your storm windows are in decent shape and closed properly all around your home. Storm windows help to give an extra layer of shield against the cool winter air.

  1. Include plastic coverings to the inside of the windows:

From the inside of the windows, you can simply include plastic coverings that additionally help to protect old and drafty windows. You can put the plastic cover over wooden blinds, and make sure you put a hole right at the top for easy opening when you pull its cord. If you do this, it allows the sun shine inside the home and helps to warm the home.

  1. Include drapes or shades:

A nice drape or shade helps to protect and draft out cold air from your home, not only through the windows, but also from around the frames. It is essential to properly shut the drapes when night comes due to the cold temperature, and open them throughout the day in order to utilize the energy from the sun to heat up your home.

 

DOORS

  1. Repair leaks and openings around doors

In order to know if your door has opening or not, light up a candle and move it across the door frame in your house. If the light wave unsteadily, then there is a leak, therefore fix the opening with weather stripping or caulk.

  1. Utilize door draft stoppers:

You should consider purchasing a door draft stopper, or you can create one yourself if you are crafty. Place the draft stoppers next to your outside door to help protect the home from drafts that leak in beneath the door.

 

AROUND THE HOUSE

  1. Protect your outlet:

This may sound awkward, but truly many electrical outlets in older homes do not have protection around them. This could be an avenue for cold air or an area that warm air can seep out of your home as they’re basically just an opening in the wall. In order to protect your outlets, buy foam padding that fits easily around your light switches or electrical outlets. Always remember to be careful and follow instructions when working around electricity!

  1. Consider getting a water heater insulating blanket:

By insulating your water heater you can save up energy by lowering heat lost from the sides of the heater by 25 – 40 percent, which will help out in reducing the cost of your energy bills.

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Charitable Contribution Deduction- Obtain a Tax Break for Your Contributions

Reaching out to charity is a good thing to do, however contributions are also a tax deductible expenditure. Charitable donations are just an additional way to reduce your taxes. If you’re considering taking the Charitable Contribution Deduction, always remember that there are some rules to be eligible.

Ensure that the charity organization you’re contributing to is an eligible tax-exempt group: Religious groups like churches, mosques and so on are not mandatory to file for tax-exempt positions from the IRS. However other charitable groups should have attained their 501(c) (3) ranks so that your contributions can be tax deductible in the Charitable Contribution Deduction, despite if it is property or cash. Constantly check the group or organization to make sure your contribution is tax deductible. Should in case they are uncertain, you can visit IRS publication 78 that lists most eligible groups.

Always keep thorough records: Remember to collect a receipt for your contribution always whether it is estimated worth of donated items or cash. Always keep the canceled check should in case you want to issue a check. Should in case you contribute a huge property or item such as a car, house, etc. ensure you collect a letter of acknowledgement showing the value. Should in case the property or item is worth $5000 or more you should get a written review of its market worth in order to take the Charitable Contribution Deduction.

Whenever you make a contribution, create a note which comprises of the name of the charity organization, date of contribution and the worth or amount. In order to take the Charitable Contribution Deduction you’re required to itemize your contributions, so this detail will be helpful.

Have knowledge of the donation limits: You may be unable to deduct all your charitable contributions depending on your income. Generally, the rules below apply:

  • Cash donations are completely deductible up to 50% of your attuned gross income.
  • Property donations are completely deductible up to 30% of your attuned gross income.
  • Properties with appreciated capital gain such as real estate, stocks, jewelry, etc. are completely deductible up to 20% of your attuned gross income.

Be watchful, however. Most organizations are categorized under the 20% or 30% limit even if your contribution is in cash. The charity organization has to tell you which category they are under. Should in case they can’t, you can check their Limits on Deduction area of the IRS publication 526, Charitable Donations, in order to ascertain which category they are in. Should in case you go beyond the limits of the attuned gross income in 1 year, you will be able to put back the deduction up to the following 5 tax years pending when the deduction is finished.

Have knowledge of what isn’t deductible: Donations to some groups don’t make you eligible under the Charitable Contribution Deduction. Examples of such organizations are:

  • Campaigns, political parties, or action committees
  • Dues or fees paid to labor unions, professional organizations, or business groups.
  • Donations to country clubs or homeowners associations.
  • Contributions to commercial hospitals or schools.
  • The worth of your time, energy, or income lost as a result of time contributed to a noncommercial.

As soon as you have understood what is deductible and have done all your paperwork, how to file the deduction should be the next line of action. Quite a few forms may be drawn in, depending on the worth of your donation. Firstly, you should be able to itemize your deductions. Should it be that you’re using the standard deduction on your taxes, you will be unable to claim the Charitable Contribution Deduction. These deductions should be listed on your 1040, Schedule A.

Secondly, should in case your overall noncash contributions go above $500 you’ll be required to file IRS Form 8283 together with some additional tax forms. Should it be that the item was a boat, plane or motor vehicle you should file IRS Form 1098-C as well.

Conclusion:

Making use of the Charitable Contribution Deduction can often be complicated. The simplest way to verify your contribution is to utilize an online e-file website such as efiletaxreturns.com. The website will ask you some important questions as regards to your donations and assist you to determine which category the charity organization fall under and the amount which can be deducted. You will not be asked to present your documentation with your tax return. Nevertheless, do not forget to keep those records together with a duplicate of your tax return for cases of audit. Should in case you cannot provide evidence of your contributions, you will not be eligible for the deduction and may be threatened with fines and penalties.

 

The Ultimate Strategy for your Business to Gain Competitive Advantage

In today’s globally connected business world and highly competitive international markets, a business cannot thrive if it remains contended with what it has achieved. The truth is that success today does not guarantee success tomorrow and thus a business needs to constantly analyze its strategy in order to respond to the external environment effectively.

Competitive Advantage is the Key to Success

One of the key reasons as to why some businesses thrive even during turmoil such as slow economy, international competition and financial instability, is their ability to maintain competitive advantage. Such businesses are proactive and prepare for the longer run; they don’t just focus on achieving the month’s or quarter’s sales targets but also keep scanning the external environment in order to use their strengths to tap opportunities and minimize the threats they may face in the near future.

If a business is actively pursuing such a strategy, it is highly likely to develop a basis of competitive advantage which gives it edge over its competitors and something which cannot be defeated very easily. There are several bases of competitive advantage. A business may have a certain kind of competitive edge owing to its internal capabilities as well as ability to respond to the external challenges.

Here are some of the ways through which a business can gain the competitive advantage and stay way ahead of competitors in terms of growth and success.

  1. Product Differentiation: One of the most successful businesses is those that compete with competitors on the basis of differentiation. Product differentiation means that your product or service is so unique and unmatched that no other competitor offers it. Customers take pride in using brands that have product differentiation as their basis of competitive advantage because it has an image which is undefeated and unparalleled.

However, in order to achieve competitive advantage, your business needs to constantly invest in technology, research and experimentation, so that it can develop something novel and unique which competitors cant.

  1. Cost Leadership: As the name suggests, cost leadership means that your customers prefer your brand as opposed to that of competitors because your business may be offering a price that is irresistible. It has been one of the most used strategies in the past that allow businesses to gain maximum market share.

In order to achieve cost leadership, it is firstly very important to maximize efficiency and reduce costs so that they can be passed on to the customers. Secondly, the price offered cannot be so low that perceptions of your product’s quality are endangered.

  1. Responsive to External Environment: Although this can be a basis of competitive advantage, however in today’s world, every business needs to actively respond to the external environment in a quick and effective manner so that change in customer needs, laws and environment can be effectively managed.
  2. CSR: Corporate Social responsibility is one of those factors, which have helped businesses in differentiating themselves and gaining the empathy and preference of stakeholders. Your business needs to have a CSR plan at all times and need to work towards it with genuine concern and effort to create a positive brand image.

Businesses that have some basis of competitive advantage are the ones that are most likely to thrive in the longer run. However, the process does not stop there; a firm should actively maintain its basis of competitive advantage and be vigilant about the emerging opportunities and threats.

How Small Businesses can Adopt Top Notch Accounting Practices

Whether it is a small business or a large one, there are certain practices, which play an equally important role in helping the business achieve its objectives. Accounting, if carried out in an effective manner, is one of those practices that can help businesses achieve that extra mile which may not be otherwise possible.

Why Accounting is Essential?

Although bookkeeping may seem like a very daunting, time-consuming and exhausting task, especially for entrepreneurs of small businesses, however, on the contrary, it actually helps simplify a lot of things and help the owner get a better idea of where the business stands right now, where the firm needs to work on and where it is doing well. All these decisions are very important in strategy making and thus the overall success of a business.

Some of the most successful firms are those that maintain good accounting practices and make it a priority to do so. It not only helps keep account of things and get a better idea of the current business state but also allows for future planning, something which is very crucial for all businesses, whether big or small.

Accounting Tips for Starters:

Here are some of the simplest yet effective tips for any business to ensure well-managed accounting with utmost ease:

  • Invest in the Right Software: Depending upon the kind of business you have and the industry that you operate in, you need to get hold of the right software. This is a one-time investment whose benefits you will reap in the future. Carry out a market survey and find out which software best suits your business.
  • Get hold of the Lingo: Make sure you know the jargons very well if you are to operate your accounting software yourself. More importantly, you need to familiarize yourself with basic accounting practices too. Also, if possible, it is best to hire a professional to do this however; this depends upon the size of your business and your budget.
  • Prepare for taxes: Taxes are one of the most crucial parts in any business. Make sure you have sufficient knowledge about how business taxes work and how you can minimize them in a legal manner. Tax saving is an essential practice for businesses today.
  • Constantly review your receivables: Managing receivables is one of the toughest things to do. Make sure you use your software in the right manner to take proper account of the receivables and manage them accordingly without having to compromise your cash flow cycle.

These are just some simple tips for beginners who may want to implement effective accounting practices in their business. They certainly help the owner get a better idea of how the business is doing financially and thus plan accordingly. Good accounting practices are one of the most common reasons behind successful firms.

TurboTax Vs Using CPA to do your Taxes  

As governance of taxes becomes stronger, more and more people are now being held accountable for filing their taxes. It has now become critical for individuals and companies to maintain their tax record and be vigilant in paying their taxes.

TurboTax VS CPA

 

In order to facilitate tax payers, there are a number of tax software applications available in the market now. TurboTax is one of the software applications that can help automate the process so you don’t have to stress about your taxes.

TurboTax allows you to make your tax returns and file your taxes online. It is an extremely simple to use software application which allows you to take a snapshot of your Wage and Tax Statement and feed it to the software. The rest is done by the software right in front of your eyes. TurboTax has been powered to pick up information and auto-fill the tax forms with information retrieved from the snapshot. All you need to do is verify your credentials and overview the filled form.

This online system can easily be accessed from your laptops, smart phones and tablets. User friendly formats have been made available by TurboTax so you can conveniently get your taxes done on time. When you log-in, you will have several options available for using TurboTax; you can choose to continue with the free trial, just to get the feel of the software application. Otherwise you can choose:

  • The deluxe version which helps you in maximizing your tax deductions
  • The Premier version which helps you with your investments and rental property
  • The Home & Business version, which is ideal for self-employed and small business owners.

If you don’t want to do your taxes online, you can hire a Certified Professional Accountant (CPA) to do your taxes. You would need to provide the relevant information to the CPA and he would take care of calculating and filing the tax return for you.

Both systems sound easy, however if you begin to compare the two, there are some hidden benefits that a CPA offers, which you may not get with Turbo Tax, and vice versa:

  • Hiring a CPA would save you time because they would be doing the work for you, whereas in TurboTax you would be doing the work yourself
  • However, if you are someone who likes better control, TurboTax should be a better choice for you
  • Your satisfaction with the entire process would depend upon the rapport you are able to build with your CPA and their performance, while with TurboTax, emotions don’t come into play
  • Your CPA and TurboTax would both definitely guide you regarding the deductions you can claim, however, TurboTax may be a little more persuasive about you using them.
  • TurboTax costs lesser than hiring a CPA (who would normally charge you on a per hour basis)
  • With TurboTax, you can retain electronic versions of your returns filed and retrieve them whenever required
  • With TurboTax, you can create scenarios by playing with the deduction claims and see how it effects the final amount of tax
  • If you avail TurboTax Audit Defense function (which costs about $40 extra), in case an audit query is raised on the tax filed by you, TurboTax will assign an account representative to deal with IRS concerning the audit objection. On the other hand, your CPA will only defend the calculations in front of the IRS and that too for an extra charge. You would need to justify the deductions yourself and defend why you claimed them
  • TurboTax allows you to keep your financial information to yourself, while if you hire a CPA, you would be discussing your financial information with them

Going with a TurboTax or hiring a CPA is dependent upon your personal preferences and whether you want to save time and effort or you want to save cost and retain better control on your financial details and your taxes.