Who doesn’t love to save a few bucks? I know I sure do. But at what point does quality start to become an issue and suffer? Peace of mind? Safety?
Let’s use an example. A cheeseburger at Mcdonald’s can be had for $1. Yes it’s yummy. But a grass fed, non-gmo, organic cheeseburger for $8 is kind of better for you and will likely be even more delicious. The cost is more, but your paying for better quality.
So what is the real problem TurboTax? Well. Let me see. Let’s ask ourselves a few questions to better illustrate the problems.
1. How many pages is 73,954? A lot. Yes. 73,954 pages in the IRS tax code. Do you trust yourself to be in compliance with all 73,954 pages? Your answer should be no. Do you trust a generalized piece of software to be able to interpret and analyze those 73,954 pages specifically to your tax scenario? Your answer should again be no. Why does this matter? To put this as frankly as I can, you can look at this as 73,954 opportunities each and every year to MOO (mistake, omit, overlook) a rule, code, or regulation and wind up getting royally screwed because of it. Does that mortgage interest go on the Schedule A or Schedule E? Do I have to prepare a Form 2106? Do I need a Form 8283 for my non-cash charitable contributions?
2. Would you perform surgery on yourself? You’re at kickboxing class. You’re beating the heck out of that punching bag. You’re sweating. You’re burning 1000 calories in an hour. You step wrong. Your ACL is torn. Do you turn to a piece of software to help you perform surgery on yourself? Make the incision 1.5 millimeters above the patella and… Wait what? No. Just no. At L&A we equate taxes with surgery. In fact, when one of the CPAs is deep in the zone at the New York or West Palm Beach office they often say “I’m in surgery.” Taxes are most people’s largest expense every year. And using something like turbotax can have tremendous impact on that expense and how expensive that expense really is. I’m arrested for a crime I didn’t commit. Let me hire legal zoom! No. Just no. You defer to the experts. Because the consequence can be life altering!
3. Have you ever made an honest mistake? I have. Here’s a story. For confidentiality reasons, I’ll use a fake name. After a long days work Bill comes home dirty, sweaty and tired. He’s hungry and would just prefer to eat dinner and go to bed. He struggles to lift his arm to open the mailbox but lightning strikes his heart when he glimpses the logo of the dreaded IRS on an envelope waiting for him. He anxiously tears it open to see a figure in big bold letters in the center of the page. $27,543. Oops. Bill saved himself 200 bucks in 2011 to cost himself $27,543 today. All over an honest mistake using TurboTax. Mistakes are made even by professionals. So imagine how easy it is to make one without being a pro. This comes from a firm that is constantly correcting the mistakes of other tax prep solutions.
4. How important is security? There is duality in the meaning of my next point. Firstly, Turbotax recently made headlines with its security breach a few weeks back. The data taken… very sensitive. A tax return is probably one of the most sensitive documents you can think of. The unfortunate truth is anyone can get hacked. But the likelihood is less using a CPA firm. Secondly, you can know there is an expert, a professional who has your back should you be audited or run into any issues. They can provide a security blanket financially and also serve as an advisor in many of life’s big events such as getting married, purchasing a home or starting a business. The added sense of security is a major plus.
5. Can we get a sense of how happy Turbotax clients are? Yes. Check out their Facebook page and their online reviews. They are atrocious. Enough said.
Have we established the real problem with Turbotax? I tell all my friends the same thing so they know I’m not selling. Taxes should not be taken lightly. Hire a pro. Even if it’s not L&A. Really. Don’t hire us. I don’t care. As long as you hire a pro I’m happy. Hiring us would be an added bonus. But, hire someone with credentials and who comes recommended by trusted friends, family or co-workers. Not Joe Schmoe who started doing taxes out of his basement 6 months ago because in that case you may be better off with Turbotax. Here comes the real kicker. For most people, the professional fee is justified alone by the decreased tax balance due or increased tax refund. Don’t be pennywise, dollar foolish. That’s right. Us pros often get better results. So there. Cost is an issue? The average tax prep fee at our firm is $279 for a 1040 with an attached Schedule A. That’s $23 a month!! That’s less than your gym membership!! Ok I am done.