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Originally Posted by DeathDonkey
I don't see how that's any different than what surfdoc said. Assuming the guy's "job" is to maximize your EV on tax filing (deductions - risk of audit and all that jazz).
It's a big assumption to think that your tax preparer is valuing the risk of audit the same as you would, esp. when a tax preparer gets paid more if you are audited. But even if they didn't have that bias, the tax preparer has clients that want every deduction possible and others who want limited audit risk, and even if you tell your preparer which way you lean, that doesn't mean their judgment about what you want is actually what you want.
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To put it another way, if you believe you are more confident in what tax stuff will give you deductions, what will minimize your audit risk, and how to handle the complex stuff you mentioned, why pay the guy at all?
Two eyes are better than one, and I'm not a trained tax professional so he does know stuff I don't know. Most of the 20 hours is just organizing my records properly to calculate my income and deductions properly, and I'm the best person to do that.
One example today was a stock that paid a large cash distribution a few years ago, that I sold last year. If a tax preparer reviewed my brokerage statements they would have missed the distribution because the brokerage statements don't tell you where it came from. It actually needs to be deducted from that position's basis, which means that the preparer would have under-reported my income. I would have paid less in taxes, but if the IRS audited me I'd have a big potential liability and penalty, one that I would have been totally unaware of.
It's fine to use a tax professional, but double check their work and understand their assumptions. Too many americans have found themselves in hot water with the IRS because their preparer screwed up or pushed some boundary the client never wanted pushed.