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No. of Recommendations: 3
I pay my CPA $500 to prepare my taxes. He's very thorough and advises me on tax strategies to help reduce my tax liability.

Question 1- Am I paying too much? We are dinks (double income no kids) working at corporations and bought a house last year.

If all you have is W-2 income (from your corporate jobs), dividends, interest, perhaps some investment income, and a house - then IMHO you're paying too much. That's a dead simple return, either with pencil and paper or with $30 tax software (like TurboTax). Certainly some situations require professional help - small businesses, estates, maybe real estate transactions, etc. Some people have math and/or tax phobia. Fair enough. And maybe your tax guy is giving you great, tax saving advice - though I can't imagine that you couldn't do as well yourself.

Question 2- His fee is deductible. Does this make it a wash?

No. His fee, and other miscellaneous deductions, are only deductible to the extent that they exceed 2% of your gross income. And even after you meet that hurdle, a $500 deduction is worth only $140 (assuming you're in the 28% tax bracket).

I don't mean to disparage the many fine tax pros and CPAs on this board. Your circumstances may be such that $500 is a bargain, and money well spent - only you can make that judgement. It's just that as you describe your situation, it's simple enough that you should be able to do it yourself, and at considerably less cost.

Lorenzo (cheap and self-reliant)
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