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Another Do Your Own Tax Question
Old 01-08-2017, 10:37 PM   #1
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Another Do Your Own Tax Question

I want to do my own taxes this year. For many years prior, we've had a professional do out taxes.

I have the paper return from last year, but do I blend in last year's electronic return with this year's return for it to be correct?

And how do I do this? Do I ask my tax guy to send me the electronic return?

My taxes should be fairly simple, I just want to make sure I do things right.
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Old 01-08-2017, 10:40 PM   #2
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The tax software programs have a step-by-step question and answer approach. Once you have done it you can then compare the result to last years to see what is different.
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Old 01-08-2017, 10:47 PM   #3
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When I switched (many years ago) from hiring someone to doing my own, I just used the previous years printed copy as a guide with no sort of blending.
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Old 01-08-2017, 11:36 PM   #4
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Yep, just follow the question and answer wizard in the tax software, and you will find it easy.
It's so easy, you will wonder why paid so much over the years to do it.
When done, compare to last years printed one to see the differences.
The next year, you will be able to import the previous year, so you don't have to type in your address, etc again.
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Old 01-09-2017, 04:22 AM   #5
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Right, there's not really all that much saved by using the previous year's tax return so I wouldn't sweat not have an electronic version. Your personal information is transferred, with an option to change things. I think it might also note which 1099s you entered last year, and which charities you gave to, as a reminder in case you forget to enter one of them, but that's almost more of annoyance to delete the one-off charities I might have donated to the previous year. 1099s can be imported so that's no big deal unless you have a lot of them and worry about forgetting one.
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Old 01-09-2017, 06:33 AM   #6
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Doing your own taxes is a way to understand how a tax return goes together (what effect different types of activity impact your taxes).

To do your own, you'll need some basic understanding of what went on last year. Go through last years taxes and worksheets page by page to see if there is anything that needs to carry over into 2016 such as:

Capital gains carry forward losses if your overall capital transactions showed a loss (1040 line 15).
Business use of home or SChedule C or E? Look for and reload depreciation schedules.
Did you have a Form 1116? Then look for carry forward schedule.
Rare, but did you have a very large charitable giving last year, it may have been limited/carryforward.
Don't forget to include any state or local taxes paid with the respective returns in calendar 2016 for 2015. Like 4th qtr state estimates that may have been paid Jan 2016 or included with the 2015 final state/local return paid in 2016.
Sell or buy property? There likely is property tax adjustments on the HUD form.
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Old 01-09-2017, 08:06 AM   #7
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There are a number of things that you may need to be careful of. As RE2Boys noted carrying info from last year... but in some cases this could be further back depending upon what all was included in you professionally prepared taxes.

For instance, if you did not have anything last year that would trigger a form 8686 (non-deductible IRA, but if you had one sometime in the past, you may not have the previous info in the tax package if the preparer only provided what was needed to file for that year. You may need to go to a prior year to get that info.

If you paid AMT last year and and got a state or local income tax refund, you may need to recalculate last years taxes to determine how much of the refund is taxable

There may be others.

The professional's electronic version may not help you unless it is compatible with the tax software you purchase. Some may have compatible file transfers, but I expect some will not.

I would hope that your professional would provide a printout of underlying data (such as the 8606) that might not have needed filed last year.
Doing taxes with good software is pretty easy in most cases. It also helps you understand how you can effect your taxes with what you do during the year. It also gives you a "what if" tool where you can see what happens by moving more to qualified dividends, or income producers. It can give you a good idea of the consequences before you make investment changes.
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Old 01-09-2017, 08:11 AM   #8
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TurboTax makes it very easy for the first year, and even easier in subsequent years. They use a well designed interview that automatically guides you through the sections you need, and skips over sections that aren't applicable to your situTion. You can also fill in forms directly, or modify after the interview, if you prefer. Others are happy with HRBlock and TaxAct, and they're cheaper, but I'll let others speak for those tax prep packages.
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Old 01-09-2017, 11:07 AM   #9
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Originally Posted by easysurfer View Post
When I switched (many years ago) from hiring someone to doing my own, I just used the previous years printed copy as a guide with no sort of blending.
First year, I had to manually input large carryover losses which I took from prior year's taxes completed by accountant. Did the same after moving from TT to TA. Thereafter, carryover losses were automatically included each year when importing prior year's taxes in TA. I refuse to pay TT's prices. Very happy with TA after 3 years.
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Old 01-09-2017, 11:29 AM   #10
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Really, there's no blending necessary. As others have said, you'll get walked through an interview process that I believe works well on at least the three I've used: TurboTax, H&R Block and TaxAct. You will have to check your old returns to determine if there are any figures to carry forward from previous years but the software interview should ask that unless you've initially told it to skip such sections: in H&R Block at least, one of the first interview topics is a list of items that may or may not pertain to you so you can pick and choose what gets covered. For the first time using the software, I'd err on the side of including more topics rather than fewer, only omitting those that you are certain don't pertain to your situation.

I would also say that once you choose the vendor, you're apt to stick with them because you'll be familiar with their process and the importing of previous year's data will go smoothly. I used TT for many years until I got a great deal on H&R Block (TaxCut) and tried it. Now I wouldn't go back.

Good luck!
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Old 01-09-2017, 02:36 PM   #11
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I've used TurboTax since 1998. The only thing that was a little bit tricky for me, was entering in MLP (master limited partnership's) K-1 info, but I managed to get through it.

Of course if you don't own any MLPs, this is a non-issue.
My brother would also do his taxes using my software, & he had some major problems entering his HSA (health savings account) info.

That was about 4 years ago, & since that time, he's gone to an accountant.
I opened, & contributed to an HSA for the 1st time last month.
Hopefully I'll be able to get through it.
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