I'm planning on moving from sole proprietor to S-corp in 2021 and wondering if anyone uses TurboTax rather than a CPA? I have been using TurboTax Self-Employed for the past several years without any issues, though obviously the S-corp will be a bit more complicated.
If you do your S-corp via TurboTax which TurboTax products are you using?
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If you switched from TurboTax to CPA, why did you do that?
Strongly recommend a CPA. As someone who is consistently wrapped up in the day-to-day minutia of my S-Corp, it’s not just the security in knowing an expert has it covered, but it’s the recommendations the CPA provides in terms of things to be aware of, why/how to do certain things, etc.
Well worth the cost most would charge (I imagine).
Also a physician. TurboTax is for W2 employees with simple returns. Like a patient with a simple scrape that could be taken care with first aid. S Corp or Professional Corp is like a compound fx, way beyond first aid. Layperson doesn’t know how to reduce it even watching it on YouTube. There’s so many tax benefits you’re throwing out the window that a very experienced gifted CPA can do that can save you a lot of money. You’re trying to save few hundred bucks when you’re throwing out easily 20-30% of your collections.
An excellent CPA is also your first line of defense to prevent being audited. It doesn’t matter how by the book you are, if the numbers fall outside the range whether too high or low, it will raise a flag. Raise enough flags will trigger an audit. Taxes/accounting is like reading labs with no ranges listed. We know what the ranges should be. Experienced CPA will know what the normal ranges should be for your numbers and advise you properly to avoid an audit.
Keep in mind, you don’t want a by the book CPA. They will get you audited for that above reason. Ask your fellow business owners who they use. You want a phenomenal tax strategist CPA.
When you have enough revenue, one day you may want to buy a house or a commercial property. Your CPA needs to advise you properly to increase your chances of getting that mortgage. Commercial mortgage has even more paperwork but it’s worth it to protect your practice. You’ll also need proper tax strategy advise on how to save for your retirement.
Pull the trigger, get yourself an excellent tax strategist CPA. Worth every penny.
Started an S Corp in November and did virtually nothing with it that tax year. Figured I'd save money by using Turbotax, which I've used for my personal taxes for nearly 20 years. Hah!
It was horrible. Really, really, really bad. 1,000,000x worse than Turbotax personal. "Do you need to file Form xxxx?" Uhhh, how do I know? If I knew what forms I needed I wouldn't have to buy software. So then I'd have to spend a couple hours going down a rabbithole of tax law to determine if I need Form xxxx. 30 seconds later, "Do you need to file Form yyyy?"
The whole thing was maybe $5-10k in startup expenses with no revenue. Cash basis. As easy as it gets, but Turbotax was absolutely terrible for it. Horrible. Complete garbage. I'd rather have my wisdom teeth pulled with no anesthesia than have to use Turbotax for business that's actually running.
Ended up just filing an extension and getting a CPA to do it.
I’ve been using turbotax for 10 years, no issues whatsoever.
I also have an easy business bookkeeping wise (no inventory, depreciable assets, etc), so that makes it easy
which turbotax products do you have to use in order to manage both the s-corp as well as your personal taxes?
The turbotax business, and then the personal version that handles k1, not sure what the name is
CPA 100%. Liability protection and experienced advisor for other matters.
how does a CPA protect me from liability? if i keep good records, and report them honestly via turbotax how does that open me up to more liability?
Sounds like you're looking for validation over advice. I also advocate for a CPA and anything less is irresponsible. Interest and penalties are afforded to the preparer in most cases. A CPA will also stop you from taking red flag deductions (i.e. deductions that flag audits like excessive home office bullshit). I've been doing this for 25+ years and I wouldn't dare use garbage like TurboTax. That's for home daycare and ebay candle companies.
not looking for validation, just trying to see what's out there. in reference to your comment about turbotax being for home daycare and eBay businesses i should note that my business is very simple as i'm a physician. basically just 1 employee (me), and business revenue is basically just work done as an independent contractor....so pretty simple as far as small businesses go...
Use a CPA.
Saving a couple hundred bucks isn't worth the risk of tax liability or a potential IRS audit (businesses that don't use an accountant are much more likely to be audited).
CPA. Please use a CPA. Off you were here, I’d be begging you to not DIY your taxes. Way too complex; you don’t know enough about the tax code to truly understand what you’re plugging numbers in to and you will probably end up saving money.
My CPA has saved me, literally, tens of thousands of dollars. I regret not using one sooner. I was an LLC (with S status) before and thought I could save money doing them myself. When the CPA I engaged with looked at my taxes, while they were accurate, I’d left a ton of money on the table because I didn’t know what I was going.
Get a CPA.
Oh, and they keep you out of jail, which is a nice bonus.