Anyone outsource their taxes?

[Olav23]

I read an article about a guy who was outsourcing his business book-keeping to an indian firm. After he was happy with their work, he inquired if they also did personal tax returns. The firm seemed to be very knowledgeable in all aspects of the tax code, and of course the main selling point was cost. I remember he mentioned it was about $50 for full preparation.

Has anyone given this a shot? I'll post the firm itself if anyone is interested. It was recommended by the guy on wsj.com, but I have never used it personally so can't comment on the quality of the work.

[Alan]

Sounds like a good rate. However, don't know that I could stand to have someone else do my taxes. I would spend even more time than I currently spend on double checking and worrying about it

[Olav23]

Honestly, I was thinking the same thing. It costs about $50 for TurboTax, or $50 to have them do it. I like the thought of letting someone take care of the details, but at the same time, this is money we're talking about.

[CybrMike]

And when you get audited are they going to fly to the states and help you defend your case against the IRS. yeah....thought so.

[OAG]

Would never do it. TAX ACT is FREE and accurate. Mine are not that complicated, nor IMO are anyone else's complicated enough to have anyone else do them for them. Even if someone else does them for you, you are still responsible, so the checking must then be done.

[retire@40]

You would send all your personal and financial information to some guy in India you never met?

I know. They promise they will keep it confidential.

[FinanceDude]

My taxes have become too much of a hassle to do, so for my 2007 fed and state returns I am "outsourcing"to a CPA for $175.

[tightasadrum]

Quote:

Originally Posted by FinanceDude My taxes have become too much of a hassle to do, so for my 2007 fed and state returns I am "outsourcing"to a CPA for $175.

$175?

It must not be too much of a hassle if a CPA will do them that cheap. I had mine done by a CPA several years ago for $550 and talked to another CPA I know pretty well about doing 2007 taxes. He estimated $1000! At $1000 I'll probably do them myself using TurboTax for $80 or so. But I always wonder what I might be leaving on the table.

Any CPA's on the board? How do these rates get set?

[FinanceDude]

Quote:

Originally Posted by tightasadrum $175? It must not be too much of a hassle if a CPA will do them that cheap. I had mine done by a CPA several years ago for $550 and talked to another CPA I know pretty well about doing 2007 taxes. He estimated $1000! At $1000 I'll probably do them myself using TurboTax for $80 or so. But I always wonder what I might be leaving on the table.

I was surprised myself, but he's a local guy with two offices, and does 1500 tax returns a year, so maybe he makes it up on volume??

Since DW and I do a lot of cash and non-cash charitable giving, have RMD's from my son's inherited IRA's, executor fees, am self-employed, and get residual royalty income from my sister's patent, I threw in the towl this year. Even if it's $200, it's worth it.

[CybrMike]

My friend, try getting an s-corp with millions in revenue that is recognized over different periods of time, and all kinds of other nuances that requires basically a full time accountant.

Naive to think that everyone can do their own taxes.

Quote:

Originally Posted by R Wood Would never do it. TAX ACT is FREE and accurate. Mine are not that complicated, nor IMO are anyone else's complicated enough to have anyone else do them for them. Even if someone else does them for you, you are still responsible, so the checking must then be done.

[A854321]

Most all major accounting firms ALREADY outsource returns to India, be it corporate or personal.

I have a CPA do my taxes ( not yet FIRED, still employed). I would still pay a CPA do them in retirement, as I do not want to run afoul of IRS. Already had some dealings with them and do not want to be a target because I overlooked something.

[OAG]

Quote:

Originally Posted by CybrMike My friend, try getting an s-corp with millions in revenue that is recognized over different periods of time, and all kinds of other nuances that requires basically a full time accountant. Naive to think that everyone can do their own taxes.

Sorry, I thought we were talking PERSONAL taxes. Sounds like you are talking a Corporation (S).

[retire@40]

Quote:

Originally Posted by R Wood ...TAX ACT is FREE and accurate. Mine are not that complicated, nor IMO are anyone else's complicated enough to have anyone else do them for them...

Do know how naive that sounds? Maybe you have a really simple tax return, but there are tax returns out there as thick as phone books that would make your head spin.

[FinanceDude]

Quote:

Originally Posted by retire@40 Do know how naive that sounds? Maybe you have a really simple tax return, but there are tax returns out there as thick as phone books that would make your head spin.

yeah, but nothing beats dragging a guy with the initials "CPA" into the audit with you........

[Walt34]

Done it myself for decades, but ours are not complicated. Never owned a business or anything like that, so just use simple Turbotax or similar software more to make sure the arithmetic is right.

[SecondCor521]

I will do mine myself, this year, by hand, with pen and paper. But this year will be the easiest it's been in a decade because the ex took the Schedule C sole prop with home office and inventory and taxable stock account with her.

2Cor521

[audreyh1]

Before we married, my husband did his own taxes, and dealing with that schedule C stuff and depreciation is a real pain. But he preferred to do it himself and TurboTax.

After my hand-holding accountant sold her business to another and he made me fill out a large form obviously generated by some computer program to do my taxes, I decided - forget that! If I could fill out that form, I could do my own taxes!

It was just as well. We had to deal with AMT long before tax accountants seemed to even have a clue. I still remember having one CPA looking into the tax changes in 1997 or 8 and how it would impact AMT, and she expressed total surprise about AMT on unexercised stock options.

Huh?

Of course, after 1999, most CPAs knew about stock options and AMT!!!!

Our taxes are much simpler now. No business. No schedule C - yay! No W-2! Rarely a schedule A. Just download stuff from Fidelity into Turbotax covers most of it. A couple of other small numbers to enter and then review whatever Turbotax thinks it's doing. A voila - done!

Audrey

P.S. But grrrrrr always AMT owed.

[Alan]

I can certainly understand folks wanting or needing someone else doing their tax returns once they start to get more complicated.

2007 I started receiving a UK pension from a previous employer and I'm sure that pre-internet I would probably have thrown in the towel and paid someone else. But I still reckon I can do it. My pension goes into a UK bank with which I now also have a high interest savings account and I have been through the process of first filing a form with the US IRS to get a certificate from them to file with a UK IRS form stating that I pay US taxes so I get my UK pension paid free from all UK taxes. I have a spreadsheet with the monies (pension and interest) paid each month against the official exchange rate for the day they are paid in.

Come the 2008 tax return I may be singing a different tune if it all goes pear shaped this year

[Nords]

My BIL is a CPA with 20+ year's experience and he hates doing people's personal taxes. He'd much rather do the taxes for business owners but they also do a lot of returns for high net-worth families & heirs (trusts & estate planning too). Even so he's looking at 80-hour weeks from now until extension filings April.

He won't touch anything that costs less than $400 and he'd probably keep whining about it until he's paid at least $1000, but then he has to know a lot about everything in the tax code-- not the least of which is knowing where to look it up. Even when I can keep up with his tax-code knowledge, he runs circles around me with tax-court precedents and IRS rulings.

It's good to become an expert on your own taxes so that you can make your decisions with those consequences in mind (instead of ambushing your accountant with them in January). We've simplified our finances with that goal. But if your tax return is a half-inch thick then I'd certainly understand using a CPA.

What I don't understand is a lawyer with no investing interest showing up at an angel investor's group with his justification consisting of "My accountant said I should be looking into this." Maybe his accountant should be sitting at the table listening to the presentations...

[Olav23]

I read that many CPAs already outsource a ton of their returns, then basically look it over and sign it, so you might be cutting out the middle man.

Last year, I hired a CPA to do my taxes. I was upfront that I was looking for a relationship, not just someone to type my numbers into TurboTax. I would have expected her to call me before the end of the year and tell me to tax loss harvest if I had the opportunity, remember to charitable give, catch up on my 401k, etc. Between last April and today, I received a Holiday card from her... She charged me $550 last year.

This year is far less complicated, and I will probably not use her services again. I had (possibly mistakenly) assumed that I would get someone looking out for my best interests. This was not the case.

So, being that much of the work gets oursourced to start with, and having all credit locks in place, etc, I might give it a shot this year. For $50, I will TurboTax myself, and send it to them. Then I will compare both of our forms after the fact and see how they stack up against each other.

It seems sorta egocentric to think that US-based CPAs could do any better job reading published tax codes. Though, it is a perfectly valid point that there is no US-based CPA to go into the IRS with me if something does happen. I'd assume I could always hire a tax-attorney after the fact, if something severe showed up (that I didn't notice before I filed)!

I might as well use economies of scale to my advantage! I'll report back at how the service was, costs, etc afterwards. If anyone is interested, this is the wsj article:

Outsourcing Your Life - WSJ.com

and the tax firm the guy uses:

Outsource Bookkeeping to India, Outsource Tax Preparation to India, Outsource Accounting to India

Stay tuned...