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Old 03-28-2015, 10:30 AM   #21
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Each tax situation is different. It takes varying amounts of time to do the work, depending on the book-keeping you do, how well you present the data, etc.

Some charge by the form, others have a fixed amount for ordinary taxpayers and might add additional costs for some forms. Some include one state, some not.

If you been using tax software XYZ for 10 years, then you're probably more organized and competent than others.

If my time is worth is $50 per hour, and my tax package costs $500.00, then I break even at 10 hours. With a business, rental, and various 1099's, DIVs, INT, you could easily spend a few days on this.

Each year I gain additional knowledge, and discover something that causes me to track things a little different in the current year. So if you have no interest in numbers, and totally trust your tax preparer, then let them drive.

OTH, I think everyone needs to look under the hood and understand a bit more. The comparison of free software > $49.95 > $495 means something, but fixating on the prep/software cost alone doesn't maximize your long-term benefits.
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Old 03-28-2015, 10:48 AM   #22
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I just paid $425 to have my taxes (state and federal) done.

I used to use turbo tax. One day, I came home from work a bit early to change to play in our golf league. Checked the mail. IRS says I owe them something north of $3K. Instead of what I would have normally done, get frustrated and play poorly, I decided I would turn it over to an accountant. I remember I played well that evening because I had decided to delegate the task to a pro. Got a recommendation for an accountant, paid only a couple of hundred bucks for 3 years of amended returns, and, found the IRS owed me about $2K.

So, how much did I save using turbo tax? It cost me. What goofed me up was stock awards, HSA contributions, and 529/College Savings withdrawals…. I thought I carefully answered all of the questions, but, apparently did not.

In retirement (next year) my returns should get more simple. I'll go back to doing them myself.
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Old 03-28-2015, 10:59 AM   #23
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There's a tax and accounting firm that our company is affiliated with and they seem to charge about $450 for a pretty basic return. I think that's above average in general but probably about average for larger firms. I've used TurboTax for years and the most complicated thing we've had to do so far is Roth contributions combined with conversions. A little tricky but still very manageable once you work through it. I guess I would have a hard time paying typical professional fees for tax prep unless I had something really complex.
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Old 03-28-2015, 12:50 PM   #24
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I just paid $425 to have my taxes (state and federal) done.

I used to use turbo tax. One day, I came home from work a bit early to change to play in our golf league. Checked the mail. IRS says I owe them something north of $3K. Instead of what I would have normally done, get frustrated and play poorly, I decided I would turn it over to an accountant. I remember I played well that evening because I had decided to delegate the task to a pro. Got a recommendation for an accountant, paid only a couple of hundred bucks for 3 years of amended returns, and, found the IRS owed me about $2K.

So, how much did I save using turbo tax? It cost me. What goofed me up was stock awards, HSA contributions, and 529/College Savings withdrawals…. I thought I carefully answered all of the questions, but, apparently did not.

In retirement (next year) my returns should get more simple. I'll go back to doing them myself.

I think Turbo is very clumsy on the HSA deduction from self and not employer. My taxes are simple and I can eyeball what I am supposed to get so I knew the HSA part was done wrong. Every year I have to redo it before I hit the send button because of the wording they use.


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Old 03-28-2015, 03:55 PM   #25
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I think Turbo is very clumsy on the HSA deduction from self and not employer. My taxes are simple and I can eyeball what I am supposed to get so I knew the HSA part was done wrong. Every year I have to redo it before I hit the send button because of the wording they use.


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I found that using the worksheets/forms section to complete the HSA part is much easier. I answer their questions and then go back and fix it if something is on the wrong line.
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Old 03-28-2015, 07:50 PM   #26
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I almost embarrassed to say what we pay. $1300 this year. 1100 plus 200 for an additional state return. We probably overpay, but ever since we started with our current CPA several years ago, we get no letters from the IRS. Prior to that, we used a cheaper CPA and every year we had questions from IRS on our numbers related to stock transactions. So we are paying for his competence, if not his hours.

How complicated is our return? We currently live in NJ, and have 2 state returns since DH works out of state, plus the federal. We also have separate monies so we have a lot of financial forms from brokers and banks, with at least 20 stock transactions per year, but I organize all the information every year, so it's not like I hand him a box that looks like a box with raffle entries, he gets a binder with everything categorized.

So, we are moving soon and next year we will have a new CPA in our new home state, and only one state return again. And in a lower cost of living state we should not have to pay so much for the tax return service. Finally, I may try to use Turbotax in the future but I'm not ready to just yet with houses being bought and sold.
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Old 03-28-2015, 09:54 PM   #27
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If you have foreign tax credit, HSA withdrawals, multiple K-1's, plenty of donations, multiple brokerage accounts, cap gains, itemized deductions, rental property, IRA withdrawal/Roth conversion, redeemed savings bonds, state tax differences from Fed, it can add up pretty easily.
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Old 03-28-2015, 10:13 PM   #28
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If you have foreign tax credit, HSA withdrawals, multiple K-1's, plenty of donations, multiple brokerage accounts, cap gains, itemized deductions, rental property, IRA withdrawal/Roth conversion, redeemed savings bonds, state tax differences from Fed, it can add up pretty easily.

This is what I have found although we have no more rental property. But Schedule C, foreign tax credits, RMD withdrawals for DH, brokerage accounts, etc.

I am not a math nerd and all the numbers get me buggy. I used to do our tax return until 20 years ago and it took me days (before online software) but I heavily relied on my BIL who is a tax specialist to answer my questions. I think he got a lot of questions from various family members so he decided to not answer questions unless paid to do a return. I don't really want my DSis & BIL knowing the extent of all our holdings so we have been using a CPA since then.

$465, several schedules. I think it's going to get more complicated, not less, as I start to withdraw from our after-tax brokerage account next year, plan to sell our house and move and so on. We shall see.


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Old 03-29-2015, 08:26 AM   #29
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I use a local tax and bookeeping service to just do my taxes, nothing else. I organize the no's and have everything ready for him. I have one rental and hold one land contract, plus a couple 1099's. he charges me 65. a year. I know this is cheap and this year I wasn't busy so I did my own taxe on taxhawk.com plus had hime do them to find out how they compare and if there are any differences. I know he is a certified tax person and he uses software to complete as many returns as he does in a year, but it will be interesting to see if he is using the same or comparable software to what is availabe online. another reason to use the tax preparer is to make sure all the new regulations have been installed where on the internet software you never know.
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Old 03-29-2015, 09:17 AM   #30
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I use a local tax and bookeeping service to just do my taxes, nothing else. I organize the no's and have everything ready for him. I have one rental and hold one land contract, plus a couple 1099's. he charges me 65. a year. I know this is cheap and this year I wasn't busy so I did my own taxe on taxhawk.com plus had hime do them to find out how they compare and if there are any differences. I know he is a certified tax person and he uses software to complete as many returns as he does in a year, but it will be interesting to see if he is using the same or comparable software to what is availabe online. another reason to use the tax preparer is to make sure all the new regulations have been installed where on the internet software you never know.
He is using a professional tax package. This has a database of his clients and helps him manage the process. It's unlikely he's using one of the consumer versions. His package allows him to file on behalf of many clients.
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Old 03-29-2015, 03:49 PM   #31
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I have a fairly complicated return, and have for quite some time. I have always used TurboTax and never paid an accountant to do my returns. I like to know what is going on with my taxes at a detail level because I manage my portfolio to minimize taxes. For 2014, I paid .05% of my income in Federal tax. No, that's not a typo. How? Loads of option income sheltered by previous tax loss harvesting (will end soon), muni bond income, MLP's, high deductions for charity and interest, and use of foreign tax credits to offset all but the AMT portion of my tax bill.


Not only does TurboTax help with the filing, but it allows me to run what-ifs that are very valuable. Not sure I could find a tax accountant who would be knowledgeable enough to do that.
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Old 03-29-2015, 04:23 PM   #32
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My income is from pension, SS, dividends, and a very small amount of interest. I owe nothing to anyone. The house is paid off and medical is taken care of between Medicare and Tricare for Life. I don't come anywhere close to being able to itemize so I go to the library where AARP volunteers do my tax returns for free. Just to see if there is a difference I also use the free TurboTax from Vanguard and they always come out the same or within a few dollars.

I can't see paying anyone to do my taxes. In a few more years I will have to start taking withdrawls from our IRAs but that shouldn't change the complexity to the point where I would need to pay someone unless anyone can show me where I am making a mistake.

Cheers!
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Old 03-29-2015, 05:10 PM   #33
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I hate doing taxes. I worry over the details so much I spend hours checking and rechecking the numbers. I didn't think my taxes were very complicated this year, but my accountant managed to create a 56 page packet for my taxes. Last year it cost me $450. I haven't gotten a bill this year.

I quit a perfectly good j*b paying me over $50 an hour. Why would I want to do something very unpleasant that would likely take me more than 10 hours which I could have done for less than $500? And I don't want to think about the sleep I would loose thinking about it.

All that said, I am pretty tight, so when my tax return gets down to a few 1098s and the standard deduction, I probably will do it myself.
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Old 03-29-2015, 05:47 PM   #34
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$1300 this year. 1100 plus 200 for an additional state return. We probably overpay,
I definitely think you overpay.

but ever since we started with our current CPA several years ago, we get no letters from the IRS.
Almost everyone gets no letters from the IRS.

Prior to that, we used a cheaper CPA and every year we had questions from IRS on our numbers related to stock transactions. So we are paying for his competence, if not his hours.

How complicated is our return? We currently live in NJ, and have 2 state returns since DH works out of state, plus the federal. We also have separate monies so we have a lot of financial forms from brokers and banks, with at least 20 stock transactions per year,
Honestly, that doesn't sound complicated to me.
I really hope you give it a try next year. Just do it yourself with the software, and compare it to the results you get from a pro. I think you might be surprised.
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Old 03-29-2015, 06:13 PM   #35
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350 for my city, state and feds. Tax returns and shoveling snow are two things that I will gladly pay out the wazoo to never have to do again in life
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Old 03-29-2015, 10:42 PM   #36
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I think the main discussion point here is that *you* need to have a good understanding of your tax situation. If you understand the rules and forms, a self-prepared 1040 using TT or similar software is a very viable option. However, if you do not understnad it, then a paid professional is your best option. I have done my taxes with rental property (in past), have a small home-based side business, financial and pension 1099's, W-2 income, carryover losses, and more without any IRS audits or feeling I was not knowledgeable of the return amounts and minimizing the taxes i have to pay - which are always more than I like!

Whether you can afford the pro vs your tolerance for paying is another factor. I may spend approx 20 hours doing mine, but I do several checks before filing. Add in 1 or 2 states, and the 2 trust returns I do; and it easily gets near 20 hours. I would rather spend that money for a pro on something else. My time is worth the trade-off.
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Old 03-30-2015, 07:08 AM   #37
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I really hope you give it a try next year. Just do it yourself with the software, and compare it to the results you get from a pro. I think you might be surprised.
Thanks for the advice--you probably are right. Since this is the last year I am working, it is worth paying someone else to do it but next year and beyond, I will have the time and energy to do it. And I like the idea of doing it and comparing it to the return done by the professional as a comparison to get started.

Now if I could only get my DH who has a finance degree interested in helping!!! How is it that the science nerd does the taxes!!!
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Old 03-30-2015, 07:33 AM   #38
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I had always done my own taxes prior to marrying and I continued to do the taxes up to a couple of years ago when DH took over doing them. I had thought we might pay to have them done one time after we retire. My one concern is getting things right with capital gains. We've not previously had to deal with them much as we've been buy and hold folks.
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Old 03-30-2015, 07:46 AM   #39
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I had always done my own taxes prior to marrying and I continued to do the taxes up to a couple of years ago when DH took over doing them. I had thought we might pay to have them done one time after we retire. My one concern is getting things right with capital gains. We've not previously had to deal with them much as we've been buy and hold folks.
If you have the documentation on the purchase date/price, capital gains are trivial. Anything bought in the last couple of years has purchase information maintained by the brokerage or mutual fund company. Tax software will suck any transaction data from the 1099 and automatically put it in the right place in Schedule D.

I had a very old ETF in my ETrade account. ETrade didn't show any of the purchase information. I transferred it to Vanguard and it is shown on their website. I verified that it is correct with my documentation. I'll have to see if this is put onto the 1099 properly when I eventually sell.
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Old 03-30-2015, 08:24 AM   #40
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If you have the documentation on the purchase date/price, capital gains are trivial.
True, and consider if you don't have this info the CPA is no help. They can only work with the information you provide them.
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