I Actually Enjoy Doing My Tax Returns…

[ocean view]

I love doing our taxes, but my career was in corporate tax, so it’s in my blood.

I have an excel model that I built, filling in all I can from December statements. The only number I don’t have nailed down in Dec. is the foreign income and their taxes paid. At the end of the day, I’m usually within a rounding difference with TT. And that fact brings me much joy.

 

[unclemick]

Yeah, both a PITA and an interesting process. I enjoy getting it done and seeing (usually) that I got withholding mostly right.

Maybe it's an INTJ thing. But for 40 years or so I rough out my taxes and then take it to the same person(at a tax service) to do again and send it in. And then I flagellate myself with a whip if I missed something. Grin. Or at least get Grumpy. I did take 'break' with Turbo Tax 2005 to 2010 but that is another story.

Heh heh heh - Also wing it 4 times a year estimated tax payments.

 

[levindb]

Doing taxes does not bother me, but PAYING TAXES is something I do not like.

I start my journey each year in November with the early release of TT. I compare what it says to my basic spreadsheet models. I then have my custodian do a Withholding from IRA to overpay my Fed and State taxes in December every single year. This means I will not have to pay ANY estimated taxes...because I really do not like PAYING TAXES.

By overpaying, I may be giving Uncle Sam a few extra dollars in December, but I get them back in March. Otherwise, I would be PAYING TAXES in April, June, September, January, and then the final (if any) next April...and I really do not like PAYING TAXES.

 

[FLSUnFIRE]

You probably already know this, but you might have an opportunity to optimize your taxes a bit.

The broad idea is that filling some of your lower bracket now can reduce the amount of taxes paid in higher brackets later.

If you're getting a refund this year, you may not be realizing enough income.

Roth conversions and/or realizing capital gains are probably the most common ways to do this.

Possibly but the ROR keeping MAGI low for the premium tax credit is [-]pretty[/-] very good and I think exceeds the little bit of income taxes I could potentially save in the future by doing Roth Conversions now. In addition, by avoiding additional withdrawals to cover the cost of HI premiums, those funds continue to grow tax free and also allow me to delay starting my SEPP so my AT funds will last longer (all LT CG with a very low basis 10-15%).


Your post did remind me to keep conversions in mind and in years when my cash needs might bump my MAGI up anyway (they are coming), I might do conversions (potentially alternating years of "high" and very low income). Something to play around with in Excel one day.

 

[dixonge]

I enjoy the feeling I have *after* I have filed my taxes. Can't say I particularly enjoy the process, especially if I owe money on top of withholding.

How are you all doing your taxes so soon? You don't have any 1099-R's or SSA-1099's or other items that don't come out until the last day of January? I know some things get sent before the due date, but generally, I've never received any of those forms before the end of January. Then there's other things like brokerage statements that don't tend to come until February. You have none of these?

I have the same question. I see some responses indicating that they fill out most of their info from statements. I tried that, but I run into boxes that request info not on statements almost immediately. The correct answer might be to leave them blank, but then I would need to go into that screen again after the forms arrive, and that's just a lot of duplicated work IMHO. Hopefully Schwab will produce all the forms I need by mid-March.

Remember when all forms had to be sent to clients by the end of January? Those were the days...

 

[big-papa]

To my surprise our Vanguard consolidated statement dropped yesterday (earlier than last year) and I already had a couple other tax docs, so I spent several hours doing my Fed and state returns yesterday. Looks like everything is in order, but I’ll have to wait for a couple forms to be finalized in TT and a couple more docs (that I already know the $ for) before I can actually file. I’m pretty sure my return is middle in terms of complexity with (partially non deductible) IRA distributions/Roth conversions, dividends, interest, government obligations, ST/LTCG from MF sales, foreign taxes paid w carryovers, etc. Ended up with very small refunds on Fed and state, as planned, and I’ll apply them to 2023 taxes. And no penalties.

Don’t know why, but I enjoy the challenge of tax planning during the year (using Excel), and then confirming what I’ve planned by completing the returns. I developed a spreadsheet to calculate quarterly estimated taxes once I had no withholding, didn't see a reasonable alternative. I get a lot closer knowing what our investments are doing throughout the year than TT's rear view mirror 1040-ES predictions for the next year. Maybe I’m the only one

I considered a poll, but didn’t want to risk being a total outlier…

Whew! I thought I was the only one who likes this stuff. Then again I'm an excel geek...

Cheers
Big Papa

 

[iloveyoga]

I enjoy the feeling I have *after* I have filed my taxes. Can't say I particularly enjoy the process, especially if I owe money on top of withholding.



I have the same question. I see some responses indicating that they fill out most of their info from statements. I tried that, but I run into boxes that request info not on statements almost immediately. The correct answer might be to leave them blank, but then I would need to go into that screen again after the forms arrive, and that's just a lot of duplicated work IMHO. Hopefully Schwab will produce all the forms I need by mid-March.

Remember when all forms had to be sent to clients by the end of January? Those were the days...

I had received all of the information I needed either in the mail or on line. I did not need much, just SSA and our pension info. Luckily it seemed to come early this year.

 

[SecondCor521]

Possibly but the ROR keeping MAGI low for the premium tax credit is [-]pretty[/-] very good and I think exceeds the little bit of income taxes I could potentially save in the future by doing Roth Conversions now. In addition, by avoiding additional withdrawals to cover the cost of HI premiums, those funds continue to grow tax free and also allow me to delay starting my SEPP so my AT funds will last longer (all LT CG with a very low basis 10-15%).

Your post did remind me to keep conversions in mind and in years when my cash needs might bump my MAGI up anyway (they are coming), I might do conversions (potentially alternating years of "high" and very low income). Something to play around with in Excel one day.

Good luck! It's a whole different ball game, for sure. I'm still fine tuning things after six years of being retired.

Incorporating the effect of the ACA subsidies is certainly wise. I just view it as a parallel tax system and consider it as part of my marginal rate. Since my situation is pretty complicated, I just get ahold of tax software and put in all my information in December, then increase my Roth conversion until the effective marginal rate exceeds what I think I'll pay between now and age 80.

Overall, it's become clear to me by a number of threads here that Roth conversions vary greatly in their utility depending on the overall situation. They are a great boon to me, but YMMV as always.

 

[RxMan]

I actually enjoy going to the dentist…..

There, now we’re even.

 

[FLSUnFIRE]

Just got the satisfaction of filing mine now that I got my last 1099 and made my HSA and IRA contributions (using FreeTaxUSA for the first time, pretty happy with the free version). Looking forward to my refund! This was a pretty surreal year as my first calendar year FIREd.... My taxable income was half of my tax paid in 2020, the last full year of employment.

 

[harllee]

Just did a first draft of my taxes on TT, owe less than $3000 which is good. I will wait a few more weeks to file to make sure I have everything. Now to work on my mother's, hers will be more complicated because she itemizes, she has large medical expenses.

 

[TripleLindy]

I don’t dislike doing my taxes, but I still procrastinate. I’m getting an early start this year because Vanguard issued tax forms much earlier than I remember. I don’t have all of my forms, but I’ve entered my Vanguard data, or rather let the system pull the data. I really like that Document ID feature, which I assume is available in all tax software. I use TurboTax and it’s available there. My Vanguard forms are relatively complex, so the feature to have everything entered for me without logging in to the source is great. It doesn’t do everything, like determining amount of foreign investments that generated foreign tax withholdings, so you still need to know how to find that info in the dividend detail.

I still find the whole process pretty comical. I mean the IRS is sent all of this info, yet they make us figure out how to also send it to them and not make a mistake when doing so. Kind of ironic. And consider the 1095-A. It’s a pretty simple document, but requires 36 data entry fields. Copy and paste helps, but it seems silly that the government sends the info only to have us re-enter it.

Speaking of 1095-A, I need to figure out why my taxes went from $0 to something like $1500 once I entered the 1095 data. I took some losses last year, so my income was negative. I still have some forms to enter, but nothing that will change my income to positive. I clearly didn’t underestimate my income when determining my subsidy.

And therein lies my biggest beef with TurboTax: no way to see the actual return until I’ve finished and paid, at least not with the web-based version.

 

[CaptTom]

I won't say I enjoyed doing my taxes, but I sure enjoyed having them done after I filed today. Still have the state filing, but that's usually easier.

 

[scrabbler1]

I still find the whole process pretty comical. I mean the IRS is sent all of this info, yet they make us figure out how to also send it to them and not make a mistake when doing so. Kind of ironic. And consider the 1095-A. It’s a pretty simple document, but requires 36 data entry fields. Copy and paste helps, but it seems silly that the government sends the info only to have us re-enter it.

I have never had to enter onto Form 8962 more than 3 numbers from Form 1095-A. Those 3 numbers are the annual totals shown on Line 33. Sometimes, if the monthly SLCSP wasn't shown on Form 1095-A, I grabbed it from an attached table and multiplied it by 12. Also, Form 1095-A is sent to us by my state's exchange, no different to me than having to enter data from a W-2 or 1099 form sent to me by a private entity.

I have found Form 8962 one of the easiest forms to complete. And, from another thread I began a few weeks ago, I now have a better idea as to what the mysterious SLCSP amount will be at the start of the year.

 

[audreyh1]

And therein lies my biggest beef with TurboTax: no way to see the actual return until I’ve finished and paid, at least not with the web-based version.

Use the downloaded (or CD) version instead, you can see the return as you enter stuff and review forms at any time.

 

[tulak]

Use the downloaded (or CD) version instead, you can see the return as you enter stuff and review forms at any time.

+1. I always review the forms when doing my taxes. This year was no different since TurboTax was having problems recognizing two 1098Bs for mortgage interest (it was only counting one), which I was able to figure out when looking at how TT populated the worksheet.

The web-based versions have also used 3rd party trackers, making some of your data available to advertising companies such as Meta/Facebook.

 

[TripleLindy]

+1. I always review the forms when doing my taxes. This year was no different since TurboTax was having problems recognizing two 1098Bs for mortgage interest (it was only counting one), which I was able to figure out when looking at how TT populated the worksheet.

The web-based versions have also used 3rd party trackers, making some of your data available to advertising companies such as Meta/Facebook.

Yes, I’ve thought of that, but our laptop is a really old MacBook that has very little storage available, so the web-based version is just more convenient. Now that I’ve been informed of the ability to see details as I go, I may see if I can install it.

TurboTax allows you to opt out of data sharing, which I do, but I don’t know that they still don’t share my info.

As far as 1095 goes, TT has monthly entries for premium, SLCSP, and subsidy. If there’s a way to just enter the line 33 totals, I’ve completely missed it. Doh! Thanks for the tip!

 

[sengsational]

How are you all doing your taxes so soon? You don't have any 1099-R's or SSA-1099's or other items that don't come out until the last day of January? I know some things get sent before the due date, but generally, I've never received any of those forms before the end of January. Then there's other things like brokerage statements that don't tend to come until February. You have none of these?

I have the same question. I see some responses indicating that they fill out most of their info from statements. I tried that, but I run into boxes that request info not on statements almost immediately.

... I just get ahold of tax software and put in all my information in December, then increase my Roth conversion until the effective marginal rate exceeds what I think I'll pay between now and age 80.

I enjoy, I guess, one aspect of doing taxes: the satisfaction of "solving the puzzle" in December (I do the same thing with conversions as SC521 does).

Unlike many here, I don't have a spreadsheet that models the math of a tax return (that's the job of the tax software).

What I do is keep a list of expected IRS-related forms. Each expected form has one or more rows on a paper output such that I can fill-in the estimates. So, for instance Bank A will send a 1099-INT, I just look at the November statement which shows $15 and I'll write $20 in the estimate field. Fidelity will send a 1099-DIV, and again, just look at the November statement and swag it, with a row for qualified, and a row for unqualified.

As to "run[ning] into boxes that request info not on statements", that's something that is annoying, but information can be ascertained. I do so mostly from previous years' filings. But yeah, if you have never done something, you have no idea what that letter is in "Box 7", or if the IRA box is checked, and stuff like that. That takes some research. And with PPACA, you need to shop for and write down the price of the SLCSP at the time you buy the policy. So there are challenges to getting the numbers in advance, but it's possible.

There's also a checkbox on my paper inputs list for "exact" or "estimate". That all happens before I get the tax software around Thanksgiving.

When I get the tax software, because every single number is already on the input sheet, I can "do my taxes" in about 15 minutes, and that includes iterating on Roth conversion magnitude to tune marginal rate, and set the size of the tIRA withdrawal with 100% withholding (I don't do estimated taxes).

Because I engineered to underpay slightly, I'm in no hurry to submit the return. As the forms come in the mail, I record the actual value on my input sheet. There's a checkbox for "Entered/Validated in TaxCut". Once that column is completely checked-off, I'm free to eFile.

So although I don't "like" to do taxes, there is a level of satisfaction in executing the process with precision.

 

[kgtest]

To my surprise our Vanguard consolidated statement dropped yesterday (earlier than last year) and I already had a couple other tax docs, so I spent several hours doing my Fed and state returns yesterday. Looks like everything is in order, but I’ll have to wait for a couple forms to be finalized in TT and a couple more docs (that I already know the $ for) before I can actually file. I’m pretty sure my return is middle in terms of complexity with (partially non deductible) IRA distributions/Roth conversions, dividends, interest, government obligations, ST/LTCG from MF sales, foreign taxes paid w carryovers, etc. Ended up with very small refunds on Fed and state, as planned, and I’ll apply them to 2023 taxes. And no penalties.

Don’t know why, but I enjoy the challenge of tax planning during the year (using Excel), and then confirming what I’ve planned by completing the returns. I developed a spreadsheet to calculate quarterly estimated taxes once I had no withholding, didn't see a reasonable alternative. I get a lot closer knowing what our investments are doing throughout the year than TT's rear view mirror 1040-ES predictions for the next year. Maybe I’m the only one

I considered a poll, but didn’t want to risk being a total outlier…

I quite enjoy it as well. I learned a lot when working towards our filing this year. Ran some what-if scenarios before-hand (what if we file separate vs MFJ), did some tax planning ahead of time to see how I could maximize my deductions and Roth conversions etc. It's a fun and manageably challenge to me. I've always been surprised how much people spend to have a tax accountant file their tax returns. I've never spent a dime beyond the cost of the TurboTax program, and often that is on-sale (and of course I deduct that on my taxes).

Called the IRS yesterday to check if my Business 1120-S had been processed yet but it had not. I will call again in a couple weeks.

 

[TripleLindy]

So although I don't "like" to do taxes, there is a level of satisfaction in executing the process with precision.

Not only the satisfaction, I prefer to do my own taxes because of the understanding it affords me. My advisor had me in an investment that generated tax exempt interest. It wasn’t much, but was enough to push me over the ACA income limit a couple of times, so the ~$10k in tax exempt interest was causing me to repay ~$15k in subsidies. If someone else was doing my taxes and I just accepted their results without question, I doubt I would have caught that.

 

[jazz4cash]

I'd taken it to the recommended CPA because of the move/gross up thing. And she messed it up.

That was the early 90's and I've used Turbo Tax ever since.

M.

This is what happened to me. First time in many years I used a CPA because of the relocation,gross up, etc. I caught 2 errors. CPA corrected one immediately but argued with me on the other. Sheepishly admitted his error after a few days. I went back to him the next year and he made the same error! I like HR Block software.

 

[googily]

I'm another one who keeps a pretty intricate spreadsheet that keeps me on top of my taxes, and then enjoy when it's time to put it all in TT and see how close I am (usually just off by a few dollars on Fed, but then on the nose for state).

However, earlier last year I was tinkering with scenarios and decided to see how things would look if the SALT cap was removed--and then forgot to switch it back. That was an unfortunate shock. Had to send in a big estimated tax payment in January, and couldn't do any additional withholding without bumping myself into the 32% bracket, so ended up with a bit of a penalty.

 

[Rianne]

Has anyone filed noncovered stock sales? These stocks go back to 2008-2010 as stock options and have no backup paperwork. We don't know the dates of purchase but know the year. It's my understanding it is up to you the filer to provide the basis on the date of purchase. What does one do?

 

[Car-Guy]

I got all my final tax forms that I was waiting for yesterday, so this morning I completed my 2022 tax return. I'll hold off filing for a few more weeks "just in case" I think of something else... (Even though I'm getting back a few hundred).


Seems to be getting easier every year.

 

[jazz4cash]

Has anyone filed noncovered stock sales? These stocks go back to 2008-2010 as stock options and have no backup paperwork. We don't know the dates of purchase but know the year. It's my understanding it is up to you the filer to provide the basis on the date of purchase. What does one do?

Back in the day I had a tax prep guy (enrolled agent, actually) that would use the midpoint of the price range for the year. He kept copies of the WSJ for the last trading day of the year.