When to Switch from TurboTax to a Real Tax Pro?
Content provided for general information. Talk to your advisor to learn about recent updates or other rules that may apply to your situation.
As tax season approaches, many individuals are wondering whether they should continue using tax software such as TurboTax or hire a professional tax advisor. This decision can become even more complicated if there has been a significant change in income, such as in the scenario presented in the question: a doubling of salaries for both spouses. So, when is the right time to make the switch and start working with a real tax pro?
The Importance of Accurate Tax Filing
Before we dive into the specifics of when to switch from TurboTax to a tax pro, it's essential to understand the importance of accurate tax filing. While tax software can be a convenient and cost-effective option for simpler tax situations, it may not always provide the level of accuracy and expertise needed for more complex tax returns.
As your income and financial situation become more complicated, so do your taxes. In these cases, it's essential to ensure that all deductions and credits are claimed correctly, and all income is reported accurately. Making mistakes on your tax return can result in penalties, interest, and even an audit from the IRS.
Income Increase as a Trigger for Change
One of the most significant factors to consider when deciding whether to switch from TurboTax to a real tax pro is a significant increase in income. As mentioned in the question, the combined income of the spouses has doubled, going from 60k to 125k. This increase can be a trigger for change, as it can bring about more complex tax situations, such as a higher tax bracket, new investment income, or additional deductions and credits.
When your income increases, the potential consequences of making mistakes on your tax return also increase. Therefore, it's crucial to work with a tax professional who can navigate these complexities and ensure accurate filing. Additionally, a tax pro can help you identify potential tax-saving opportunities that you may not be aware of, ultimately offsetting the cost of their services.
Other Factors to Consider
While a significant increase in income is a clear trigger for switching to a tax pro, there are other factors to consider as well. These include changes in marital status, homeownership, starting a business, and investments. Each of these situations can complicate your tax return, and a tax pro can provide valuable guidance and expertise to navigate them successfully.
Another essential factor to consider is your comfort level with filing taxes. For some individuals, taxes can be overwhelming and stressful, and working with a tax pro can provide peace of mind and eliminate the burden of filing taxes on their own. Additionally, a tax pro can provide valuable tax planning advice to help you prepare for future tax seasons.
Consult with a Tax Advisor
Ultimately, the decision to switch from TurboTax to a real tax pro is a personal one and will depend on your specific financial situation. It's always a good idea to consult with a tax advisor, who can assess your individual needs and provide personalized advice. A tax advisor can also help you determine the best time to make the switch and ensure a smooth transition.
In conclusion, while tax software can be an excellent option for simpler tax situations, a significant increase in income can be a trigger for switching to a real tax pro. Additionally, changes in marital status, homeownership, and investments can also complicate your taxes and may warrant the expertise of a tax professional. If you're unsure about when to make the switch, consult with a tax advisor who can provide personalized advice and ensure accurate and stress-free tax filing.