I saw this on Reddit and decided to steal it. A user asked “What are everyone’s thoughts on doing your taxes with software yourself or having a cpa do them?”
I have been asked this question many times. Mainly because I, as all tax professionals, charge a fee to prepare a return.
One of the many tax professionals had this answer: “Software is a tool used by DIY filers and by tax professionals.
The primary difference is that a tax pro should have the knowledge on what to enter in the software and whether it is allowed, which serves as a sort of check/balance system.
A DIY filer may not have that knowledge. I can’t tell you how many times I have represented clients who said, “Well, TurboActSlayer let me do it.’
The tool is only as good as the tradesman using it. If you have a relatively standard tax return (Married, W2s, kids, mortgage interest), a DIY software will serve you fine.
Software won’t look at past years returns to see why things are different this year. It won’t look two years into the future when little Hayden, Jaidan, and McKinsleigh are no longer eligible for the Child Tax Credit and tell you how to prepare accordingly. It won’t ask probing questions to find potentially more tax mitigation strategies. It won’t check your tax account quarterly to help stave off potential surprise audits/exams and tax related ID Theft. It won’t explain to McKinsleigh how working and taxes are related or won’t advise Aidain on how to maximize his ‘Hobbit Feet’ OnlyFans channel.
But, not everyone needs or wants that, and not every tax professional does those things, either. I look at paying a tax pro (who, incidentally, may be a CPA, but could also be an Enrolled Agent or attorney or uncredentialed preparer) as a sort of insurance. You get a tradesman with a better tool and more knowledge on how to maximize the effectiveness of that tool. Is that worth the extra cost? Every person’s risk tolerance is different. Some will pay it, and others will do it themselves until it is beyond their capability.
Edit: I am a tax pro, so I may have some bias. But I don’t typically target returns or clients that can easily be done on a DIY software.”
Just remember, you are paying for the tax professionals knowledge.
