lansbury

Had our taxes back from the CPA.

Turbo Tax cost to file $90 - Federal Rebate $455: State Rebate $31


CPA charged $290 - Federal Rebate $1298: State Rebate $307


The difference seems to be in what Turbo Tax allowed as a deduction which was a lot less then the CPA said was allowable. Very glad we didn't file using Turbo Tax.

Bink

Hmmmm, yes that is quite a big difference. Mine was single digit dollars different. What did the CPA allow you to deduct that TT didn't out of curiosity?

Owen778

Can you give us an idea of what items made most of the difference? Once I have our 8938 complete, I'll be filing using TaxAct for the first time. Last year we used a CPA, who was OK, but expensive.

lansbury

I expected it to be quite close maybe $100 either way.

The difference seems to be in what Turbo Tax rejected as deductions, mileage etc as a city councilor for which I do not get reimbursed. Also CPA has shown the cost of our investment account as a deduction, Turbo Tax didn't. CPA has shown more for charitable deductions then Turbo Tax did. Medical expenses the CPA is showing more as a deduction then Turbo Tax did. On income Turbo Tax download the investment account information from Chase and has a slightly higher income than the CPA calculated from the forms Chase sent.

Our CPA sends out a summary sheet for income and deductions each year which we fill out. We give that to him along with documentation to support the figures. I used that sheet when I tried out Turbo Tax. So basically I gave each the same information. The difference in charitable deductions is I think down to how I entered it into Turbo Tax, but only accounts for about $200 of the total difference in the refunds.

Owen778

That's interesting, thanks. I didn't know you could deduct investment account fees. I looked it up, and it looks like you can, though you can't deduct all investment costs. This seems the relevant link: http://www.irs.gov/publications/p550/ch03.html

I don't think that will apply to us, though, as we don't have any account management fees, just sale commissions on shares, which act to reduce the taxable capital gain directly.

kodokan

Very interesting follow-up - I was expecting it to be largely the same, as I imagined the CPAs were largely all shoving it through a bit of software anyway!

I used TT for the first time this year, but had very simple deductions: mortgage interest, property taxes, state income tax, car plate tax, and straightforward 'I wrote a check' style charity gifts. In a couple of years, the mortgage will drop to the level where it's not even worth itemising, so will happily use TT going forward. Useful to know, though, that if I ever have a more complicated life, TT might not be the most optimised filing solution.

Michael

Did Turbo Tax treat you as an employee and the CPA treat you as self employed as a city councilor? If that was the case, deductions would be different since as an employee, business expenses can't be deducted until a threshold has been reached. However if you got a W-2, then you should be an employee since FICA taxes should have been withheld. If FICA taxes weren't withheld and the city issued a W-2 instead of a 1099, then the city screwed up.

Did the CPA uses Schedule C and Turbo Tax use Schedule A?

tiger222

Our US taxes are done and refund in the bank.

We're US expats living in Australia. Still must file on worldwide income with the IRS. Deadline for expats living abroad is 15 June 2014.

Jscl

You might be using the wrong words when you "explain" your expenses to Turbo Tax, for example business miles (where you travel from your base of work to another location) are deductible, but if you told Turbo Tax they were commuting miles Turbo Tax would not have included them. But still, that's a big difference in tax due, so it must have been a big difference in deductions.

Bob

And we finally received the Federal refund cheque.

Not as long as the letter mentioned...but still, seemed to have taken forever....but for the first time, we got what we expected without them changing anything on it

Giantaxe

For an individual, they're only deductible to the extent which they exceed 2% of income. Similarly, medical expenses are only deductible to the extent which they exceed 10% of income.

Owen778

I knew the part about medical, but not investment expenses. I wonder if Turbotax realises that and his CPA has forgotten?

I can't imagine there are many people for whom it makes sense to pay more than 2% of income on investment expenses. Most of them probably need to move their money elsewhere.

lansbury

Having now had a chance to go through the folder of forms from the CPA form 2106-EZ is blank so he hasn't put business expenses into our deductions.

It is becoming more apparent that the difference is in the way TT treated our investment account with Chase, and the way the CPA did. Turbo Tax download the figures direct from Chase, my CPA used the 1099 Chase sent to me. TT shows on line 13 for Capital Gains $2430 more than my CPA does. On line 40 for deductions my CPA has $1926 more for deductions than TT does. Both were given the same information.

Unfortunately not being able to see what TT did with the information from Chase, or how my CPA interpreted that information I can't work out why there is a discrepancy. It is interesting that when I first entered the 1099 from Chase I did it manually, as I couldn't get TT to log in. The result I got was closer to what my CPA had. Not being sure I had entered the information properly I finally got TT to download the information, when the refunds reduced substantially. So I suspect there is something amiss with how TT uses the download information.

I shall be going to my CPA again next year, it is more than worth the difference of $200 between him and TT.

Giantaxe

I doubt that's the difference because it's a pretty basic thing that a CPA would know. Without a lot more specific info, it's impossible to tell why lansbury is seeing a difference.

[email protected]

Hi all! This is a little odd. I am a US Citizen married to a UK citizen. I reside in the UK. I have my tax form 1040 and 2555 EZ right in front of me. I have not filed the last 3 years so I am doing it now. I currently read Publication 54. I totally got like 1% of most of it... I also looked at Tax filing for US in London. Pretty straight forward. I rent and I have no US assets (Im left college back in 2011)

Anyway... I am going to file years 2011, 2012 and 2013(current) and send the IRS a letter stating why I didn't file at the US embassy. Does that sound like a sound plan? Am I missing anything? Also I would like to get a hold of the Tax filing example from http://britishexpats.com/wiki/Taxes_..._IRS_in_London if anyone has that!
THANK YOU!