Doing My Own Taxes?

[TickTock]

For ~25 years we have used the same CPA to do our taxes. The main reasons are, (1) we both w*rked in one state and lived in another, complicating matters and increasing the chances that one or both states would send some bogus challenge our way [which did happen - but that's a story for another day], (2) concern that tax law would change and we'd miss out on something that would more than cover the CPA's fee, or (3) miss something and pay too little and go through the nightmare of correcting the return [which also happened, due to my mistakes].

And our CPA was very competent. However... He retired and sold the business to a new CPA, who we conditionally trusted because he trusted to sell her the business. BUT... she didn't understand HSA rules, incorrectly filled out the Foreign Tax Credit form 1116, and (I think) put some taxable numbers on the wrong line (the overall amount is correct, though).

So, given that we're both retired now and taxes are simplified, and the concerns I have with our new CPA, I'm seriously considering doing our own taxes with software starting next year.

What are your experiences with doing your own taxes?

 

[SnowballCamper]

I have always done my own taxes... filed a schedule C when I was 17. If the software can handle your return, no need to pay a person IMHO. But I admit other people certainly could have complex situations where paid service is certainly money well spent.

 

[audreyh1]

We’ve done our own taxes since we married. DH did his own before that. I had an accountant for a while, but she sold her business to someone else to go back to get an advanced degree. I was not impressed with the replacement as they had me filling out a huge questionnaire which forced me to total all my records just as if I were using the tax program myself. At that point I decided just to use the tax program.

DH had his own consulting business from many years and used TurboTax just fine. We’ve been using TurboTax for decades.

Once we retired I started doing estimated taxes and that got me into the nitty gritty because we had quite variable income at first as we would occasionally divest a large chunk of company stock and I often did the annualized income method for paying estimated taxes. No software for that, I had to build my own spreadsheets.

I rarely use the annualized income method anymore, but these same spreadsheets are used for end of year MAGI calculations to try to avoid going over some target IRMAA level. They also make a great check against the TurboTax program result. All the income data is available from my Quicken program. Still it’s quite a bit of work in December estimating our annual taxable income because some of it is guesses and estimates. By January I have a pretty good idea of what our tax liability will be and what I need to pay on Jan 15.

 

[Dash man]

We’ve been using TurboTax for as long as I can remember. We’ve had significant incomes, rental properties, stock options, IRA/Roth IRA contributions and conversions, rental property sales, short/long term dividends and capital gains, charitable contributions, K-1s, estimated payments and other tax items to consider, but only had to file one amended tax return for a stock sale I forgot to enter related to stock options that were exercised.
They’re easy to use.

 

[AudiDudi]

I've been doing my own taxes with Turbo Tax since it became available (late90s?) and I used one prior to that in the early 90's. I have never had an issue it. When I seller financed a loan on a house, I was very glad that TurboTax was able to compute that a portion of each payment was return of principle, Interest and capital gain. It also did a somewhat reasonable job on the K-1's (which I have since gotten rid of.)

 

[GrayHare]

You won't have to pay CPA fees, but IMO the main benefit to rolling your own tax return is you learn how taxes are applied. That knowledge lets you optimize your investments and generate tax savings that can far exceed any reduction in CPA fees.

 

[Al18]

I suggest using one of the tax programs and doing your own taxes. It sounds like you have a good understanding of your taxes. Before filing the taxes, print it out and do a line by line comparison of last years taxes and correct any errors before filing.

 

[Midpack]

I've done my own taxes since 1976, started using Turbotax in 1996, so 28 years ago. For quite a few years my tax return has included a 1040, Schedule 2 & 3, Schedule B Interest & Ordinary Dividends, Form 1116 Foreign Tax Credit, Form 8606 IRA Distributions/Roth Conversions, Form 8995 QBI, Form 8960 NIIT, Soc Sec, and all the associated worksheets. Makes efiling Fed and completing state taxes a breeze as well. And all the pertinent data from this year automatically carries over into your next return. I've been very happy with Turbotax.

 

[walkinwood]

Our investment income is all mutual funds and we don't have any other income streams till SS kicks in.
Taxes are pretty simple to do using a program like Turbotax. I have done our taxes for years - even when working and it is pretty simple. This forum & the turbotax forum can help if you get stuck.

 

[JohnIL1975]

I would buy TT for this year and enter everything and compare to the returns from your CPA. This way you are comfortable doing them next year. Plus all your information will transfer for next year and make the process easier.

 

[Mr. Tightwad]

I do my own taxes every year. Took about 4 hours.

GF pays around $500 to get hers done.

 

[Gumby]

I have done my own taxes for the last 48 years (from the first year I ever filed a return). I have used the H&R Black program for at least the last 25 years, mainly because it makes sure I don't forget anything and it avoids math errors. But I can and do estimate my year-ahead taxes with just a calculator and a sheet of paper in the beginning of January. I usually end up within a couple hundred bucks of where I stand when I run through my taxes using the program at the end of the year.

I don't find taxes to be all that daunting, provided you pay close attention to the instructions and properly research things if you are unsure. It also probably helps that I have always kept my financial affairs fairly simple.

 

[REWahoo]

This was my 61st consecutive year of doing my own taxes. Tax software definitely improved the experience vs. a calculator and a #2 pencil.

 

[imjustawarrior]

I have always done my own taxes. When I got married, my DW had a condo we rented. At that point I switched from filling out the forms manually to using TT. I didn't want to learn the rental tax laws.

If you pretty much just have 1099s and foreign tax credit, it is not that hard. Take a look at your last tax return and see if you understand it. You can always ask questions here.

 

[Zona]

I would buy TT for this year and enter everything and compare to the returns from your CPA. This way you are comfortable doing them next year. Plus all your information will transfer for next year and make the process easier.

I did this for a couple of years when we had a more complicated situation that included rental property and business income/home office deduction. Our CPA occasionally made mistakes, as did I, but they were never the same mistakes and I learned a lot. Enough that I felt confident to do the returns myself with TT for the past couple years now that we are ER and our situation is more straightforward.

 

[sengsational]

I've done my own every year, even when I had a new situation and paid an accountant. In those instances, I was paying for training. When on my own, I made one error where I paid tax on a sum that was too large (didn't net out something I should have), but not that many dollars. That one I discovered too late to amend. They know everything, so why don't they just send me a bill?

 

[SecondCor521]

I'm in my sixth year as an AARP Foundation Tax Aide volunteer tax preparer. There are several others here who also volunteer this way.

If you have time, you can probably get your taxes done and e-filed for free via Tax Aide. You don't need to be an AARP member or of any particular age. There are certain parts of tax law we don't do, but we do a surprisingly wide range of returns.

If you do choose Tax Aide, either make an appointment or show up at the site 45 minutes before they open, and bring a magazine or book to read while you wait. It may take a few hours, but it's free and high quality.

Yes, maybe 80% to 90% of the time tax preparation is just entering the numbers from the boxes on the forms into the boxes on the screen in TurboTax or whatever program you like to use.

But the 10% to 20% of the time when you don't just enter the number, there can be serious tax savings. But you have to know about these things in order to take advantage of them. If you don't fill out the form or put the numbers in the right spot, the IRS and state tax agency will accept your return, your oversight, and your overpayment without a peep.

Knowing about any tax benefits that apply to you (or maneuvering yourself so that they apply to you in a future year) can provide serious tax savings. Turbotax and the others try to handle this by asking lots of questions; CPAs try to handle this by sending you a multiple page questionnaire. You sort of have to understand the questions well to answer them accurately, which can be tricky sometimes.

Keeping up on tax law changes can provide serious tax savings.

Understanding how taxes work and doing multi-year tax planning can provide very serious tax savings.

 

[Healthy Lifestyle]

Is it okay to use TT tax software on-line or download Turbo Tax software to a computer?

 

[rk911]

I did our fed and state tax returns for decades. Pretty basic stuff...W2s and later a few 1099s as we started to invest. Then more 1099s for earnings as our strategy was buy and hold.

Then I was tapped to act as successor trustee for my BIL (and I was also a bendiciary). My first of 3 additional deaths...FIL/MIL, another BIL and my mother, where I was either the successor trustee or did the leg work for my wife. I should hang a shingle.

We hired a tax guy in 2021 from the same firm that did the estate tax returns for my first BIL in 2003 to do the tax returns for the other BIL. As a result of that death our NW effectively doubled so we hired a money manager and then used the same tax guy for our returns for the past 3-years. But I also feed the data into Turbo Tax just to see what happens. The pro beats TT every year but not my very much.

 

[equakesfan]

If your able to catch a mistake by your CPA, your ready to do your own taxes. The question you should next ask is what software to use. I've used Turbo Tax since the 80s (my father did taxes as a side hustle).

As for TT a lack of a CD bothers me (what happens in 7 years when I don't have a CD or the computer I did the taxes and I didn't spend $ on tax defense will Intuit support me?). If I still had a CD I'd recommend TT but without a CD I can't.

 

[rk911]

If your able to catch a mistake by your CPA, your ready to do your own taxes. The question you should next ask is what software to use. I've used Turbo Tax since the 80s (my father did taxes as a side hustle).

As for TT a lack of a CD bothers me (what happens in 7 years when I don't have a CD or the computer I did the taxes and I didn't spend $ on tax defense will Intuit support me?). If I still had a CD I'd recommend TT but without a CD I can't.

I copied the installation file I downloaded to a CD and the product key is in the file folder and saved as a PDF as well. But, I would rather have the CD for my archives. I do find it somewhat liberating to ship everything to the CPA.

 

[RetiredAndLovingIt]

Is it okay to use TT tax software on-line or download Turbo Tax software to a computer?

I prefer the desktop version because it includes a What If Worksheet Planner for next year were you can duplicate this year's numbers over to next year and play around with the numbers to estimate taxes at different income levels. Great for Roth Conversions and Social Security taxation. There are other calculators that do it but I use this one every year after I finish my tax return and then again around October or so.

 

[TickTock]

Yes, maybe 80% to 90% of the time tax preparation is just entering the numbers from the boxes on the forms into the boxes on the screen in TurboTax or whatever program you like to use.

But the 10% to 20% of the time when you don't just enter the number, there can be serious tax savings. But you have to know about these things in order to take advantage of them.

Right, it's the 10% to 20% that I'm concerned about.

If you don't fill out the form or put the numbers in the right spot, the IRS and state tax agency will accept your return, your oversight, and your overpayment without a peep.

Yes, they'll cheerfully take your overpayment - and if you make a mistake the other way and underpay, they'll slap interest on it. The asymmetry bugs me.

 

[ls99]

Yep. Just finished 24s, and efiled. Will send check on april 12.

 

[GrayHare]

Is it okay to use TT tax software on-line or download Turbo Tax software to a computer?

Using the online version is fine if you're comfortable with your tax and personal info being online. Some don't mind, others prefer keeping that data more private. Whatever fits for you.