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Doing your own taxes
Old 01-26-2008, 08:35 AM   #1
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Doing your own taxes

I am 46, and although I'm an excellent bookkeeper, I have always had someone else do my taxes (probably because my father always had someone do his taxes). My returns are fairly simple. I'm single, and in addition to my job, most of my income is from stocls and mutual funds. And no mortgage. I've been thinking that with since I'm already filling out all my information for my tax preparer, wouldn't is just be easier and cheaper if I just do my own taxes? But I always worry that if I do it myself, I may miss some tax break.
How many of you do your own taxes? Do you consider it to be worth paying someone to prepare your taxes?
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Old 01-26-2008, 08:47 AM   #2
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I have always done my own taxes. Sounds like your situation is very similar to my own and would be quite simple. I just cannot see paying someone when most individuals have relatively simple tax returns. Once you become accustomed to the process, you will wonder why you ever paid someone for tax preparation.
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Old 01-26-2008, 08:57 AM   #3
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I agree with Lakedog. Unless you have something "exciting" in your tax preparation, any one of the basic tax preparation software packages will walk you through the process and keep you abreast of available tax breaks.

My FIL always talked about his CPA when tax time came around. I assumed he had all sorts of exotic investments. When he went into assisted living, DW took over his finances and I did his taxes. He had no exotic anything and barely had any investments. His taxes were extremely simple and it took me less than 30 minutes using TaxCut. The year before I did his taxes he paid his CPA $650 for a similar return. That was a total waste of money.
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Old 01-26-2008, 08:58 AM   #4
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I have always done our taxes myself. It all started off simple and basic and as it got more complicated I read the instructions or called the IRS (before the internet) or looked it up online. The only time I heard from the IRS was in 1987 for 1986's return. I had transposed a number from the W2 and we owed them the difference and a few months of interest. When I did the taxes I had a newborn baby and a toddler and I'm sure I wasn't at my peak tax prep mode.

I don't use tax prep software. I pick up forms at the library or post office or print them out from IRS.gov. I fill them out and then use one of the online tax filing sites (usually free). That way, the filing site is double checking for calculating mistakes. It's still my responsibility to make sure I've included all the income and deductions and credits possible in our life (IRA, college credits, child credits, energy credits, etc.).

If you stay current with changes in the tax rules and read the IRS site you may be able to do it all yourself. But this is the kind of stuff I like to read up on and doing taxes is considered something I look forward to doing.

Depending on your life and your finances you may be surprised at how simple it all is.
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Old 01-26-2008, 09:00 AM   #5
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David, I do my own, using Turbo Tax or Tax Cut. I had an accountant prepare mine for me for several years, then started doing my own. That gave me a basis for comparison to believe that I was doing fine.

If you are nervous about it, you could parallel one year's return, to see if your results are different.

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Old 01-26-2008, 09:01 AM   #6
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I've been a "do it yourself" filer since watching my parents do it themselves with forms and records all over the dining room table every year. It's not hard and with tax prep programs (which I reisted for a long time) it's even easier. I think I'd have to do as much or more work to tell someone else my finances and collect records as it is to do it myself. IRS Pub 17 has all kinds of hints and info. Most tax prep programs (some are even free) also have lots of guidance. If nothing else you could use one to get your records together then bring the return it spits out to your tax preparer if you are still not sure you might be missing something. I did just that one year when I had a complex situation with buying and selling residences which had been partly rented and depreciated and partly compensated for moving by an employer. It was easy the get the right stuff into the return and the CPA Tax guy I paid to review it didn't find anything to change or add. That year, I'm glad I paid for the review and reassurance that I was doing it all right, but it seems easy enough to do in normal years that I just send in what I do myself.
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Old 01-26-2008, 09:05 AM   #7
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Except for a few years I always did my own taxes and now with Tax act it's simple . I am to thrifty to pay $450 for a few hours work .
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Old 01-26-2008, 09:07 AM   #8
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........... The year before I did his taxes he paid his CPA $650 for a similar return. That was a total waste of money.

Of course it probably took the CPA 15 minutes, because his software just copied all the information over to the new tax year form.
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Old 01-26-2008, 09:13 AM   #9
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You've got a bunch of cheap SOBs here, so I will pitch for the CPAS

My dad, too, did his own taxes, but he had a background in accounting and he never had a PC to help him. On the other hand, I did my own when life was simpler (just a wage earner.) But about ten years ago, by the time I had a home with mortgage, investments, and for a few years, rental property, I turned the mess over to a CPA. In (early) retirement, I am retired but my income comes from a family trust. I've tried a few times to do my own taxes, but last year one of the K-1s listed like 20 or 30 sources of foreign income, and I quickly gave up

Last year I spent $334.14 to have my taxes done (I use Quicken, can you tell?) For me, it's worthwhile. For others, maybe DIY is the answer.
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Old 01-26-2008, 09:18 AM   #10
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With TurboTax and TaxCut programs available for $40 or less, there is no reason to pay someone to do your taxes if they aren't complex. Looks like you should DIY.
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Old 01-26-2008, 10:21 AM   #11
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I do my own taxes - retired, 49, 72t in progress, REIT dividends, capital gains.
I use Excel for all tracking and calculations. I would not trust anyone else to do
them. Both my mom and my ex-MIL used tax preparers for very simple returns,
and both stopped after I pointed out several errors that they made.
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Old 01-26-2008, 10:26 AM   #12
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I did my taxes for years, then switched to a CPA. He immediately told me that, because I was self-employed, I could create a medical reimbursement plan, and deduct all medical expenses. Saved lots of money.

But now I am going to do them myself. Things are simpler now, and I don't think there's anything I will miss.

Moral: Perhaps you should alternate -- one year with CPA, a few years without.
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Old 01-26-2008, 11:10 AM   #13
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I'm 50, and have never had anyone else do my taxes. Not even when I was self-employed as a realtor with business deductions and depreciation, or when I had somewhat more complicated returns dealing with employer paid relocation, home sales & purchase etc.

Where I grew up, they taught us tax return preparation in high school (North Carolina). I'm not sure they do that anymore or other places.

A few years ago, I did switch from paper forms to tax software (Turbo Tax) and now I generally do it online using TaxAct (can be found thru the IRS website).

The main consideration I can think of to doing your own taxes is that rules change from year to year and you have to review the instructions carefully.

I've helped a few friends out with their returns over the years, and am always amazed at how some folks will pay to have even the simplest of returns prepared.

I don't think I want to do it for a living, but I feel like I could work for H&R Block if I wanted to. Pretty easy stuff, if you ask me.
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Old 01-26-2008, 11:13 AM   #14
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Quote:
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How many of you do your own taxes? Do you consider it to be worth paying someone to prepare your taxes?
I've always done my own taxes and like you, I don't have complications of self-employment or my own business. I do have a mortgage but you don't, and since you are an excellent bookkeeper, it doesn't seem worthwhile to pay someone to prepare your taxes.

I usually do mine by hand but whenever I can avail of free tax preparation software, I use it. Then, I am almost certain that the tax breaks are brought to my attention by the program. I'm too cheap to even pay the $40 or so to purchase my own copy.

BTW, Pentagon Federal Credit Union members: You can do your taxes for free using TurboTax. I haven't started yet but the ad should be available on the website when you are logged in as a member.
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Old 01-26-2008, 11:20 AM   #15
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Quote:
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I am 46, and although I'm an excellent bookkeeper, I have always had someone else do my taxes (probably because my father always had someone do his taxes). My returns are fairly simple. I'm single, and in addition to my job, most of my income is from stocls and mutual funds. And no mortgage. I've been thinking that with since I'm already filling out all my information for my tax preparer, wouldn't is just be easier and cheaper if I just do my own taxes? But I always worry that if I do it myself, I may miss some tax break.
How many of you do your own taxes? Do you consider it to be worth paying someone to prepare your taxes?
I think you'll be surprised how easy it is to do it yourself. If you are nervous, then splash out $40 for software this year and do it yourself first, but stop before filing. have your regular CPA do it and compare results, ease of use and costs.
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Old 01-26-2008, 12:15 PM   #16
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Turbo Tax & TaxCut

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With TurboTax and TaxCut programs available for $40 or less, there is no reason to pay someone to do your taxes if they aren't complex. Looks like you should DIY.
Try free for either of them. Just saw an ad on Yahoo for Turbo Tax 'free downloadable' program.

I went with Tax Cut this year. Free is OK, just need to be willing to put up with the ads to upgrade for $12.95.

EFiling is free too.

-- Rita
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Old 01-26-2008, 12:22 PM   #17
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I always do my own. I built my own spread sheet in Lotus 1-2-3 to calculate my taxes. I find this helpful because it keeps me up to date on my tax picture throughout the year and helps me with tax planning. When filing time comes I use the free version of TaxAct, mainly because I don't like filling out the forms. BTW, my spreadsheet version always agrees with TaxAct to within a dollar or two, which I assume is due to roundoff.
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Old 01-26-2008, 12:22 PM   #18
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Try free for either of them. Just saw an ad on Yahoo for Turbo Tax 'free downloadable' program.

I went with Tax Cut this year. Free is OK, just need to be willing to put up with the ads to upgrade for $12.95.

EFiling is free too.

-- Rita
Rita, where did you find a free download for TaxCut?
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TaxAct - Not TaxCut
Old 01-26-2008, 12:27 PM   #19
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TaxAct - Not TaxCut

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Rita, where did you find a free download for TaxCut?
My mistake -- sorry. But I've used TaxCut for years, and find TaxAct a reasonable faxsimile.

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Old 01-26-2008, 12:28 PM   #20
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My mistake -- sorry. But I've used TaxCut for years, and find TaxAct a reasonable faxsimile.

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Thanks, I was afraid that was the case.
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