Why not paper-file taxes?

[Rustward]

Quote:

Originally Posted by Dreamer <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]

Quote:

Originally Posted by 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.

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]

Quote:

Originally Posted by 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.

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]

Quote:

Originally Posted by Alan 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]

Quote:

Originally Posted by athena53 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.

[GrayHare]

Quote:

Originally Posted by 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.

Technically all you need do is pay the tax you owe, which means you need not file any forms at all.

[friar1610]

Quote:

Originally Posted by Walt34 So did I before they began accepting e-filed returns. And I still print and mail the state return - I'm sure not gonna pay to efile!

That annoys the hell out of me, too. So I exile Fed and paper file State. (MA)

[rodi]

I use turbo tax to calculate my taxes. I also review the forms (in form view) to make sure I understand them.

If I am owed a refund, I e-file my return for free as soon as I've done my taxes.

If I owe... I mail it in with a check, about 1 week before the due date.... no need to give the money sooner.

For state, regardless of owing or not, I file a paper return. California and turbo tax charge for e-filing. I'm cheap. If I am owed a refund, I mail it in early, if I owe, I mail it closer to the due-day.

I get my money's worth out of TT, since I also do my MIL's taxes (DH is her legal guardian.) We have to paper file that return because of the guardianship.

[Luck_Club]

OK.. Maybe it is outdated at this point, but hear goes my rational. My first accountant TOLD me to paper file. This was back in the mid 90's and e-file was just starting and he said "Why make it easy for them to audit you? If you e-file the software on their server does all the checking automatically. If you file on paper, they at least have to enter the data either by hand or scanning. If they are going to audit me I want it to be as difficult as possible."

Been fighting subsequent accountants for better part of 15 years to file on paper. Every year I need to sign affidavits etc.

At this point it is probably skewing more to an audit by not e-filing.

As far as turbo tax...I'm not paying the accountant to fill out the forms, I'm paying him to insure against audits. With businesses and rental real estate, short money in my opinion. 10+ years filing two businesses and rental properties and never an audit.

[Lakedog]

I use the fillable forms and mail them. Since I have a spreadsheet setup to know my tax situation throughout the year, it is relatively easy to complete the forms (with my spreadsheet info serving as a check). Maybe lots of folks have very complicated returns, but I just don't see where there is much time involved preparing a paper tax return. Electronic filing requires time to either answer the software questions or fill out the forms so not sure there is really much time savings there.

I usually pay only enough taxes throughout the year so that I owe a small amount. For the few times I have had a small refund, the direct deposit has shown up in my account within a couple of weeks so no real delay by sending paper returns (at least in my experience to this point).

[audreyh1]

Our tax return is huge. We don't answer a lot of questions - it's quick as most of the flow matches the prior year. A huge time saving is downloading transactions into the software. And presto, 50-100 pages of forms and worksheets are generated. We spend some time reviewing those. I can't imagine filling out all those forms by hand and doing the calculations with a calculator. For estimating taxes I use spreadsheets (can't do that by hand either, and need my Quicken reports too) and those have already grown complex, but they serve as a good check against the software.

[GTFan]

Quote:

Originally Posted by mystang52 When push comes to shove I'm sure I'll just suck it up and ante up. But I definitely won't pay to efile if I owe to Uncle Sam or my state.

http://www.early-retirement.org/foru...ile-84470.html

[ShokWaveRider]

Quote:

Originally Posted by Gumby I use software to prepare my taxes, but I always print them out and mail them in.

Me Too. Makes them work for their Money

[Dawg52]

Quote:

Originally Posted by Gumby I use software to prepare my taxes, but I always print them out and mail them in.

Same here. Tax software is just an easier and more accurate way to do taxes. Plus this year Fidelity gave me the software so it's a no brainer.

[pb4uski]

Quote:

Originally Posted by GrayHare Technically all you need do is pay the tax you owe, which means you need not file any forms at all.

I don't think so... they assess "failure to file" penalties.

Quote:

Here are eight important points about the two different penalties you may face if you file or pay late. If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty. The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and pay as much as you can, then explore other payment options. The IRS will work with you. The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax. If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes. If you request an extension of time to file by the tax deadline and you paid at least 90 percent of your actual tax liability by the original due date, you will not face a failure-to-pay penalty if the remaining balance is paid by the extended due date. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.