doing taxes yourself
- Thread starter ram_man
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My wife has been doing ours lately, but in the past we've always done our own. It's just a large word problem; if you're worried, print out the forms a couple of times (or grab at couple at the post office, I think they still have them there?) and run the numbers a few times. At the very least, give it a go before paying for software--it might be easier than you think.
Granted, we have few deductions, no self employment, nothing that complicated on ours.
Granted, we have few deductions, no self employment, nothing that complicated on ours.
I use a CPA for both federal and state income taxes. Have done mine too in the past but even after paying the CPA I as a rule come out money ahead.
Too if there is a problem you have some recourse.
Too if there is a problem you have some recourse.
You can do turbotax online as well. You can actually do that and taxact for free without filing. I did both a few years ago, came out to the same amount.
If you use a CPA and come out money ahead you should know why that was the case... it's not like they have a different set of rules... just more experience playing the game.
If you use a CPA and come out money ahead you should know why that was the case... it's not like they have a different set of rules... just more experience playing the game.
If you do not have any business and just regular income doing it yourself is very simple I use tax act for federal and state. I used tax act and used a CPA. The dollar amounts were very close and after the cost of the CPA, tax act was the winner.
Depending on your tax situation, the TurboTax website could be all you need. Filing the federal 1040-EZ on their website is free. Many states also allow you to file online for free. For a guy like me, who is unmarried, no dependents, and renting, my takes take all of 10 minutes. But if you have rental properties, home office, investments, etc., it might require a 1040-A or the full 1040. In those situations, just pay the $19.95 for the necessary TurboTax edition.
And no, you can't just use your W-2 since it doesn't contain certain key information you'll need. IIRC you can't even file until at least January 15th. Most employers are pretty good about getting the tax docs to you on time.
And no, you can't just use your W-2 since it doesn't contain certain key information you'll need. IIRC you can't even file until at least January 15th. Most employers are pretty good about getting the tax docs to you on time.
I've done Turbo Tax/HR Block Taxcut online for years. Really easy and self explanatory. However, I don't have a complicated return. A more complicated returns would be better served by a CPA.
No you can't use a pay stub as a substitute for a W-2. There is more pay information on a W-2 that must be entered on your 1040 than you can find on a standard pay statement.
No you can't use a pay stub as a substitute for a W-2. There is more pay information on a W-2 that must be entered on your 1040 than you can find on a standard pay statement.
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Doing taxes yourself with software is very easy if you have a normal return. And if you have questions about anything more complicated, you can search online and ask around. I do taxes for a living and the only time I recommend someone get a CPA is if they have a business where more complicated and accurate technical accounting methods need to be known and employed.
Originally Posted By: volk06
If you do not have any business and just regular income doing it yourself is very simple I use tax act for federal and state. I used tax act and used a CPA. The dollar amounts were very close and after the cost of the CPA, tax act was the winner.
+2, I use TaxAct and love it. I print the forms then when I'm wondering why I can take such-and-such deduction I get the .pdf instructions from IRS that explain them line-by-line to my satisfaction.
If you do not have any business and just regular income doing it yourself is very simple I use tax act for federal and state. I used tax act and used a CPA. The dollar amounts were very close and after the cost of the CPA, tax act was the winner.
+2, I use TaxAct and love it. I print the forms then when I'm wondering why I can take such-and-such deduction I get the .pdf instructions from IRS that explain them line-by-line to my satisfaction.
Originally Posted By: supton
My wife has been doing ours lately, but in the past we've always done our own. It's just a large word problem; if you're worried, print out the forms a couple of times (or grab at couple at the post office, I think they still have them there?) and run the numbers a few times. At the very least, give it a go before paying for software--it might be easier than you think.
Granted, we have few deductions, no self employment, nothing that complicated on ours.
+1 I haven't used software, but in my experience, half the trouble/difficulty if getting on the right form(s), right schedule(s), etc. Ours are not overly complicated but it takes time to make sure I'm on the right form, have everything we need from all states, if you are doing everything on paper, double and triple checking numbers, adding capital gains/losses correctly, etc.
My wife has been doing ours lately, but in the past we've always done our own. It's just a large word problem; if you're worried, print out the forms a couple of times (or grab at couple at the post office, I think they still have them there?) and run the numbers a few times. At the very least, give it a go before paying for software--it might be easier than you think.
Granted, we have few deductions, no self employment, nothing that complicated on ours.
+1 I haven't used software, but in my experience, half the trouble/difficulty if getting on the right form(s), right schedule(s), etc. Ours are not overly complicated but it takes time to make sure I'm on the right form, have everything we need from all states, if you are doing everything on paper, double and triple checking numbers, adding capital gains/losses correctly, etc.
I have been doing my own taxes since I was 16, I learned from my mother who was an accountant. I did it by hand until around 2002 when I started using Taxcut (now H&R block) or Turbo Tax. We have had a home, home-office, business expenses, vehicle mileage, investment income as well as multiple W-2's and 1099's. Both software's offer editions that go from basic to business and range from $19.99 for basic to over $100 for business'. Ours typically costs around $60 for the self employment edition. We do not have state income tax but most all of the software has state editions built into them. They are actually pretty easy to use and walk you through everything.
I've done it myself with H&R Block's tax software since the late 90s. My primary reason for switching to this was rental real estate. It remembers all the info including when I started applying depreciation and the amount of depreciation. Since then they have more complete packages that include one state form. I remember the first time I did it I was looking around everywhere for a separate copy of their state software. Now it's included as one download.
I remember my mom insisted that I take my completed return to her tax preparer (a former IRS employee BTW) because she thought he would be able to find me some extra deductions or a way to get a bigger refund. He looked at my prepared return and said he thought I did a pretty good job and his services wouldn't yield me anything that I hadn't already figured out on my own. I also met him several times. He said a mistake that doesn't materially change how much tax liability is typically ignored, like putting an amount in the wrong entry - as long as it's all added up. He also said something about targeted audits were usually applied when the IRS thought that it might be able to get at least $10,000 - so only high income earners typically got these audits. Of course anyone is subject to a random audit.
I do remember coming across an accountant I know on the day before tax filing day. He's got a CPA, but I wasn't sure about what field he was in. I asked why he wasn't in the office doing last minute taxes for his clients. He said he actually pays a preparer to do his taxes, and that he was in corporate accounting. He joked that if I needed some corporate taxes or audit preparation, he was the guy for that.
Now I'm married to an accountant who used to do general accounting, including tax preparation for clients. I still do the taxes, although my wife goes over the form and does some of the entries. Sometimes it is a little tricky with the software refusing to move forward before an "error is corrected". There are sometimes these almost insignificant checks that the software insists on for thoroughness, but where the amount of tax liability doesn't really change. I also remember her being frustrated because it wasn't professional tax preparation software. She was used to being able to add up amounts inside a box. The consumer tax preparation software doesn't do that.
I remember my mom insisted that I take my completed return to her tax preparer (a former IRS employee BTW) because she thought he would be able to find me some extra deductions or a way to get a bigger refund. He looked at my prepared return and said he thought I did a pretty good job and his services wouldn't yield me anything that I hadn't already figured out on my own. I also met him several times. He said a mistake that doesn't materially change how much tax liability is typically ignored, like putting an amount in the wrong entry - as long as it's all added up. He also said something about targeted audits were usually applied when the IRS thought that it might be able to get at least $10,000 - so only high income earners typically got these audits. Of course anyone is subject to a random audit.
I do remember coming across an accountant I know on the day before tax filing day. He's got a CPA, but I wasn't sure about what field he was in. I asked why he wasn't in the office doing last minute taxes for his clients. He said he actually pays a preparer to do his taxes, and that he was in corporate accounting. He joked that if I needed some corporate taxes or audit preparation, he was the guy for that.
Now I'm married to an accountant who used to do general accounting, including tax preparation for clients. I still do the taxes, although my wife goes over the form and does some of the entries. Sometimes it is a little tricky with the software refusing to move forward before an "error is corrected". There are sometimes these almost insignificant checks that the software insists on for thoroughness, but where the amount of tax liability doesn't really change. I also remember her being frustrated because it wasn't professional tax preparation software. She was used to being able to add up amounts inside a box. The consumer tax preparation software doesn't do that.
I have an accountant handle it, but I also have a business and they are way to complicated at this point for me and would take to much time.
That too.
Originally Posted By: dareo
My tax guy costs the same as the level of turbo tax i need, so i just have him do it all now. Even if it did cost significantly more, it's worth it to blame a professional and get their help in an audit situation.
TurboTax will represent you if you get audited.
My tax guy costs the same as the level of turbo tax i need, so i just have him do it all now. Even if it did cost significantly more, it's worth it to blame a professional and get their help in an audit situation.
TurboTax will represent you if you get audited.
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I too have been using TaxAct. I think I've used it for a good 5-6yrs now. Very easy. Prior to that was Taxcut and TurboTax.
Originally Posted By: dparm
Originally Posted By: dareo
My tax guy costs the same as the level of turbo tax i need, so i just have him do it all now. Even if it did cost significantly more, it's worth it to blame a professional and get their help in an audit situation.
TurboTax will represent you if you get audited.
While they say they'll do it, my understanding is that it's a far more limited involvement than if you hired an in person tax preparer like and accountant, H&R Block, Jackson-Hewitt, etc. You'd have to read the fine print for what they cover and what the procedures are. It's my understanding that some of this "audit protection" can evaporate if it's discovered the customer made a mistake, and often it's these mistakes that can trigger an audit.
I thought that with a physical location, they'll provide someone to be with you during the audit. I've read some of the terms for audit protection with home tax preparation software, and they might only start off with a phone consultation.
I looked up the specifics for TurboTax. They have an optional $39.95 "Audit Defense" plan where they work with a company (Tax Resources Inc.) to provide agents to see a customer against and IRS audit like you'd get from a traditional tax preparer. It apparently doesn't have to be paid for before filing, but has to be paid for before the audit starts. I'm not sure, but it sound like once you receive an audit letter, you don't have the option of paying for this, so it's more or less like a prepaid insurance plan. Their terms specifically say that an audit starts once the IRS or state tax agency initiates contact.
Quote:
https://turbotax.intuit.com/corp/auditdefense.jsp
Audit: Audit means any communication, including telephone calls, initiated by the IRS or State income tax agency that wishes to audit, examine, review, investigate or verify any item or items on the IRS income tax forms and State equivalent listed on the membership certificate.
https://ttlc.intuit.com/questions/1901215-what-is-audit-defense
Quote:
http://www.consumer-rankings.com/tax-software/turbotax-review/
Audit Protection
If you're nervous about getting audited, you can choose to pay $39.95 for TurboTax's supplemental Audit Defense service which is run in conjunction with TaxResources. This service must be purchased before the audit is commenced, and is relevant only to returns filed on time. Through Audit Defense, a team of tax professionals will try to resolve the audit on your behalf so that you don't have to worry about it. Those who filed their online tax return late can contact the company for assistance.
Free audit support is also available for all users of TurboTax personal tax products, but does not cover TurboTax products for businesses. This service helps filers understand why they've been contacted and to plan their next steps in the process.
There's actually complaints up the wazoo about this service.
Quote:
http://raoulpop.com/2010/03/31/audit-defense-may-not-be-worth-the-price/
In the meantime, the IRS also found out about the error and contacted them. This is where the Audit Defense service should have shined. Instead, my contact got the run-around. The Audit Defense team weren’t willing to help them in a timely fashion, didn’t want to contact the IRS on their behalf like they should have done, and only ended up helping them — if you might call what they got help — after several written requests. In the end, my contact lost out on precious time, got extra stress they didn’t need, and will need to pay the IRS additional penalties.
It looks to me like the Audit Defense people failed on three of their basic promises: they didn’t step in right away to deal with the IRS, they didn’t handle the entire tax audit, and they didn’t keep IRS penalties as low as possible.
What they have included with TurboTax is more like what H&R Block at Home provides. It's not someone who will be there in person. It's someone who will go over your return on the phone or by email to prepare the customer for the audit process. I guess than can be useful for simple errors, but anything more severe than that and you need a tax attorney and not one of these services.
Originally Posted By: dareo
My tax guy costs the same as the level of turbo tax i need, so i just have him do it all now. Even if it did cost significantly more, it's worth it to blame a professional and get their help in an audit situation.
TurboTax will represent you if you get audited.
While they say they'll do it, my understanding is that it's a far more limited involvement than if you hired an in person tax preparer like and accountant, H&R Block, Jackson-Hewitt, etc. You'd have to read the fine print for what they cover and what the procedures are. It's my understanding that some of this "audit protection" can evaporate if it's discovered the customer made a mistake, and often it's these mistakes that can trigger an audit.
I thought that with a physical location, they'll provide someone to be with you during the audit. I've read some of the terms for audit protection with home tax preparation software, and they might only start off with a phone consultation.
I looked up the specifics for TurboTax. They have an optional $39.95 "Audit Defense" plan where they work with a company (Tax Resources Inc.) to provide agents to see a customer against and IRS audit like you'd get from a traditional tax preparer. It apparently doesn't have to be paid for before filing, but has to be paid for before the audit starts. I'm not sure, but it sound like once you receive an audit letter, you don't have the option of paying for this, so it's more or less like a prepaid insurance plan. Their terms specifically say that an audit starts once the IRS or state tax agency initiates contact.
Quote:
https://turbotax.intuit.com/corp/auditdefense.jsp
Audit: Audit means any communication, including telephone calls, initiated by the IRS or State income tax agency that wishes to audit, examine, review, investigate or verify any item or items on the IRS income tax forms and State equivalent listed on the membership certificate.
https://ttlc.intuit.com/questions/1901215-what-is-audit-defense
Quote:
http://www.consumer-rankings.com/tax-software/turbotax-review/
Audit Protection
If you're nervous about getting audited, you can choose to pay $39.95 for TurboTax's supplemental Audit Defense service which is run in conjunction with TaxResources. This service must be purchased before the audit is commenced, and is relevant only to returns filed on time. Through Audit Defense, a team of tax professionals will try to resolve the audit on your behalf so that you don't have to worry about it. Those who filed their online tax return late can contact the company for assistance.
Free audit support is also available for all users of TurboTax personal tax products, but does not cover TurboTax products for businesses. This service helps filers understand why they've been contacted and to plan their next steps in the process.
There's actually complaints up the wazoo about this service.
Quote:
http://raoulpop.com/2010/03/31/audit-defense-may-not-be-worth-the-price/
In the meantime, the IRS also found out about the error and contacted them. This is where the Audit Defense service should have shined. Instead, my contact got the run-around. The Audit Defense team weren’t willing to help them in a timely fashion, didn’t want to contact the IRS on their behalf like they should have done, and only ended up helping them — if you might call what they got help — after several written requests. In the end, my contact lost out on precious time, got extra stress they didn’t need, and will need to pay the IRS additional penalties.
It looks to me like the Audit Defense people failed on three of their basic promises: they didn’t step in right away to deal with the IRS, they didn’t handle the entire tax audit, and they didn’t keep IRS penalties as low as possible.
What they have included with TurboTax is more like what H&R Block at Home provides. It's not someone who will be there in person. It's someone who will go over your return on the phone or by email to prepare the customer for the audit process. I guess than can be useful for simple errors, but anything more severe than that and you need a tax attorney and not one of these services.
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Been using Turbotax, software version, for more than ten years.
It remembers your info from last year, and imports it into the current year.
I get the Deluxe, which includes a free state download...
It remembers your info from last year, and imports it into the current year.
I get the Deluxe, which includes a free state download...
I do it old-school, instructions, forms, statements and whatnot spread all over the kitchen table and a calculator (TI-82, also old-school
). I have relatively simple returns most years mostly just regular income, house & kids sorta things (wife cashed in some stock options one year, another had some very small capital gains). It's actually sorta fun, in the way changing your own oil instead of taking it to a shop is.
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