Do you guys use an accountant?

[5Miler]

I was taught how to do taxes in my senior year of high school in our American Civics class which I'm confident no longer exists. Since then, I have always done my own taxes which included the annual run to the post office or library to find all the appropriate tax forms and schedules if they weren't mailed to me by the IRS based on the return from the previous year.

Although I had relocated for work across state lines several times, when I transferred to Georgia in 1991 it was the first and only time I ever used an accountant. I was just too busy with my new position with travel and didn't have the inclination to deal with multiple state returns. I found an accountant working from home in my neighborhood and got them done for a small fee.

I continue to do my own and the returns for DGF which includes Schedule C for her part time travel business. That part is a pain comparted to mine but not really difficult.

 

[Yipper]

I don't use an accountant or tax pro for any of my personal financial/tax matters. I went to a tax pro once, many years ago, when I was unsure of how to handle a particular tax situation. He charged me several hundred bucks but did a good job, so I went to him again the following year. I discovered a major, glaring error in his work that year (which he sheepishly then corrected), yet he still charged me the same amount! Ever since then, I have done it all myself and made it a priority in my life to be self-sufficient when it comes to my personal taxes.

Same experience - I make it a priority to be self-sufficient after catching a trusted accounted make a dumb error several years ago and then argue with me about it for a while until he acknowledged it. Buh bye.

 

[Yipper]

Since we're on the subject, any good links for Turbotax discounts? I know Fidelity had one in the past

Fidelity is still offering the discount.
https://www.fidelity.com/accounts-trade/turbotax-discount

 

[RE2Boys]

I remember, around 1980, being a young (30) frugal single engineer. When I did the federal income tax return, It occured to me that if I got any kind of increase in income (12% CD for example) I would be in the 49% marginal tax bracket.

Really motivated me to become much more a student of the federal income tax system and take advantage of opportunities offered to keep my tax bill low. Became known in my office as the knowledgeable person regarding income taxes for the next 20 years. Once I retired at age 50, found seasonal jobs as a tax prepared (fill in the dog days of winter).

So no, I don't use an accountant. This year, I'm a volunteer with both AARP Tax-Aide and the local VITA program.

 

[RetMD21]

Really motivated me to become much more a student of the federal income tax system and take advantage of opportunities offered to keep my tax bill low. Became known in my office as the knowledgeable person regarding income taxes for the next 20 years.

I think having more insight may be the biggest value in DIY. In my family the bar is very low for being a tax expert so I acquired a "job."

 

[Unpaintedhuffhines]

Used an accountant for the last 10 years when I was working. Ours were moderately complicated plus I found that I was super stressed about getting them done right and on time. Normally about 90% was very straightforward, but that last 10% was more complicated and highly stressful. Now I just collect all my documents, write a short email about anything I need to clarify, and it gets done.

Now that I'm retired, I think this year I'll still use my CPA, but I will try using TT myself to see if I get the same answer. If I do (and it's not that complicated), then I may ditch the CPA next year.

 

[Sunset]

I go to H&R Block and pay at least that much but my taxes are a little more complicated due to self employment. I don't think $300 is too unreasonable but $500 for a basic return is too much.

But to use a service, you have to track all your expenses and income and bring them the numbers.

Seems to me you have done 90% of the work already.

You could get the software and try it this year, using last year's return to follow along, so you don't miss something, ex: office use in the home.

Seems like most of your net income is wiped out from the standard deduction, based on earlier postings.

 

[pb4uski]

But to use a service, you have to track all your expenses and income and bring them the numbers.

Seems to me you have done 90% of the work already.

You could get the software and try it this year, using last year's return to follow along, so you don't miss something, ex: office use in the home.

Seems like most of your net income is wiped out from the standard deduction, based on earlier postings.

It takes me less than an hour to input the information once I have it all. And with the recent links with brokerage houses it is even easier.

Make me wonder, if I used an accountant to prepare my return would I have to provide them with a printed 1099-INT and 1099-B and they input all that or would I need to provide them with my log in credentials to my brokerage accounts? No way.

 

[freedomatlast]

I have fairly complicated returns every year which include investment income, rental income and depreciation, 1099 self employment income and all related forms, W-2 income, HSA contributions, and a bunch of other miscellaneous stuff. A lot of the work is already done by the end of the year by keeping well organized, meticulous records. With that said, I am totally old school. No accountant, and no tax software. By filling in the forms by hand, it becomes very easy for me to see what has an effect on what, and on what form what amounts are impacted. I tried an accountant one year in 1984 when there were a lot of changes going on and I later found a mistake made by the accountant and amended my return. Never went to another one. I will say all that number crunching does tend to keep a person sharp and I do check and double check everything before sending it in.

 

[eboats]

I use TurboTax. I also read this large book ( "Taxes for Dummies 2022" ) and felt it covered everything I needed to know. Definitely wanted to understand what's happening behind the scenes of what TurboTax is doing.

https://www.amazon.com/Taxes-Dummie...cphy=9033339&hvtargid=pla-1460242241704&psc=1

 

[RunningBum]

No accountant, just TurboTax. My situation isn't very complex. I also like doing it myself so I can learn from it. No one is more motivated than me to manage my investments and taxes.

 

[SecondCor521]

The actual tax preparation is pretty straightforward. Collecting the tax forms, putting numbers in boxes, doing some basic math, printing, envelopes, mailing. It could be done by a competent and bright junior high school kid.

Being aware of what applies and what doesn't and what's new and what's changed and what the limits are for various things is moderately more complicated and takes effort to keep on top of. Most people here probably read enough financial stuff that they are likely to hear about these things anyway. But sometimes the popular financial press doesn't cover things accurately or completely, or you may not read that article.

Knowing what forms you should have received, and what the numbers mean, and how it all fits together is another skill set. If one blindly copies numbers from a tax form into any tax software and just trusts the bottom line result, errors and mistakes can very easily creep in and not get caught. Most people here probably know how the tax law applies to their situation.

Tax planning for the current year and over the rest of one's life is another skillset which I think is very valuable and most people don't have it. I know quite a few people here have this skill, but this one builds on all of the above skills, so it's hard to be good at all of them.

...

Over the years I've done taxes a bunch of different ways:

1. By hand on paper with pencil, pen, and calculator. A pain and hassle, because it's easy to miss limitations on things, or make math errors, or write in something wrong. I haven't done them this way in a long while.

2. Online with Free Fillable Forms. Nice, because it e-files for you and does basic math, and has pretty much all the forms. Free.

3. Turbotax. I haven't used TT in about 15 years, but when I used it I didn't like that it asked about everything even though everything didn't apply to me. And sometimes the questions were not precise enough or were unclear. I also didn't like the opaqueness of not seeing the return and where numbers came from. From what I hear, TT has improved a lot since I used it last.

4. A fancy CPA. I've used two different CPAs. They're expensive. They make assumptions. They make errors. But they know the tax law and can frequently advise you on basic tax-saving maneuvers that save more than they cost initially.

5. Myself, via AARP Tax Aide. I do my own now. I get trained every year, learn all the new stuff, refresh my skills on old stuff, and get to e-file mine and my family's returns for free. I get a free quality review if I want it. This is what I do currently and it's the best of all worlds for me personally.

 

[DawgMan]

Well, after reading all the replies, (I am perhaps embarrassed to say?) I have spent around $3K/yr with an accountant to do my business and personal returns during my working years. That said, I had a strong income and had various real estate and business investments in addition to a DB plan and some aggressive (legal) tax easement "investments". I have been with this same CPA for over 25 years and I do believe he added value to my situation. Newly retired in 2022 and having sold many of my investments, my financial life is much simpler. I still have a few K1s, otherwise just investment income. Hope is I can grab the wheel and save $3K in 2023! Sounds like I have a chance to DIY

 

[Sue J]

I use the IRS free file fillable forms. I was a tax auditor (state payroll audits) in the 1990's. I'm one of those weird people that actually enjoys reading tax stuff. After I complete my return for the previous year, I print out copies of the 1040 form and various schedules that I need. I pencil in my estimates during the year so I know my situation at all times. Yeah, I probably need to get a different hobby!

Before computers I got the forms and instructions from the post office or the library and did it all on paper and mailed it in. I learned so much reading those instructions!

Now, I keep a spreadsheet all year with my guesstimate. I update as the year progresses. Then I use FreeTaxUSA and fill it out as my tax forms get posted.

I enjoy seeing how close I come to the software result. If it doesn't match I want to know why and make the correction. I ENJOY this!

I'm a former staff accountant and I did a few years with H&R Block so this gives me some numbers to chew on for fun.

I've never paid to file taxes. That seems like an extra T-A-X to me.

 

[Act2]

For myself, I use TurboTax and am happy with it. I think I fall into the moderately complex level. I find taxes very interesting.

For my Dad’s Trust and Estate, and for my parents’ returns when they were alive, I use/used the same accountant they used for decades. I feel that when I’m in a fiduciary position it helps to have a third party look over what I do to ensure I’m doing it exactly right. And the accountant knows their finances well, which helps.

 

[W2R]

No accountant, just TurboTax. My situation isn't very complex. I also like doing it myself so I can learn from it. No one is more motivated than me to manage my investments and taxes.

+1

 

[old medic]

I did ours for many years... simple stuff... Until we got screwed over by the DW former employer. She worked PT for several years under the table for cash running his B&B, and when she left to go to her dream job, he filed that he had paid her about 4X what he actually had.... IRS came after us for $6500 in tax and fines... Yes I nearly went to jail.
We used a friends Mom who worked under a CPA and with some refiling, an itemized deduction approach, and her working out a deal with the IRS we got them settled over the next few years. She did our Tax's until she retired, then we went to our Credit Union. But they have stopped that service, so I'm thinking about going with TT. basic simple return.

 

[Badger]

I have never used an accountant. For more than 30 frustrating years I successfully did my tax forms with pencil and paper. Then I tried one of the software programs a couple of times but for the past 12 years AARP volunteers have been preparing them. It has been about 20 years since I have been taking standard deduction so it isn't complicated but as I get older I feel safer with an expert helping. The AARP volunteers are great and I appreciate all that they do for us at tax time. So for all the AARP volunteers a BIG Thank you.

Cheers!

 

[socca]

I'm directly or indirectly responsible for nine entities for the 2022 tax year - DIY for all of these ain't gonna happen. I have plenty on my plate with two 1040s and a 1065 to prepare myself. I'm happy to farm out a bunch of 1041s and a 1120-S to an accounting firm.

 

[RetMD21]

A local firm does personal 1040s more of less for free for clients who use them for the complex stuff.

 

[Sunset]

I did ours for many years... simple stuff... Until we got screwed over by the DW former employer. She worked PT for several years under the table for cash running his B&B, and when she left to go to her dream job, he filed that he had paid her about 4X what he actually had.... IRS came after us for $6500 in tax and fines... Yes I nearly went to jail.
We used a friends Mom who worked under a CPA and with some refiling, an itemized deduction approach, and her working out a deal with the IRS we got them settled over the next few years. She did our Tax's until she retired, then we went to our Credit Union. But they have stopped that service, so I'm thinking about going with TT. basic simple return.

Hopefully you reported him to the IRS for failing to pay medicare taxes, and other employment taxes like unemployment to the State for all those years as well.

 

[ncbill]

Well, after reading all the replies, (I am perhaps embarrassed to say?) I have spent around $3K/yr with an accountant to do my business and personal returns during my working years. That said, I had a strong income and had various real estate and business investments in addition to a DB plan and some aggressive (legal) tax easement "investments". I have been with this same CPA for over 25 years and I do believe he added value to my situation. Newly retired in 2022 and having sold many of my investments, my financial life is much simpler. I still have a few K1s, otherwise just investment income. Hope is I can grab the wheel and save $3K in 2023! Sounds like I have a chance to DIY

I have to use a CPA as well since I foolishly "got sold" some stinkers around a decade ago.

Some are in "zombie" status...not paying anything but I can't take the loss until the partnership formally dissolves.

Fortunately the most complex investments have a limited life but currently my returns run well over 100 pages.

 

[Echard]

IN THE MARKET FOR A NEW ACCOUNTANT IN TEXAS/AUSTIN. IF YOU KNOW ANYONE...

I've been using an accountant for many years because I've had complexities like: rental houses, multi-member LLC, two sole proprietorships, and K-1s.

I had a new accountant last year for the first time in over 30 years because my accountant retired. This new guy made 8 mistakes on my taxes. I shadowed him on TurboTax and while it was difficult to figure out several weird things, once I did my TurboTax return was accurate.

This year, I have to create Form 1065 for the first time for my LLC partnership and I'm struggling in how to do that. So, I will probably continue to use an accountant for awhile longer, even though it's getting expensive. Would like to move to Turbotax over the next few years.

 

[seattledan]

I used to use TurboTax, super easy and got it done in under an hour. I hired an accountant after I bought a rental because stupid TurboTax didn't take into account depreciation. Never asked me and so I ended up hiring an accountant to fix it and have been using the accountant ever since.

 

[Sunset]

I used to use TurboTax, super easy and got it done in under an hour. I hired an accountant after I bought a rental because stupid TurboTax didn't take into account depreciation. Never asked me and so I ended up hiring an accountant to fix it and have been using the accountant ever since.

That's the problem, doing your return in 1 hour is the mistake.

Depreciation is in all the major tax programs, but you must have breezed right past it in that 1 hour