Tax program or person

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kgtest

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So I am not overwhelmed by doing anything myself. I have always used TurboTax with great success but my taxes I feel will be complex this year...but by no means that complex.

A few things happened last year,
1. I got married
2. I sold my house at a profit
3. I moved out of state
4. Both me and my wife got a new job in the new state with minimal income changes
5. Both the wife and I opened tIRAs
6. I swapped all funds in my 401k out during a rebalance and sold a fund in my tIRA
7. I had some fairly high job search expenses (I am not counting the relocation as my company paid for that), I am talking the trip I took for the interview and such before I got the job on this island. Technically my wife had some high job hunting expenses as well.


Now after laying out my situation, do you feel its time to hire an accountant due to the increased amount of liability in my tax changes, or should I tackle this myself with TurboTax?
 
I use a tax preparer but he's really affordable.

He charged me $175 last year for state/federal and I have a Schedule C business and multiple rental properties. That also includes the electronic filing fee. Seems like a no brainer to me.
 
I don't see anything that a good tax program like Turbo Tax couldn't handle by going through the Q&A systematically.
 
Maybe not an "either / or"...

After you get done in TurboTax or Block, and have built-up those synapses, print it out and take it to an accountant....many will scan a completed tax return and look for problems for much less than they would charge to actually do the return from scratch.
 
travelover said:
I don't see anything that a good tax program like Turbo Tax couldn't handle by going through the Q&A systematically.
Click to expand...
+1

If you do run into some questions there are a number of sources to help guide you, including the fine minds on this forum. :) You might at least give the TurboTax route a try to see if you are comfortable with it before paying someone to prepare your return. But don't wait until April to start...
 
+2 for TurboTax.

And the 401k and TIRA changes aren't taxable events unless you took money out, but TurboTax can handle that easily.
 
sengsational said:
Maybe not an "either / or"...

After you get done in TurboTax or Block, and have built-up those synapses, print it out and take it to an accountant....many will scan a completed tax return and look for problems for much less than they would charge to actually do the return from scratch.
Click to expand...

I like this approach.
 
Agree that it seems you can handle it with TT. Why pay more except for some small personal time savings? You still have to get all the info together for the preparer. Personally I like doing my own as it gives me opportunity to see the exact effects of everything. It increases my understanding and to know exactly why I have to pay so much :mad:


 
I'd try turbo tax first, and if you can't figure something out or don't feel comfortable with it, go to a accountant. I've done turbotax for years. I sold half of my company stock 2 years ago, and the other half last year. I was running into problems calculating basis, so I filed for an extension and went to an accountant. He knew something I didn't and I got about $800 back. I'll probably go the same route this year.
 
kgtest said:
Now after laying out my situation, do you feel its time to hire an accountant due to the increased amount of liability in my tax changes, or should I tackle this myself with TurboTax?
Click to expand...


There's even a question? Accountant!
 
kgtest said:
So I am not overwhelmed by doing anything myself. I have always used TurboTax with great success but my taxes I feel will be complex this year...but by no means that complex.

A few things happened last year,
1. I got married
2. I sold my house at a profit
3. I moved out of state
4. Both me and my wife got a new job in the new state with minimal income changes
5. Both the wife and I opened tIRAs
6. I swapped all funds in my 401k out during a rebalance and sold a fund in my tIRA
7. I had some fairly high job search expenses (I am not counting the relocation as my company paid for that), I am talking the trip I took for the interview and such before I got the job on this island. Technically my wife had some high job hunting expenses as well.


Now after laying out my situation, do you feel its time to hire an accountant due to the increased amount of liability in my tax changes, or should I tackle this myself with TurboTax?
Click to expand...


DD did exactly the above a few years ago except she kept her job, plus they bought a new place, and they paid for their own relocation expenses, and there was some funky state credit they got as first time homebuyers in the state they were leaving (they bought in old state in the early spring of the previous year and owned it long enough to get that state's credit). TurboTax handled it all--I know because I ran the program for her and her new DH. TurboTax also handled the partial year state returns. I did run the program updates every day and they waited to file until 4/15 to be sure there weren't any changes. So I would at least try it, and then you will have all the data to hand over to an accountant if you feel you have missed anything.
 
I just wonder why everybody thinks that an accountant is the way to go...

Heck, I am not putting down accountants as I am one.... but whenever I had to have an accountant do my tax returns (company required as I was expat), they screwed it up...


Now, if you get a good accountant that takes the time to get to know your tax situation, then maybe it is worth it... but IMO that is a higher cost than $175 or so... heck, that is maybe two hours... and with some it is one....
 
Most accountants are using a tax program, that's why most programs have professional/preparers edition.

I've been using TaxAct for many years.
 
Only area that I think may be a problem will be the two partial year state returns, assuming your old state has an income tax. It's not hard to understand but sometimes can be a challenge to get the software correct. Segregate your income into what was earned in each state. And laws vary so what is an adjustment to income in one state may not be in another. Generally moving expenses and job hunting expenses would be under the new state (they benefitted from you moving to them).

Me, I'd try to do it with TurboTax, but I've seen poor implementations of some of their state software packages in the past. (PA in particular)
 
obgyn65 said:
In my case I have no time to do my taxes. And I am afraid of the IRS.
Click to expand...

Time is the only reason I see for not doing it yourself. Well, that and distaste (which is why I have a housekeeper :)). Accountant I used for years forgot one year to carry over STL's. I had to call and remind her and she had to redo them. Every year thereafter I made sure to mention that I had carryovers. Accountants are not infallible.
 
Give Accountants a break, remember that they may be knee deep in business returns with the same deadline. (My DD is one and she must deal with auditors, business returns and partner returns. I wouldn't add a crumb to her plate at this time of year.)

Here is what I recommend: use a program such as TurboTax and file your returns. Then, after the pressure is off take it to an Accountant for review. If that person picks up something you can always file an amended return.
 
Well I took a stab at my taxes, and then I had my ole man review them as well.

My question is this, I was going to report business income to push me into the 7.60% income tax range for HI. Instead of taking that loss, I feel my audit risk would likely be less if I just included some more of my charitable contributions.

Do you guys feel that donating $4,000 worth of items after selling a 2000sq ft home and relocating to the pacific would be a questionable donation amount to the IRS?

I included the basics that I donated to Good Will (with proof) but I feel I can include the littler things (100s of books, cds, smaller furniture items and household goods that easily total about 1500-2000).

I am curious if this is a better plan than reporting some piddly consulting income.
 
kgtest said:
Well I took a stab at my taxes, and then I had my ole man review them as well.

My question is this, I was going to report business income to push me into the 7.60% income tax range for HI. Instead of taking that loss, I feel my audit risk would likely be less if I just included some more of my charitable contributions.

Do you guys feel that donating $4,000 worth of items after selling a 2000sq ft home and relocating to the pacific would be a questionable donation amount to the IRS?

I included the basics that I donated to Good Will (with proof) but I feel I can include the littler things (100s of books, cds, smaller furniture items and household goods that easily total about 1500-2000).

I am curious if this is a better plan than reporting some piddly consulting income.
Click to expand...

I would never shy away from taking legitimate deductions. You have the documentation, so take it and be able to prove it if audited. i agree an audit is not desired, but you should do everything that is legal under the law. Why pay more than you are legally obligated to?

Can your consulting income just be included as "other income"? Avoid the whole Sch C business form. Can you also take home office deduction with the consulting business as another legal deduction?
 
As a tax preparer, I can say that TurboTax et. al. is great for 'doing taxes' but a pro can help with tax planning. I've also looked over many TT returns and while the input is correct, the output could've been better i.e. 1099B's (stock sales) where the basis is not given or incomplete/incorrect resulting in higher taxes. Surprisingly many people don't understand the forms and just input the numbers given. "GIGO"
 
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Watch the home business deductions if you decide to do it. Yes, you can depreciate the part of the house you use for business as well as expenses (roof, driveway...) as part of the upkeep of the house. But beware when it comes time to sell the house as there could be capital gains tax to pay on the portion of the house you were depreciating. We learned that the hard way after 16 years of home expense depreciation and then selling at a profit.

Disclaimer: I am NOT a tax accountant nor adviser. Just a guy that learned through personal experiences.
 
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