Why should I pay a CPA to file my taxes?

[SanJac]

Originally Posted by trusso11783

Serious question. We are married with two kids. Our return is fairly simple. We have a house with a mortgage, both have W2s, bank interest, student loan interest nothing else. So, W2s and interest are income. Property taxes, property taxes and mortgage interest along with child credits are deductions.

I bought H & R Block tax software. We owe about $14k since one of her two W2s withheld little to no taxes and my job took about 10%. So, we underpaid and for the first time ever, got hit with a $400 penalty for underpayment throughout the year. What could a CPA do that HR Block software can’t do? It’s pretty cut and dry. My friend said I should use his guy that charges $650. That seems crazy to me. My accountant never charged more than $150 and that was for our joint return and my old side business return but got sick and is no longer in business. So, why hire a CPA if the software does the same thing? Thanks for any replies.

I read through this entire thread. I think you would benefit by having a CPA (who specializes in taxes) to review your tax return. Something seems amiss based on the dollar values you have posted. If you have $14K to pay Uncle Sam then you can afford $650 for a CPA. At the very least a CPA can help you strategize how to reduce your tax burden in 2024. Also, if you made a mistake in your return they can always file an amended return.

You seem more worried about incurring an underpayment penalty when you should be worried about the amount of taxes you are paying. Also, after reading all 10 pages it isn’t really clear if your wife is a W-2 employee or if she is a self-employed contractor. A good CPA can help you sort all this out.

Finally, somewhat surprisingly people have recommended going to an EA over a CPA. I suppose you could get lucky finding a great EA, but if you find a CPA that specializes in tax planning it will be money well-spent.

[MrRational]

Originally Posted by trusso11783

Why should I pay a CPA to file my taxes?

Because that modest fee is the cost to have the continuing professional relationship.

Originally Posted by SanJac

I read through this entire thread. I think you would benefit by having a CPA...
If you have $14K to pay Uncle Sam then you can afford $650 for a CPA.

Agreed.

Finally, somewhat surprisingly people have recommended going to an EA over a CPA.

This is done because if that option isn't mentioned the EA advocates will quickly pile on with two pages of posts
(saying yet again why they are always the better choice). The Turbo boys aren't listening in either case.

[SanJac]

Originally Posted by trusso11783

Neither of us got bonuses, withdrew taxable deferred $ and no IRA items. Everything is the same except wife made about $30K more than usual. I do our taxes each year with Turbo Tax. I don't go to CPAs or Accountants anymore since mine retired a few years ago.

On your wife's W2s is box 13 checked?

[ChessieMom]

Originally Posted by trusso11783

Maybe not but on the letter I received from the IRS, it shows the quarterly periods of what was withheld and under the Rate column, it clearly shows %. Most of the year was 7% Rate and the last quarter was 8%. I do not know if that means that 8% was withheld or something else.

I went to my HR person today and asked what needed to be done to withhold more of my income. She had no idea what to do but said she would look into it for me. Looks like I am not the only one that is confused by all of this.

You took a tax issue to your “HR person”???

They have every right to be confused. Do you not have a Payroll department? Surely you have access to a W-4 form - the last line is where you request additional withholding. It's really very simple.

Clearly you don't understand income taxes. For that reason alone, you should absolutely be using the services of a professional for your taxes.

[SuperJewNYC]

The CPA can find enough savings to pay for their $650 fee. Go to a CPA.