Tax Question

[mountainsoft]

I know you said you didn't want to use online tax services, but I've been using them for years and it couldn't be easier. They ask you step-by-step questions and ask you to enter a few numbers from your forms. You don't need to fill out each line of your tax return, the service does that for you. Once you use a service, you can easily prefill much of next years tax return automatically (name, address, SS numbers, bank account, etc.). If you're due a refund, you can have it deposited directly to your bank account.

I use EZTaxReturn.com and it costs about $25-30 each year.

I've done my mom's taxes online the last couple years too. EZTaxReturn does not support the form for her railroad retirement, so I used TaxAct.com for her tax returns. A bit different interface, but just as easy to use (and her return was free).

Depending on your age and income level, you may be able to file your taxes for free:

https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free

 

[pacergal]

We have used H&R for over 10 years and have had the same tax preparer.
I run the Tax Caster by Turbo tax preview a couple times a year to make sure I am on track for estimated taxes and considering starting to do our own again.

 

[Offgrid Organic Farmer]

My wife and I were both certified to do taxes, through the IRS' VITA program, for 10 years.

We file Schedule Cs, Es and Fs every year.

When we bought our most recent mixed-use commercial/residential property, we decided to form an LLC and to buy it under the LLC. And we decided to hire a CPA to do all our taxes from now on.

 

[wproie]

I told her that filling out the questions from the CPA was basically the same as entering the data in the tax program.

-ERD50

Bingo. That's what I found. My business partner called the form from our CPA "Paper Turbo Tax".

 

[swakyaby]

Curious what did they charge for the live assistance?

The Live Assistance option was $100 when I purchased Turbox Premier online. At my request, Fidelity reimbursed me for TurboTax Premier online.

Live Assistance allows you to speak with a CPA via video chat as often as you like when you have questions during your tax prep. I found that initially, you would be connected to a TurboTax rep who would help you with basic questions filling out the online forms. But when you actually had tax questions, they would have a CPA contact you. The CPA could see your form online and assist with the correct way to answer the questions. Finally, after the entire form is complete, the CPA will review your entire Federal and State Tax returns for accuracy prior to your filing it.

I needed that kind of hand-holding.

 

[Dtail]

The Live Assistance option was $100 when I purchased Turbox Premier online. At my request, Fidelity reimbursed me for TurboTax Premier online.

Live Assistance allows you to speak with a CPA via video chat as often as you like when you have questions during your tax prep. I found that initially, you would be connected to a TurboTax rep who would help you with basic questions filling out the online forms. But when you actually had tax questions, they would have a CPA contact you. The CPA could see your form online and assist with the correct way to answer the questions. Finally, after the entire form is complete, the CPA will review your entire Federal and State Tax returns for accuracy prior to your filing it.

I needed that kind of hand-holding.

Good to know.
Thanks.

 

[Retireby45ish]

I was also wondering if people thought the benefit of a tax preparer or CPA were worth it. I go back and forth on this which is why I was looking at these old threads.

I wish people would share what they pay so that we could compare and see what “a lot” vs “cheap” was.

I paid my preparer $800 last year. My taxes are probably middle of the road in complexity. W2, a few investment accounts and two k-1s with one being “a beast” according to a CPA I started using 3 years ago.
With the addition of that k1 I figured it might be worth going to a pro.

Then again the software would ask you what was in each box so how much of a beast could it be?? I was torn But I still went to someone since I figured that If they caught just one error or tweak or deduction I didn’t know about it would be worth the fee.
This turned out to be a good choice last year as my current CPA missed my previous guys mistake the prior year which cost me $1400. I had to refile and got that back. But the question for me is still “is it worth it, since I know my tax situation best”? But I have to really spell things out for the CPAs. Like “I was on a work trip for 3 weeks, can I expense some meals that weren’t reimbursed as part of my partnership”? Unfortunately they should ask me that instead of me thinking of it and making a note to tell them. Sign.

Before the K1s I did them on my own using turbo tax for years. Cost like $120 in 2016 I think for online filing.

Still not sure what to do...

 

[pb4uski]

$800 seems like a lot for what you describe. What you might try is to take last year's (2018 tax year) "raw materials" (W-2, K-1's etc.) and buy a copy of 2018 TT (should be cheap) and then prepare the return without looking at what your preparer did. Once you are done, compare the result to your preparer prepared return. If the result in the same then you could consider ditching the preparer or repeat the process for 2019 and then ditch the preparer for 2020.

 

[target2019]

I was also wondering if people thought the benefit of a tax preparer or CPA were worth it. I go back and forth on this which is why I was looking at these old threads.

I wish people would share what they pay so that we could compare and see what “a lot” vs “cheap” was.

$200 minimum this year for new clients. Your situation might cost more, though.

 

[donheff]

I was also wondering if people thought the benefit of a tax preparer or CPA were worth it. I go back and forth on this which is why I was looking at these old threads.

I wish people would share what they pay so that we could compare and see what “a lot” vs “cheap” was.

I paid my preparer $800 last year. My taxes are probably middle of the road in complexity. W2, a few investment accounts and two k-1s with one being “a beast” according to a CPA I started using 3 years ago.
With the addition of that k1 I figured it might be worth going to a pro.

$800 seems like a lot for what you describe. What you might try is to take last year's (2018 tax year) "raw materials" (W-2, K-1's etc.) and buy a copy of 2018 TT (should be cheap) and then prepare the return without looking at what your preparer did. Once you are done, compare the result to your preparer prepared return. If the result in the same then you could consider ditching the preparer or repeat the process for 2019 and then ditch the preparer for 2020.

Try what pb4uski says. For many years while DW was working we used a CPA (paid about $1500/year). I'm not sure what qualifies as a bear of a K1 but her's probably qualified. About 10 years ago she quasi retired with continuing K-1 income in the mid thirties that involves self employment income, multistate filing, and now qualified business income deductions. I did what pb4uski suggested and after a few initial mishaps I got the hang of it and continued with TT ever since. Every year it is a PITA with the K1 arriving in mid March and the state data arriving at the end of March or even the beginning of April. I considered trying TTs professional tax preperation services this year but then realized I would still have to gather all the documents and would probably end up with TT wanting to file an extension when the K1 and state info didn't materialize until two weeks from filing. Turns out that DW became a retired partner on Jan 1 this year so in the future her payments will be 1099R income. I decided to bite the bullet and struggle through one more year of her bear of a K1. After that things should be easy.

One suggestion is to use two sets of tax software. I like TT for the actual filing but I have run TaxUSA along side as a comparison to make sure I am catching everything. I have occasionally noticed differences that alert me to something I screwed up on one side or the other.

 

[frank]

I get my paperwork for taxes, income, deductions, expenses etc. and usually go to one of the online tax software with free file. I fill out the software with a fake ssn and birthday. fill it out as it leads you throught the software and when it is completed I let it sit on the site and wait to see what my tax preparer comes back with. last year I did it this way and when my tax preparer did my taxes and came back with a way different number on what was owed, I compared and here he forgot to include some interest income. I caught it and my preparer changed his numbers. I wonder what the consequence would have been if I had not double checked his numbers?

 

[target2019]

I get my paperwork for taxes, income, deductions, expenses etc. and usually go to one of the online tax software with free file. I fill out the software with a fake ssn and birthday. fill it out as it leads you throught the software and when it is completed I let it sit on the site and wait to see what my tax preparer comes back with. last year I did it this way and when my tax preparer did my taxes and came back with a way different number on what was owed, I compared and here he forgot to include some interest income. I caught it and my preparer changed his numbers. I wonder what the consequence would have been if I had not double checked his numbers?

The IRS would find a 1099-INT not entered, and send you a letter for additional tax owed.

 

[Philliefan33]

+1 on following along for a couple of years to make sure you match the CPA, then doing it yourself.

I always did our taxes using TurboTax, and it was fairly complicated with Schedules A,B,D,and E plus and out-of -state K1 to deal with. But the first year DH worked as a a contractor (adding Schedule C to complete the run) I got frustrated arguing with DH about allowable expenses. So we went to a paid preparer.

The paid preparer charged us $600. I followed along with TT. The first year I had some significant mistakes. The second year of following along I got better, and by the third year I nailed it. We didn’t go back for the fourth year; we are back to doing it ourselves with TT.

 

[Retired Expat]

I agree with all that H&R Block isn’t worth it as their people are not trained.

If your return is relatively simple you can use Turbotax online for free. I have done my own taxes many time and used professionals as well. Returns are too complicated now to go DIY anymore.

Will sometimes check my pros return against a DIY to see if I could have done it and usually find that the pros saved me in taxes at least their fees or that they picked up on things that I missed which would be ugly if audited. Plus it saves a lot of time!

 

[frank]

the nice thing about some of the software online is that they save it from year to year whether you file with them or not. ttfreedom edition does not. I like this feature so that you can return to the site and review what you did the year before.

 

[Dtail]

I agree with all that H&R Block isn’t worth it as their people are not trained.

If your return is relatively simple you can use Turbotax online for free. I have done my own taxes many time and used professionals as well. Returns are too complicated now to go DIY anymore.

Will sometimes check my pros return against a DIY to see if I could have done it and usually find that the pros saved me in taxes at least their fees or that they picked up on things that I missed which would be ugly if audited. Plus it saves a lot of time!

We have used H&R Block Advisors who do have a higher level of knowledge than the standard H&R folks.
This year though, I will use my free TT and see how I match up.

 

[target2019]

AFAIK all h&r preparers are trained. I went through their course, and it was thorough.
The difficulty you may have with the result is that the person across the desk may have little or no experience. There is a reviewer, but they may also be a newb, probably not a CPA.
When you dine at McDonalds, don't expect a chef to come out and ask how you are enjoying the beef he prepared.

 

[athena53]

I've been doing my own for years. When I married my first husband in 1984 I used the CPA he'd used but quickly realized that the bulk of the brainwork was knowing what records to keep and organizing them. I even had to research the basis of stocks we'd sold since this was way before the brokerages made that info easily available. All he did was enter it all into a computer program. The last straw was when he called on April 14 and wanted a couple of large checks- one for underpayment on the State taxes and another for the Q1 installment. No prior warning that, as a newly-married couple with roughly equal incomes, one income was essentially taxed entirely at the highest marginal rate by the state.

Since then I've used the software. The only time I resorted to a CPA was a year when I tried to do a second state return manually instead of paying to download it- I worked in one state and lived in another and tried to do the simplest state in Excel. Too many "mini-worksheets" and "gotchas" and I missed a few. My finances have a lot of moving parts- 2 pensions, SS, various types of investment income, home ownership- but they all fit into the boxes in the tax programs. I can learn about strategies such as donor-advised funds and QCDs though my own research.

 

[Winemaker]

I used to go to a professional preparer, after doing everything on Turbo tax,, which I used s a planner. When she would get the same amount as me after 5 years, I did Turbo tax exclusively.

 

[misanman]

For the last several years I've imported the k-1s electronically into turbo tax. It automatically populates the requisite tax forms based on the imported data.