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Re: What I learned in 1040 class.
Old 12-20-2005, 07:28 AM   #41
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Re: What I learned in 1040 class.

An essential part of our ER streamlining was to do my own taxes. They arent easier to do since the S Corp is still open and earning a very small income. I took my last return (2003) as prepared by my CPA and bought the 2003 Turbo Tax version on Ebay. Then copied the CPA's work onto the TT program. Once that was done it was "easy" to carry forward the 2003 TT data onto the 2004 program. All this took DAYS of research and head scratching...depreciation schedules, K1s, etc., etc. :P

Hopefully that time will make the 2005 return easier :

Does anyone else go to these lengths to DIY?
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Re: What I learned in 1040 class.
Old 12-20-2005, 08:17 AM   #42
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Re: What I learned in 1040 class.

For all the talk I do about taxes, I don't do them myself. Since our accountant retired and sold his practice to an accountant we don't like at all, I will have to do our taxes or get someone new.

Have mixed feelings about it.

One thing I learned in 1040 class was the extent choices have to be made when using software and how you still have to have pretty deep knowledge of the tax system, at least as applied to your own situation. This is especially true if you fall into or might fall into AMT.

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Re: What I learned in 1040 class.
Old 12-20-2005, 08:26 AM   #43
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Re: What I learned in 1040 class.

Quote:
Originally Posted by . . . Yrs to Go
Sorry for not being clear in any of my posts.

Taxes are too complicated.* It is unfortunate that there is a need for 1040 classes, or Turbo Tax, or tax accountants.*
I have no problem with taxes being complicated for people who have businesses and complicated investments. I do have a problem with the fact that taxes are becoming way too complicated for far too many people, thanks mostly to AMT. The different set of rules for AMT in contrast to regular tax rules should be thrown in the trash. Dump AMT and face upfront whether we want as policy to deny certain deductions and increase tax rates on those you want to pay increased rates. Because of AMT people have to do their taxes using two different systems. Because of AMT's huge marital penalty if you fall into AMT you might also want to do trial runs of married filing separately. Come on already.
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Re: What I learned in 1040 class.
Old 12-20-2005, 08:49 AM   #44
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Re: What I learned in 1040 class.

Quote:
Originally Posted by Martha
...I do have a problem with the fact that taxes are becoming way too complicated for far too many people, thanks mostly to AMT.* The different set of rules for AMT in contrast to regular tax rules should be thrown in the trash.* Dump AMT and face upfront whether we want as policy to deny certain deductions and increase tax rates on those you want to pay increased rates...
I don't know about dumping AMT in the trash, but at the very least they should increase the threshold for qualifying for AMT, say MAGI of $500K or so, INDEXED FOR INFLATION.* That would relieve most of the middle class population for whom it was not intended.

There should never be a "surprise" tax.* Taxes have two purposes: To generate revenue for the government and to shape social policy.* The surprise AMT clearly accomplishes the first goal, but also borders on extortion when it hits those that were not supposed to be affected by it's original intention back in the late 60's.
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Re: What I learned in 1040 class.
Old 12-20-2005, 08:57 AM   #45
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Re: What I learned in 1040 class.

I used to do my own taxes. Even when I had Fed, state and Puerto Rico to do, I did them all. *However, life became complicated somewhere along the way and AMT, interest carry forward, estate taxes, AMT credits etc. etc. have all made this more of a nightmare than I care to deal with while still working 60+ hours a week. *I don't have the time to keep up with the changes in the tax laws and my accountant has all the past stuff on his computer so I don't have to remember it. *I don't mind paying someone to take care of the tax returns I have to file now. *Fed. and state for DW and I and Fed. and state for my late wife's trust. *

After we retire our tax issues will be less than today and I will start doing them again. *

Be careful about using popular tax software programs. *My experience was that they do not always ask the correct question or handle data exactly the same and it can cost you. *They are far better than several years ago but knowing what they should be doing helps you keep them honest and may prevent you from paying too much.

It would be wonderful to do your taxes on a 3X5 index card but I don't see that as long as all the special interest groups have their fingers in the pie. *A straight flat tax with no deductions or credits would allow this to happen. *It will be a cold day in hell before we would ever see that in this country.
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Re: What I learned in 1040 class.
Old 12-20-2005, 09:45 AM   #46
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Re: What I learned in 1040 class.

Quote:
Originally Posted by BUM
An essential part of our ER streamlining was to do my own taxes. They arent easier to do since the S Corp is still open and earning a very small income. I took my last return (2003) as prepared by my CPA and bought the 2003 Turbo Tax version on Ebay. Then copied the CPA's work onto the TT program. Once that was done it was "easy" to carry forward the 2003 TT data onto the 2004 program.* All this took DAYS of research and head scratching...depreciation schedules, K1s, etc., etc.* :P

Hopefully that time will make the 2005 return easier :

Does anyone else go to these lengths to DIY?
I would have to. Too lazy so far.

JG
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Re: What I learned in 1040 class.
Old 12-20-2005, 11:24 AM   #47
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Re: What I learned in 1040 class.

Quote:
Originally Posted by Martha
For all the talk I do about taxes, I don't do them myself. Since our accountant retired and sold his practice to an accountant we don't like at all, I will have to do our taxes or get someone new.
Have mixed feelings about it.
Martha, I have been using turbo tax for about 7 years and it's been a very helpful tool for me so far.
Why don't you or Greg buy TT with your state when it is on sale (about $30 with rebates) and do a parallel trial, you may be mildly surprised.

MJ
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Re: What I learned in 1040 class.
Old 12-20-2005, 12:17 PM   #48
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Re: What I learned in 1040 class.

Quote:
Originally Posted by davew894
The IRS isn't your friend, your advocate or your ally.
Neither is that $400 tax preparer. Especially when the first piece of paper they hand you is an extension request so that they can clear out their customer backlog on your time do some more research on your itemized deductions. It feels too much like handing your credit card to a car dealer and saying "Pick me a winner, OK?"

I've always done my own taxes since my father sat me down with my first paycheck to show me how to get all those taxes back (some of them, anyway). TurboTax has become a godsend to automation & tweaking, although that's no substitute for looking up the pubs.

No one can become as much of an expert on your tax situation as you can. Your CPA isn't in the business to teach you either. I don't slaughter my own beef or raise my own chickens, but I figure that it's well worth my time to learn how to do our taxes and thus also learn how to avoid incurring them in the first place.
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Re: What I learned in 1040 class.
Old 12-20-2005, 01:52 PM   #49
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Re: What I learned in 1040 class.

Or the $800 preparer as in our case, who also couldn't get our taxes done on time.

I might give a TT trial run against an accountant for this year. Our returns and schedules last year were about an inch thick. I dread imputing all the data for the first time. I also hate dealing with the AMT mess.
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Re: What I learned in 1040 class.
Old 12-20-2005, 02:21 PM   #50
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Re: What I learned in 1040 class.

Do my own, important to know and keep up with the tax code for work (represent some small businesses).

I use the tax programs, and think they do a good job, but it sure does help to know where they go off, or don't properly evalute a matter.
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Re: What I learned in 1040 class.
Old 12-20-2005, 02:25 PM   #51
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Re: What I learned in 1040 class.

Do my own, but with only a few cap gains, divs, and a mort ded, it's a no brainer... :
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Re: What I learned in 1040 class.
Old 12-20-2005, 05:00 PM   #52
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Re: What I learned in 1040 class.

Quote:
Originally Posted by Martha
Our returns and schedules last year were about an inch thick. I dread imputing all the data for the first time. I also hate dealing with the AMT mess.
With the little that I input, I get about a 1/3 of an inch of paper for my Fed/state returns. TT reuses the information you entered to automatically generate the additional paperwork.
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Re: What I learned in 1040 class.
Old 12-20-2005, 08:36 PM   #53
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Re: What I learned in 1040 class.

Another reason to file online, including electronic payments, from News Of The Weird:

Latest Truck Spills
(1) "Hundreds" of Krispy Kreme doughnuts, onto Vineville Avenue in Macon, Ga., in September, when a delivery truck overturned to avoid a dog.*
(2) 30,000 pieces of mail to IRS (mostly estimated-tax payments), into San Francisco Bay in September when a truck was involved in a collision on the San
Mateo Bridge.*

(3) 35 tons of cooking oil, onto already-icy Interstate 65 near Lowell, Ind., in November when a tanker overturned.*
(4) And just hours apart in June in Ohio, one truck overturned, spilling 19 tons of stick dynamite on Interstate 70 near Summerford (forcing nearby evacuations) and another carrying 16 tons of toilets overturned on Interstate 275 near Sharonville.

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Re: What I learned in 1040 class.
Old 12-21-2005, 02:17 AM   #54
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Re: What I learned in 1040 class.

Quote:
Originally Posted by Nords
Neither is that $400 tax preparer. Especially when the first piece of paper they hand you is an extension request so that they can clear out their customer backlog on your time do some more research on your itemized deductions. It feels too much like handing your credit card to a car dealer and saying "Pick me a winner, OK?"

I've always done my own taxes since my father sat me down with my first paycheck to show me how to get all those taxes back (some of them, anyway). TurboTax has become a godsend to automation & tweaking, although that's no substitute for looking up the pubs.

No one can become as much of an expert on your tax situation as you can. Your CPA isn't in the business to teach you either. I don't slaughter my own beef or raise my own chickens, but I figure that it's well worth my time to learn how to do our taxes and thus also learn how to avoid incurring them in the first place.
Right-on. I've always done my own taxes except for one year. That year I was very busy and had some complicated tax issues. The preparer told me that we had to file an extension, and that it would cost X. IRS sent me a bill for 10X. Then I had to redo the tax return because the accountant made some mistakes which would have cost me thousands. I wrote a letter to the IRS explaining the situation and they forgave the $4000 penalty!

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Re: What I learned in 1040 class.
Old 12-21-2005, 03:32 AM   #55
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Re: What I learned in 1040 class.

uncle drz (and others)..
In what areas have you experienced the tax software to "go off??

Used to do my own, then with a small business gave the job to the business's tax preparer. It went OK for a few years and was quite a relief to see his nice little presentation folder.. "just sign here!" Then in 2003, his bills had gotten up to $800! One of his assistants tried to pin an extra $250,000 of CG on our house sale (gee, forgot about that extra marital exemption...), so as of then I started back up doing 'em myself.

I e-filed for the first time last year (and I HATED having to pay for it.. so unfair since we are saving the IRS work inputting it!). That's because living overseas I didn't want to worry about mailing/proof of mailing/traceability.. I was glad to see the electronic receipts w/in a day or two, and my refunds direct to my bank account w/in the week! That was worth something, since I didn't have to pay for registered mail and so forth.

The advantage of the software is also in being able to play around with different scenarios, esp. WRT IRA contributions before the filing deadline. P.S., pay close attention to this.. I got kinda screwed out of one year's Roth contributions because I assumed I had 'til my filing deadline (August) which was indeed the case for the SAR-SEP I have. The Roth, however, is April 15 or bust!* Why? Why? Why? This is the kind of needless complication that needs to be purged from the tax system, if nothing else.
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Re: What I learned in 1040 class.
Old 12-21-2005, 04:21 AM   #56
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Re: What I learned in 1040 class.

l-fina
Without going back over the actual returns, I'll not be able to be specifc.
I do remember a few years ago Tax Cut was confusing in the instructions regarding the pension plan and had I not known the specifics it could have caused incorrect reporting (deductible to company vs individual). I also remeber that in asking for deductions, the interview only follows the form, whereas many valid business expenses are not specified on the form so if you rely only on the interview you may miss some valid expenses.
In general, the programs do a good job, but I would suggest reading or at least skimming the IRS publications and not rely completely on the computer programs.
Nonetheless, I use them because they do a good job, and the calculations part alone, IMO, makes it worth the money.
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Re: What I learned in 1040 class.
Old 12-21-2005, 07:30 AM   #57
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Re: What I learned in 1040 class.

Quote:
Originally Posted by Martha
Or the $800 preparer as in our case, who also couldn't get our taxes done on time.*

I might give a TT trial run against an accountant for this year.* Our returns and schedules last year were about an inch thick.* ** I dread imputing all the data for the first time.* I also hate dealing with the AMT mess.*
Martha, in the years I was subject to AMT (sure to be coming back for me), I can't imagine how I would have gotten through the AMT disaster if I hadn't had TT.
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Re: What I learned in 1040 class.
Old 12-21-2005, 08:14 AM   #58
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Re: What I learned in 1040 class.

Quote:
Originally Posted by ladelfina
I e-filed for the first time last year (and I HATED having to pay for it.. so unfair since we are saving the IRS work inputting it!).
Although, I don't take advantage on it, TT includes (as of 2004) 1 free e-filing.

MJ
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Re: What I learned in 1040 class.
Old 12-21-2005, 10:18 AM   #59
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Re: What I learned in 1040 class.

Quote:
Originally Posted by uncledrz
Nonetheless, I use them because they do a good job, and the calculations part alone, IMO, makes it worth the money.
If TurboTax has a serious calculation/algorithm/legal error that didn't get corrected before April then I've never heard of it. There are at least as many Intuit-bashers out there as Microsoft-bashers, so I suspect the Intuit folks are extra terrified careful & conservative at their software.

Heck, I whine every time I have to do a six-page schedule D on the computer. I'd never be able to return to doing two federal returns (plus an AMT calculation) and two state returns with paper & pencil.
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Re: What I learned in 1040 class.
Old 12-21-2005, 10:23 AM   #60
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Re: What I learned in 1040 class.

MJ, I vaguely remember that, but I seem to remember also that because I filed with extensions, I'd missed the deadline to get the rebate. Intuit really sux.. they love to send everyone through lots and lots of rebate hoops, and there is frequently some kind of catch.

Dunno why... I haven't come across any other software companies that bother to do this.
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