This tax season was an unusually complex one for my girlfriend Amy and me: we moved last year and I started telecommuting across state lines, Amy changed jobs and also started earning an income from a freelance gig, various student loan statuses changed for both of us, and we went in together on some investments. For the first time ever, we elected to have an accountant do our taxes rather than do them ourselves online with TurboTax. Here is what we learned about the differences and what the pluses and minuses are of each approach.
Handing over your W-2s to a professional may sound like a way to completely free yourself from doing any work on your taxes, but that isn't the case. You're going to want to vet the person you're giving all your sensitive financial information to, and the best way to to that is in person. So while you can fire up the computer and work on your TurboTax return at odd hours on your own time and in the comfort of your own home, you're going to need to put on some pants and actually set a meeting with a CPA. Amy and I relied for a lot of our vetting on recommendations from a trusted person with connections in the financial industry. We talked with both recommendations, and then ended up going with the CPA who asked the most insightful questions about our situation and seemed to want to build an ongoing relationship.
You know instinctively that you should only enter your info on websites that make security a priority, and that goes double for tax preparation sites. TurboTax is deadly serious about their security, touting their multi-factor authentication for accounts and data encryption for your information. Security is just as important when shopping for someone to do your taxes. We were reassured when our CPA showed us the secure online client portal he had set up for us to share our documents on, rather than rely on email.
Something that Amy and I both loved in the past when we did our taxes with TurboTax was the way it showed the fluctuation in your estimated refund in real time and explained why it changed after every step you took in the process. This year we had to cross our fingers and wait. In exchange for giving up that granular oversight during the process, we had a long meeting with our accountant after he was finished, where he explained his work and answered any questions we had. Both methods have their advantages, and your preference will probably depend on what sort of personality you have.
There's no two ways about it, getting a CPA to do your taxes is going to cost more than doing them yourself. In the end, it was worth it for us this year because of the extra hurdles we had to clear. While TurboTax offers a range of different services like advice on demand from a CPA or EA and even audit support, we didn't feel up to the task. And that's ok! What we learned from this process has been invaluable, and we'll have different variables to plug into the cost-benefit equation next year when tax season inevitably rolls around.