Why not paper-file taxes?

[W2R]

I won't ever do it by hand anymore now that I've used TT or similar for a number of years. Reasons: [...]

There's one more reason:
9) Doing taxes is inherently depressing. Doing taxes and filing them electronically, makes the task a little less onerous and more fun. I'm not poor so therefore I cut myself a break.

 

[Independent]

I always mail paper.

I have an excel worksheet that I update with one more column every year*. It's nice to compare consecutive years. I type my few numbers into the free TT site to check my total. I use the online fillable pdf files, then print them out. (My state form is a little friendlier than the federal because it does the math.)

I don't take the chance of a data breach at a vendor. My wife is even more old-fashioned than me. I save a few bucks.

It annoys me that the IRS doesn't have a free online calculate/file option. It seems that they could easily do something that would work for half the population. I'd feel more comfortable with efile if I were on a .gov site.


*That's the same file I use during the year to make sure I'm on track for withholding.

 

[RobbieB]

I will gladly pay the $25 to efile the State.

The alternative is go to the Post Office and fill out the form and wait in line to pay for certified mail. That's the minimum required to prove that you mailed them in time.

 

[gerntz]

The number of threads each year on the cost of tax programs & how to file taxes never ceases to amaze me. They're the same things over & over.

 

[Walt34]

I will gladly pay the $25 to efile the State.

There is that - I'd forgotten about how some places have horrible counter service at the P.O. We go to a little country P.O. and if there is any line at all it is at most two or three people.

If I had to stand in line for a half hour or more that changes the equation entirely and I'd cough up the $20 to e-file state.

 

[REWahoo]

I think you are on to something...

The number of threads each year on ______________[select one or more from the list below]_______________ never ceases to amaze me. They're the same things over & over.

1. whether or not to pay off the mortgage early
2. can I retire now
3. where to live after retiring
4. how much is enough
5. what will I do for health insurance until age 65
6. the proper way to squeeze a nickel
7. how long should I drive my car before replacing it
8. the cost of tax programs & how to file taxes
9. whether or not FIRECalc includes taxes
10. whether or not to take my pension as a lump sum
11. how to keep kids off my lawn
12. when to take Social Security

Thankfully wild or farm raised salmon dropped off the list...

 

[Walt34]

You left out when to take Social Security.

 

[REWahoo]

You left out when to take Social Security.

Sure did. I'll add it.

 

[W2R]

Sure did. I'll add it.

Asset allocation.

How to withdraw money after retiring (because I am so virtuous, and only know how to contribute )

What should I do to keep from getting bored in retirement.

How can I squeeze the absolute top dollar out of my investments (forget about risk!)

What is the best credit card? Highest interest savings account?



Honestly, I don't care how many times I see these topics. Love them all.

 

[REWahoo]

Asset allocation.

How to withdraw money after retiring (because I am so virtuous, and only know how to contribute )

What should I do to keep from getting bored in retirement.

How can I squeeze the absolute top dollar out of my investments (forget about risk!)

What is the best credit card? Highest interest savings account?

+1

The list is almost endless...

 

[Dreamer]

I took my taxes to a CPA one year, when I was unsure of something. I did not like the cost. I always do my taxes by hand and mail them in. Every year, I think that I will try one of the software packages, but I have a fear of the unknown. What if I misread the question and it does my taxes wrong. Ignorance of the law is no excuse. Maybe I will be brave this year. When we start taking money out of our 401Ks or IRAs or have to do RMDs, then I will probably either use the software or take it to a CPA.

 

[Walt34]

What if I misread the question and it does my taxes wrong. Ignorance of the law is no excuse.

That's unlikely, the questions are phrased pretty simply, I'm sure they're designed for people with less than a high school education. And if you don't understand a word, phrase, or question, every one is riddled with links to definitions and explanations. For a simple return with say income only from one or two W-2 forms and some dividends and interest, I'd wager a reasonably bright fifth grader could do it.

The only time the IRS gets really upset with someone is deliberate fraud to avoid taxes that are due. Making a mistake in a software program or a return done by hand is not a criminal act. In that scenario the worst that will happen is that you would feel embarrassed over the mistake and have to pay the overdue taxes and any accumulated interest on it.

 

[meierlde]

That's unlikely, the questions are phrased pretty simply, I'm sure they're designed for people with less than a high school education. And if you don't understand a word, phrase, or question, every one is riddled with links to definitions and explanations. For a simple return with say income only from one or two W-2 forms and some dividends and interest, I'd wager a reasonably bright fifth grader could do it.

The only time the IRS gets really upset with someone is deliberate fraud to avoid taxes that are due. Making a mistake in a software program or a return done by hand is not a criminal act. In that scenario the worst that will happen is that you would feel embarrassed over the mistake and have to pay the overdue taxes and any accumulated interest on it.

Way back when I was in eighth grade in Arithmetic, we got an IRS kit with forms to fill out with various scenarios. (In the 1965 time frame). So back then at least it was expected that 8th graders could do it.

 

[pb4uski]

I would rather have bamboo splints shoved under my fingernails than do my own federal and state tax returns by hand, print them, collate them with the 1099s and mail them. I figure it costs me $60... $40 for the software and $20 to e-file my state return... given that I get 4 more federal e-files that I use for some relatives that is probably the smartest money that I spend in any given year.

There is a very thin line between frugal and cheap, but IMO doing your taxes by hand crosses that line.

It would be one thing if I didn't have them money but the trade-off of money for convenience is an excellent value, especially compared to paying to have your return prepared.

 

[mystang52]

OP here. As I posted a few replies back, I fully expect to give in and pay the freight. My original post was just thinking aloud. I like Turbo Tax but got spoiled from years of having it for free; but State Farm Bank stopped that benefit beginning this year.

 

[Rustward]

<snip>
Every year, I think that I will try one of the software packages, but I have a fear of the unknown. What if I misread the question and it does my taxes wrong.
<snip>

OK. What if you used the IRS forms rather than a software package to do your reporting and you misread the instructions for the IRS paper forms and you did your taxes wrong?

What is the difference?

To see how it all works, you could do your taxes both ways (IRS forms and software) and compare the differences. If there are no differences, then you are good to go. Differences would have to be researched and explained -- or more likely you would change one of either the hand made return or the software-produced one so that they both match.

I would encourage you to try a tax software package, and, if you would like, do the return in parallel on paper, do that and compare the results and account for any differences.

 

[Dog]

I do out taxes by hand with pencil and calculator and then enter to online forms, print several copies and mail via certified mail.
I enjoy working through the forms and keeps me aware of how the taxes are calculated.
I have the time and enjoy it...so why not?

 

[meierlde]

I took my taxes to a CPA one year, when I was unsure of something. I did not like the cost. I always do my taxes by hand and mail them in. Every year, I think that I will try one of the software packages, but I have a fear of the unknown. What if I misread the question and it does my taxes wrong. Ignorance of the law is no excuse. Maybe I will be brave this year. When we start taking money out of our 401Ks or IRAs or have to do RMDs, then I will probably either use the software or take it to a CPA.

At least with TurboTax you can use the forms method and ignore all the interview. Essentially it presents you with a 1099 INT Div R etc for each payee, and you fill that in. It also presents you with a 1099SSA etc. It then takes the amounts, and puts the appropriate amounts on the various forms. You will find tax and interest worksheets, medical expense worksheets etc. Note that for example on Schedule A you can always click on a line and it will tell you the data source. The program does the math to see if you are subject to amt also.

 

[respond2u]

I had been buying Home and Business TurboTax , but that doesn't fit in my FIRE budget.

In order to figure out the impacts on taxes and ACA subsidies (SEPP w/d, roth conversions, side jobs, etc), I built a bunch of it it Excel so that I could run What-If scenarios, double-checking the results with 2015's TurboTax.

So this year, I plan to do my taxes by hand (paper forms from Post Office, Web, or Library), double check with Excel and sanity check with last year's TurboTax.

For 2017, I have fond hopes for the promised "fits on a postcard" result (and with retirement, should have a significantly simpler return).

 

[pjm-7]

For simple returns use the the IRS free file refillable forms. The program does some math calculations. I do use paper and mail for my state return since I need to provide documentation for a tax credit that I claim.

 

[Mdlerth]

Don't you have to file by mail anyway if you owe them money? I never get a refund. I always end up mailing them a small check, so when TT prints out the forms, I send it all in one envelope.

 

[cathy63]

Don't you have to file by mail anyway if you owe them money? I never get a refund. I always end up mailing them a small check, so when TT prints out the forms, I send it all in one envelope.

If you want to efile, you can give them your checking account number and routing number and they'll use ACH to take the money you owe them right out of your account.

 

[starry night]

IRS.gov....not IRS.com

The IRS does not charge you to file electronically.
If you want to efile for free then you can,
https://www.irs.com/file-taxes-online

Beware using IRS.com (cited in prior message). This is NOT IRS website.
Use FreeFile on IRS.gov!!
Quoted from irs.com disclaimer: "IRS.com is in no way associated with or endorsed by the United States Department of Treasury or the Internal Revenue Service. It is a non-governmental, privately owned website, operated by Banks.com, Inc."

 

[Johanson]

I used to file paper only with my state because because I knew it was cheaper for them to have people file electronically but yet they charge those same people for that. To me, that is BS. But, I'm also lazy. I've been using H&R Block's filing software for years now and can finish my taxes in minutes with it importing prior year's taxes. So I just pay the state's e-filing fee and am done with it.

 

[Quest4Fire]

I think this is a 2-part question.

1. Do you do your taxes by hand without software? I tried that a few years ago with a State return for my state of residence (had downloaded the version for my employment state and didn't want to pay for a second one). I'm an actuary, math-friendly, legal-ese friendly, Excel-friendly. Still too many "mini-worksheets" and twists and turns and I made a few mistakes, which the state's computer flagged. I owed more $$, of course. Now I use software. Always.

2. Do you e-file or send a paper copy? I'm old-fashioned. I send a paper copy. I just figure I'll make them work for the details if they want them rather than giving them data to mine. That's delayed refunds in years when I overpaid, but I'm willing to wait. Never had a problem with returns going astray.

+1.