Who does your taxes?

[Moemg]

I've always done my own taxes, primarily because I always want to know exactly what's going on. It's also a good mental challenge, kind of like puzzle solving. I've used TurboTax for about 15 years or so, and before that it was paper forms, Pub 17, and sometimes the Lasser books.

+1

 

[swakyaby]

It looks like respondents do their own tax preparation rather than tax professionals here by nearly 20:1. Very impressive! I think that Vanguard Flagship provides TurboTax Deluxe to its clients. I may try to shadow my CPA's tax prep for this year by using this software . . . and maybe become even more in awe of his skills!

 

[Cobra9777]

I always prepared my own returns and used Turbo Tax since the mid 90s. But several years ago, I did an expat assignment. Since then, Megacorp pays a Big-4 firm to prepare all my returns, including now in retirement. Under my tax equalization agreement, this will continue for several more years until the large foreign tax credit carryforward (which benefits Megacorp, not me) is consumed.

I maintain a spreadsheet to estimate and validate the so-called hypothetical return, which is the basis of what I actually pay Megacorp, and is relatively straightforward. The actual return is the most complicated thing I've ever seen. The whole process is a bit weird. The Big-4 firm is looking out for Megacorp's interest, not mine. And their system is beyond terrible. I get their latest 23-year-old college recruit every year (with names like Josh and Ashley), and I find multiple mistakes every year. I'm looking forward to doing my own return again someday.

 

[fidler4]

I have done my taxes for the past 30 years with the exception of one year where a girl I was dating, who worked at a CPA firm, did them for me. I started out doing the hand written version then switched to Turbo Tax many years ago.


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[MRG]

Jimbo125, thank you. I know I'm wasting my CPAs time and my money. When we started using her it made sense, complex returns. Think we'll chat about the tax planning, more value for me.

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[Sue J]

I have always done our taxes, starting with paper forms way back when and now doing them with an online tax site. Our are very simple, W-2, 1099-R, 1099-INT. This year many of us will get friendly with the new forms for ACA subsidy reconciliation. Nothing I can't handle. When I've had questions I know where to look and learn.

I worked for H&R Block for a few years where I learned how much I did not know but where to go to find answers.

I also do our younger son's taxes. He is self employed as a freelance audio engineer and all his income is 1099s. He's gotten quite good at keeping track of his business expenses and mileage and he is diligent about his estimated payments. He asked me to help him with Obamacare enrollment last month and the sticking point for him is that his income is so uneven that it's hard to estimate annual income.

If any of you need a simple, but FREE tax filing site we have been using FreeTaxUSA® FREE Tax Filing, Online Return Preparation, E-file Income Taxes for many years. Federal filing is free but they charge for the state filing so I just go to our state site to file for free.

Since I have always enjoyed this type of thing I do a spreadsheet in the fall to get a guesstimate of where we are tax wise for the year. We have not itemized in many years (no mortgage interest, low real estate taxes) so it's been fairly simple.

For the past few years I have been helping my elderly Dad with his finances. He has used the same accountant for a long time so I prepare all the info for him to send to his accountant. It seems silly to pay for this, I'm doing all the prep work, but I would not expect my Dad to change after all these years.

 

[Nunthewiser]

I have always done my own, but I got a bit of a head start early on when I (briefly) became an IRS Revenue Officer (lasted less than a year). We got about a week's worth of training- this was pre-PC and TurboTax in 1977.

Since then I have always either done it manually or used Tax Act.

As for the OP's question, I see no reason not to DIY , particularly where nothing basically has changed. Just make sure your result comes close to matching what the pro did last year. Start early and if you get wobbly you can always punt to a pro.

 

[Walt34]

We've been using TurboTax or one of the others since about the early to mid '90's. But ours our pretty simple, no business income/expenses, rentals, or any of that complicated stuff.

Before that we did it ourselves by hand.

 

[38Chevy454]

Another DIY'er, always have. Used to be paper and bought the JK Lasser books, then been using TT for many years. Even with rental properties, moving state residences, and small home based business. Just need to put the info where it belongs on the returns.

The main thing I see is you need to understand the tax rules and how it works, so you know what expenses and receipts to keep. This is no different than a paid preparer that asks for the info, you have to know what is needed to help the preparer. So it becomes a simple enter yourself task and the software puts it in the right place and correct calculations.

I also do a couple easy trust returns, and do those by hand. Just less trouble than trying to do them with the software.

 

[iac1003]

I used to do my own but when my business got more complicated, I had a rental property, then 2 homes with mortgages, investments and AMT I switched to an accountant about 19 years ago. I always spend a lot of time gathering everything (it used to be 2 full weekends when I was in private practice) & organizing it for my CPA.

He is going to retire soon and so am I. Once both are done - the retirements of him and me - I will have more time to understand the taxes on capital gains and dividends of our after-tax mutual funds and ETFs and the new traditional post-tax IRA I set up, DH's RMD and such, and hope I can do it myself again. I usually run some tax software first anyway so I see if I have to send more $ with my last 2 quarterly payments and have a rough estimate of what we might still owe in April. I was trying to defer some income to not be bumped into a higher tax bracket for 2014 but I just had too much darn w*rk.

I am not naturally good with numbers AT ALL so this is a real unenjoyable challenge for me. But it seems I am paying my CPA a lot more than most of you. Another expense I will be happy to cut.

My BIL is a tax preparer but he stopped giving out free advice to family members a long time ago. I used to call him with questions when I was stumped, long before the advent of DIY tax software. Recently I emailed him about HSA contributions after 20+ years of not asking him any questions. He answered me promptly and didn't charge me


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[scrabbler1]

I tried to do that with Federal last year and gave up. Too darn many "mini-worksheets" where the number you put on the form is a function of your Adjusted Gross, your house number and the spot price of the Argentine peso. As I noted earlier, I find that aggravating. You've got more smarts/patience than I do.

The income tax spreadsheet I created is part of the larger spreadsheet which includes my checkbook register. This enables me to link tax deductible expenses and my investment income (taken as cash deposits) to the skeleton tax forms. I have also added those annoying tax booklet worksheets, especially the one which calculates income taxes when I have LTCG and QD income. In 2008, I had a lot of one-time worksheets with the income spike from cashing out the company stock, so I got rid of those extra the following year. It was also nice to delete the NJ non-resident and NY Resident Credit forms 5 years ago after I ERed. My spreadsheet also enables me to do a lot of what-ifs which are vital in determining estimated taxes.

 

[sengsational]

I think that tax software should have another interview for after you submit your taxes with the purpose of building a pro-forma return for the next year.

It could ask you if values just submitted would be similar the following year. They'd have to stress that it's only an estimate, but it would be a lot better than nothing, and somewhat better than plugging estimates into another copy of the previous year's software.

 

[rodi]

I should add - one of the reasons I do it myself is because the ONLY time I hired a CPA to do my taxes, she missed a pretty big item.

It was a year I changed jobs, moved states, sold a house, bought a house, had a move package and signing bonus, and had tax gross-up on the move package and signing bonus. I felt like there were too many moving parts - and wanted a professional CPA to do it.

She missed the fact that I had seriously over paid SS that year (because of the signing bonus, 2 different employers, etc.)

Fortunately, the IRS caught it and gave me a HUGE refund.

Using Turbo Tax - the way they input the data, etc... they'd catch that. I wish I'd purchased TT to double check the CPAs work.

 

[Sunset]

This is what tipped me off to potentially doing things myself. I gathered and organized everything as completely as possible, and it seemed like I was simply handing over the paperwork to the CPA to fill in the IRS forms.

+1 on that....

I do corp tax, my own with rentals, multiple country returns, stock sales, option trading call and puts, self employment.
Turns out to be quite a bit of effort, but thousands cheaper than CPA's - last bill years ago for part of was over 2K

Last yr, the State shorted us some as we didn't include the form (from the State) as the form said "don't mail with your return".
So I mailed them a copy of it and avoided being bitchy about it as they are real dummies and wouldn't see the humor !
We got sent the owed $$$ after about 2-3 months wait...

I cannot die, or DW will be totally lost taxwise
I will simplify it over a few years as it feels like work Jan to April

 

[Rothman]

Turbotax online is my method, works out very well. When I worked overseas my company paid for tax service, I found 1-2 mistakes every year in my cursory review so the aura of tax professional was dispelled. To be fair these were always young new employees at the accounting firms so I never really had an experienced pro. The best part of turbotax is it keeps past year info for comparison.


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[pb4uski]

....She missed the fact that I had seriously over paid SS that year (because of the signing bonus, 2 different employers, etc.) ...

Heck, when I was in practice over 35 years ago that was one of the things that we would check for as SOP.

 

[Gatordoc50]

I have done my own taxes for all but a handful of years. If there was a major occurrence, I would defer to a CPA. I think knowing a bit about the tax code was invaluable to reaching FIRE.

 

[nwsteve]

Also a long time TTax user. I have used CPA for my small business corporation. Quality and consistency by CPA is a real issue to be aware. I have my company corporate return done by the same firm for about 10 years--I could always tell when they had a new junior
For personal returns, like other I found a lot of the return cost was driven by junior accountant reentering my data from their workbook. Senior would "review" but unless you had flagged areas of concern generally would not catch errors. I had as many years of errors as done well. I finally gave up on CPA for personal return and pay my CPA doing my corporate return by the hour to answer issue specific personal return questions. For example, on capital improvements for my rentals (think appliances), what level of spending can be expensed instead of capitalized. Answer $500).
Nwsteve

 

[Lisa99]

For the last 6 years we've used a CPA. I started using him when we bought several rental properties in one year and went into a fixed term private partnership.

Last rent house is under contract and will be sold on January 15 and the parter ship closes this year too.

With all of those complications gone I can go back to doing our own taxes starting with our 2016 return.

He's done a great job and his fee has been worth it to my piece of mind.

 

[athena53]

She missed the fact that I had seriously overpaid SS that year (because of the signing bonus, 2 different employers, etc.)

Fortunately, the IRS caught it and gave me a HUGE refund.

Using Turbo Tax - the way they input the data, etc... they'd catch that. I wish I'd purchased TT to double check the CPAs work.

I've been in the situation of overpaying SS a few times and the software always caught it. I'd really wonder about a CPA who either didn't use software or used a program that was so primitive it didn't catch that.

I used to work in a small consulting firm and the old guy who ran it always submitted the final corporate taxes in a handwritten version. He was scrupulously honest, but figured that a handwritten version would give the impression of a simple Mom-and-Pop operation (which it pretty much was) and they were less likely to be audited. They never were audited.

 

[FIYes]

I did our taxes back in the pre-personal computer days. I remember Pub 17. When Turbo Tax came out I used it...more for the gosh, wow, I get to use a computer to do this than any real need ...our tax situation was very simple. Then DH bought a small business and we switched to a CPA. We continued using the CPA after the business was closed....just out of habit. Then two years ago when I picked up our return it showed that we owed $1200 more than I expected. Our tax situation was basically the same as prior years. I asked for an explanation. While I waited to talk with someone I saw the error I pointed it out to the firm's employee...CPA was out of the office. His reaction was "I don't know maybe CPA will know". I left the taxes and they called in a couple of days and said you are right and fixed the error. No apologies just "hey we fixed it. " A quick year to year review would have shown them the error and it concerned me that the employee, who was preparing taxes couldn't see it.

Last year I used turbo tax and plan to this year.


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[Jmo1969]

P



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