CPA vs TurboTax

Both Certified Public Accountant (CPA) and TurboTax offer tax preparation and filing services. However, comparing CPA vs TurboTax, the primary difference is that the former is a licensed accountant while the latter is a tax preparation software.

TurboTax is an inexpensive option to prepare simple tax returns with algorithmic triggers for potential deductions. On the other hand, CPAs, though high-priced, are adept at handling complex financial dealings through prompt human interaction. Precisely put, hiring either one depends upon your tax situation, budget, and preferences.

A CPA is an accounting professional with a state-board-issued license to practice public accounting. The license is acquired after meeting the CPA Exam, education, and experience requirements.

Here are the 4 E's required to gain the credential:

• Education – A bachelor's degree with 120-150 semester hours
• Examination – Pass all the four CPA Exam sections with 75 points in each
• Experience – Gain 1-3 years of relevant work experience
• Ethics – Pass ethic exam (if required by the state board)

All the pre-requisites are state-specific. Hence, ensure to check with your state board for eligibility. Please note that the American Institute of Certified Public Accountants (AICPA) administers the CPA Exam in collaboration with the National Association of State Boards of Accountancy (NASBA).

The primary job of a CPA is to examine a company's financial records and develop effective strategies for enhancing its economic performance. They specialize in various areas of accounting, including tax preparation.

Individuals dealing with more significant numbers and larger financial decisions must opt for a CPA. They have the required professional expertise and deep commercial insight to ease a more complex tax picture. In addition, CPAs take a personal look at your financial reports and suggest the best ways to reduce your tax burden.

Benefits of hiring a CPA

The primary benefit of hiring a CPA vs TurboTax usage is the personal touch that a CPA brings to the table. A CPA will ensure you have access to his valuable advice for matters related to taxes and beyond. Besides, employing a CPA spares you from the trouble of preparing documentation and other required paperwork. Also, in case of any tax dispute, the CPA has the authority to represent you before the IRS.

For businesses, it is always advisable to take the service of CPAs. It is so because companies often face complex tax situations and have dealings with the IRS. Moreover, CPAs possess proficiency in all financial matters that can assist a business to grow in every respect.

Turbotax is a software program that allows you to prepare and file your tax returns online. It is specially designed for U.S. federal and state taxes. It has been a pioneer in the field of online tax filing. Chipsoft's founder Michael A. Chipman developed it in 1984. Later, Intuit acquired it in 1993.

TurboTax lets you fill out and submit the tax forms electronically. The procedure begins with a series of simple questions about your life and spending habits. Then, it fills out the correct forms and guides you through the overall tax filing process. Lastly, it conducts a final audit of your state and federal returns before submission to the Internal Revenue Service (IRS).

The merits of TurboTax vs CPA is an ongoing debate. However, the freedom to do your taxes anytime and anywhere gives TurboTax an upper hand. Besides, the software also offers the availability of live experts for effective advice and review. Also, you can automatically access every tax code update without doing the heavy lifting.

TurboTax is a single platform to handle multiple tax solutions for a variety of clients. The clients include simple filers, renters, homeowners, investors, and self-employed individuals. Here is the list of different TurboTax products:

Benefits of Using TurboTax

The simplicity of use and cost are the main attractions of using TurboTax vs CPA. People who don’t have complicated tax matters can use this software to file their taxes themselves. In addition, it saves the time, effort, and cost involved in engaging a CPA.

Moreover, the software streamlines the tax filing process relieving taxpayers of countless hours of complying with complicated tax codes. Instead, you have to answer just a few questions and submit the required documents for the algorithm to understand your eligibility for deductions.

This article has been a guide to CPA vs TurboTax. Here we discuss the top differences between CPA and TurboTax, along with a comparative table and infographics. You may also have a look at the following articles –

• CPA vs Tax Preparer
• CPA vs Financial Advisor
• CPA vs FRM