Pros and Cons of using Tax Preparation Software like TurboTax vs. a CPA

Posted on 4th May 2021

Generally, people use the services of CPA’s for preparing their tax returns. In the English-speaking nations, certified public accountant is the title given to qualified accountants. In some of the nations like the US, you have to pass certain examinations and attain a license from the government to work as a CPA. In the US, CPAs licensed in one state cannot practice in another state.

TurboTax is tax preparation software created by Chipsoft in the 1980s in San Diego, USA. Since its inception, this software has become extremely popular. It has various versions like TurboTax Deluxe and TurboTax Premier. This software is used for filing both federal and state income tax returns.

The various pros and cons of using TurboTax tax preparation software rather than hiring a CPA are listed below:

Pros

Easy to use- While preparing your tax return using Turbo Tax software, you don’t require having in-depth knowledge about tax preparation. This software offers step by step guidance and helps people with limited knowledge of tax preparation in preparing their tax returns.

Offers additional support- TurboTax Tax Preparation software offers the feature of Audit Defense from Tax Resources, Inc. This service can prove to be extremely useful during an income tax audit.

Cost effective- In comparison to hiring the services of a CPA, the cost of using Turbo Tax is quite less. Though obviously, you will have to invest in the software, but over a period of time, you will get value for your money. Moreover, you have also got the option of using outsourced Turbo Tax preparation services. In such a case, you will not have to invest in the software and will have to pay only for a number of hours; the outsourcing firm has worked for.

Prompt service- By using this sophisticated software, even the most complicated tax returns can be prepared within an hour.

Available Online– its online availability makes using it easier for people suffering from time constraints, as they can use it anytime rather than taking an appointment.

Maintains old records- Turbo Tax software automatically stores information regarding your tax returns. You can easily access the information, whenever necessary.

Cons

Not suitable for handling difficult monetary situations – For people who own a business in which a number of transactions take place every day, hiring the services of a CPA will be a better option.

Lacks human touch- When you hire the services of a CPA, you can ask him further questions related to future tax planning whereas Turbo Tax software cannot offer such information.

By: Avneet Kaur