Weaning Myself Off CPA

[newmillionaire]

Trying to leave my good CPA who has raised his price too high.

I have not filed my own taxes in 25 years because I used to own a business (corporate returns) and just used the same CPA to file personal returns.

I want to file myself this year via TurboTax. I do not itemize and I have Vanguard and a few smaller bank accounts. The good news is I can import Vanguard statement.

Question: will I need to refer to last years tax return much? What will I need from it?

My old returns are in PDF form and my guess the CPA used a professional tax filing program. From what I read is importing PDFs to .tax files will not work so I will need to enter any needed information from last year's returns manually.

 

[njhowie]

Good for you. You will save a lot of money, especially, by the sounds of it, because your returns are no longer very complicated.

You can download directly from Vanguard in to TurboTax. There is an Import menu option, you specify the financial institution (which Vanguard is one of them), provide your Vanguard credentials, and then it automatically pulls in the relevant tax forms.

I would print out a copy of last years tax forms, and use it as a guide to be sure you have not left anything out. Use TurboTax's guided input to walk you through everything. After that, you can review and compare.

First time it may take you a little longer to become comfortable with it. But going forward, it will become easier and faster for you.

 

[Spock]

There is very little that you NEED off of the prior year returns, but having copies of the prior returns is a very good sanity check comparison that you haven't missed something or that something is way out of wack that should be explained (to yourself or to the IRS).
It's also a handy place to find any refunds that need to be claimed as income this year.
Again, "handy", but not required.

 

[cathy63]

TurboTax can read many PDF files. Give it a try and see if you can save the typing of SSNs, names and addresses.

If you can't transfer it, then I think the only things you absolutely need from the previous return are any carryover amounts and last year's AGI, which is required to efile this year's return. It doesn't sound like you'd have carryovers, so probably just the AGI.

 

[newmillionaire]

Thank you everyone I will use last year's tax return as a guide and/or try to import.

Yes, I do have a carryforward on my 8995 for approximately $1,000. This was from a business I tried a few years back but put on hold. This was actually something that gave me pause...how would I handle this. Something tells me I will be fine. Hearing your responses gave me a boost of confidence!

 

[Exchme]

Good luck, here's a few things that we use from prior year's returns:
Non-deductible IRA basis on form 8606,
Carryover losses from Schedule D,
Adjusted foreign tax carryover from Schedule B,
Any state or federal refund as fed refunds last year are taxable in the state this year and vice-versa (and if you applied last year's refund to this year's tax payments)

This year we looked around for a new CPA and the prices we got were 40-60% higher than we are already paying, yikes. Every year I tell myself we'll do it ourselves, but our returns plus worksheets came to 63 pages last year (including state), and there's always a few places on the return where some knowledge is needed, so we'll stick with our CPA this year.

 

[COcheesehead]

Any carry forward losses and the cost basis for any IRAs with after tax contributions.

 

[RunningBum]

If you get nervous about it, have your accountant do your return one more time while doing it yourself in parallel. If they match up, you are fine for next year. If they don't, hopefully it's just one thing that you will learn and still be able to do it yourself next year. Ignore any $1 errors due to rounding.

 

[Lawrencewendall]

I've had good luck importing prior year's pdfs into TaxAct. For anyone interested, I called TaxAct and they gave me 30% off telephone purchase of the download version. TaxAct Premier (to handle my K-1) 5 free federal e-files and 1 state e-file for $104 before tax. I use the free federal e-file for family and friends and just print the state pdf for them to snail mail.

 

[brett]

We used a good CPA for tax. Prior to retirement my return had some complications. I was happy to pay and I believe that I saved more in taxes than I paid in professional fees. And I wrote those fees off against income.

Since retiring our circumstances have changed. I have been doing both of our returns for the past nine years or so. No issues.

I have never had an issue paying professional fees for good advice, good work.
I tend to look at the benefit side of the equation, net of cost.

 

[SecondAttempt]

There is very little that you NEED off of the prior year returns, but having copies of the prior returns is a very good sanity check comparison that you haven't missed something or that something is way out of wack that should be explained (to yourself or to the IRS).
It's also a handy place to find any refunds that need to be claimed as income this year.
Again, "handy", but not required.

I beg to differ, possibly...

If you have carryforwards you will need your prior returs for reference. Also, if you have anything you are depreciating, rental property, former business property, you may need previous returns to know where you are.

I have had my taxes done by a pro, CPA or EA for almost 30 years and have always received complete copies of my returns. I doubt an ethical CPA would deny this of you. But my EA charges just a little more than I'd pay for Turbo Tax these days now that my return is simple so avoiding headaches is worth it to me.

 

[Badger]

Since it sounds as if your tax returns will be simple you might want to contact AARP in your location (often they use libraries for helping folks with their taxes). There are a few members here that volunteer their services for this free offer. They can give you more information. I have been using AARP for well over a decade and have been pleased with their knowledge. It has always made tax time stress free. They use the available computer programs you may even use. Occasionally I have checked the results and they always equate.
Just something to consider.

 

[donheff]

I had a slightly more complex situation when I transitioned to TT so I paralleled the CPA for the first year. We had K1 partnership income with multi state earnings and taxes we had to file in CA and DC (other states were taken care of by DW's firm). It wasn't too difficult and has become easy now with standard deduction and no more self employment or multi-state income. One thing to note is that there are several levels of TT and they always push you higher that you need. That said, the entry level wasn't good for us but we used Premiere for a few years and have since gotten by on Deluxe. The lower levels may not guide you through oddball issues (maybe your 8995, I don't know) but I was able to search for and open forms I needed that were better covered in higher level versions.

 

[newmillionaire]

I wanted to just check back in to thank everyone for their replies! Hopefully this thread will also help other people like me in the future.

I am waiting for one 1099 to finish up. Then I will compare the finished tax return with prior year tax returns done by my CPA to see if they are similar or out in left field. If out in left field I will use the CPA again.

I will be back soon to read all of these responses again as I finish everything up. There are a lot of good ideas written. I will also update future readers of this thread on what I went through with tips I learned along the way.

 

[swakyaby]

After 20 years of using a CPA for tax preparation, I retired and had a relative simple MFJ federal and state tax forms to prepare. But my CPA’s fee did not seem to reflect the simplicity of my tax return, and had gradually increased his fee each year until it was $795 in 2017. At that point, I looked at Turbotax. I was very unfamiliar with my way around tax prep software, so I elected to pay extra for live help where an online CPA looks over your finished federal and state tax return and answers tax-related questions before it is turned in. There are also phone help by customer reps for Turbotax who helped me navigate around the site. They could actually see my cursor and typing after I gave the phone rep access, so that was helpful.

It was actually very helpful and kinda fun to do my own taxes using Turbotax, and I no longer pay extra for live assistance after that first year.

 

[Souschef]

I used to do the AARP Tax Aide service as a volunteer. My BIL still does it, and they have a ceiling of $50K AGI to help people. The thought behind it that the service was to help low income people, who could not afford to pay to have their taxes prepared.

 

[cathy63]

I used to do the AARP Tax Aide service as a volunteer. My BIL still does it, and they have a ceiling of $50K AGI to help people. The thought behind it that the service was to help low income people, who could not afford to pay to have their taxes prepared.

Hmm. I wonder if your BIL might volunteer with VITA rather than TaxAide? That program has a limit of $60K this year.

AARP TaxAide is not allowed to limit who we help based on income because it's partially funded by a TCE grant and that's one of the conditions the IRS imposes on recipients. However, the IRS also decrees what's in and out of scope for the various tax prep programs they fund, and they have said that Additional Medicare Tax, Net Investment Income Tax, and QBI above the threshold are out of scope; so as a result there is a de facto limit somewhere between $170K and $250K. The exact maximum depends on the taxpayer's filing status and type of income.

 

[Koolau]

If you get nervous about it, have your accountant do your return one more time while doing it yourself in parallel. If they match up, you are fine for next year. If they don't, hopefully it's just one thing that you will learn and still be able to do it yourself next year. Ignore any $1 errors due to rounding.

What a great idea!

 

[jazz4cash]

According to google there is a workaround for converting from pdf to .tax. Most of the results specify TT 2022.

Here is one of many results. The right solution may depend on which version of TT you using (online or download/disc).

https://ttlc.intuit.com/turbotax-su...f-2021-turbotax-windows-cd/L3EOuaOAL_US_en_US

 

[newmillionaire]

I promised that I would update this thread for future users with the same question. Turbotax was a piece of cake. I did not need to scan in my old returns, etc. Just used the old returns as a check on new return I am preparing for this year. Everything was super simple except for one problem that I spent 5 hours on. I was trying to get QBI carryover loss onto form 8995 line 3 like my CPA and could not get it to work. I asked all around the Internet and although a few had ideas no one knew the answer. I even paid another $15 to get to self-employed version from premier which was not necessary but I was growing desperate to finish and stop wasting time on one small problem.

It turns out that I did not click the continue button to get to next question. Horrible interface if you are new to Turbotax. My enter box should have been on one page with the others. However, if you are used to pressing the continue button (savy Turbotax users) then it's easy. I will know to press continue if I ever get another unrelated problem in the future. Took me 30 seconds to fix my problem from there. Helpful Hint: You need to pay for Turbotax before you can see the actual forms. I needed to see the forms to compare to my CPA forms from last year. No problem...was nice to compare. Looks sort of similar.

I am still worried if Turbotax will cause problems I have not yet thought of. I am not 100% finished yet because I like to solve the big problems first and then let my subconscious think a few days. Will submit perhaps this weekend.

 

[COcheesehead]

I learned a while back that TT has some vagueness. One was a checkbox that asked something like is this stock sale eligible for special treatment. I knew it was from my own research, but TT never explained it. So if you checked the box, you got an entire new set of forms to fill out that saved me thousands. If you didn’t, you just overpaid your taxes.

 

[Koolau]

I learned a while back that TT has some vagueness. One was a checkbox that asked something like is this stock sale eligible for special treatment. I knew it was from my own research, but TT never explained it. So if you checked the box, you got an entire new set of forms to fill out that saved me thousands. If you didn’t, you just overpaid your taxes.

That would seem inexcusable on the part of TT. One reason I use a CPA is because s/he would KNOW if eligible for special treatment. I certainly would not unless it said so right on the 1099 (or whatever is sent upon sale.) IF I used TT, it would be because it made certain I DIDN'T have to be a tax expert already - familiar with the vagaries and loop-holes and gotchas of the tax system morass.

 

[COcheesehead]

That would seem inexcusable on the part of TT. One reason I use a CPA is because s/he would KNOW if eligible for special treatment. I certainly would not unless it said so right on the 1099 (or whatever is sent upon sale.) IF I used TT, it would be because it made certain I DIDN'T have to be a tax expert already - familiar with the vagaries and loop-holes and gotchas of the tax system morass.

Nah, there’s a good chance a CPA would have missed it too. It was a limited time deduction related to capital gains on small company stock dependent upon what congress approved on an annual basis. I tracked it because it was important to me. It wouldn’t be for 98% of America.

 

[Sunset]

I promised that I would update this thread for future users with the same question. Turbotax was a piece of cake. ......

Helpful Hint: You need to pay for Turbotax before you can see the actual forms. I needed to see the forms to compare to my CPA forms from last year. No problem...was nice to compare. Looks sort of similar.

....

Thanks for the update.

I always use the download version, as that way I can see the tax return at any time.
Plus having it on my computer allows me to play "what if" anytime.

 

[newmillionaire]

Good to know. I will use the downloaded version next year based on this information. Thank you!