When Bill and I first married, we had a CPA. The first guy, I think he just did the bare minimum and it hurt us because we had to PAY a small fortune. We went with another guy for a couple of years but his fee jumped by 40% each year.
If I could do one of those free services over the internet, I probably would but with Bill being a professional musician on the side, we get tons of 1099s and you cannot file a Schedule C online. (Please correct me if I am wrong.)
So, in 2008, we switched to the H&R Block At Home 2010 Premium Federal + State + eFile
Which you choose is completely a personal preference but you need to keep a few things in mind:
- If you use a CPA, make sure they will represent you if you are audited. (We contacted our CPA from 2007 when we received our audit notice and received a very lackluster, “Let me know if you need me to mail you some copies.”)
- If you choose software, make sure they back it up with audit support.
- Whichever you choose, do not switch each year. Stick with the same thing because while you would think the numbers would crunch the same in each place, they always vary slightly.
- If you e-file or use software, print a copy of your completed return. Why? Because the IRS receives an electronic copy that does not have each itemized deduction. Some items end up grouped together. We had to provide a copy of our returns to the auditor so she could see the breakdown of things.
- Always be honest with your deductions, whether you do your own taxes or have someone do them for you. Remember that if that part of your taxes should be audited, you will have to prove your claims. Our auditor told us that the IRS has hired a ton of field agents just for the purpose of auditing more average Joes just like me and you.
Tomorrow, we are going to talk about what you should do if you do get that lovely letter in the mail.
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