Ask Stacy: Do My Taxes With Software or Use an Accountant?

By on

As tax year 2010 slowly fades into the history books, let’s answer one more tax question. Here’s one I got recently…

I have always done my own taxes, using TurboTax software. But now I have bought my first home, and things are a little more complicated. Should I continue to do my own taxes or get help? And how do I find a good, reputable tax person?
Thanks,
Lorraine

Here’s your answer, Lorraine…

First, congratulations on becoming a homeowner!

Buying a house may make your taxes seem more complicated, but when you’re using tax preparation software, it’s really no big deal. Your software will ask you if you bought a house during the tax year, and if so, when.

Then it will automatically and accurately figure out if you deserve the First Time Homebuyer’s Tax credit. It will also ask you for the interest you paid on your mortgage and your real estate taxes (which should have been sent to you by your mortgage servicing company) and deduct them accordingly.

So the answer to your question is that TurboTax should be fine. If all you want to do is file a simple tax return, there’s no point in paying an overpriced accountant. But let’s take this a step further, because I think TurboTax is also overpriced.

Their website says the cheapest version is $50. That’s outrageously expensive relative to other available products and is no doubt a reflection not of their quality but their advertising budget.

As with many other consumer items, the most heavily advertised tax preparation products rarely justify their higher cost. I stopped paying Intuit (the maker of TurboTax) years ago. This year I’m using TaxACT, which costs just $10. They even offer a free version, complete with free e-filing.

There was a time when tax preparation software was only available from a few sources, like H&R Block and Intuit. But now online preparation (as opposed to installing software on your computer) has become so ubiquitous that it’s highly competitive and, as a result, exceedingly low-cost. And why shouldn’t it be? If there’s one thing a computer is good at, it’s keeping track of minutia and adding up numbers.

Next year, check out a few review sites and pick something less expensive. Your taxes will still be done correctly and you’ll save a buck or two!

But if you still want to know how to find a quality pro, I’ve done that story – check it out below, along with a few other stories that I hope you won’t find taxing!

Sign up for our free newsletter

Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's "205 Ways to Save Money" as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.

Check out our hottest deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,189 more deals!

Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.

  • http://pulse.yahoo.com/_FVIKWKXA2XO6YECZKBMZLURLXY Martin

    I agree about TaxAct. I have been using that site for many years and they are much cheaper than TurboTax. Also, they have excellent free customer support, but you have to sometime wait up to 2 days for a response. However, if some one has a more complex tax return, I recommend the user get the Online Ultimate TaxAct version which is now $17.95 for 1 Federal and 1 State return. I sometimes get stuck and need either current tax information, where to enter certain tax statements, or solve a software tax problem. All of this is included in the Online Ultimate version.