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HIV 2 Elway
January 23, 2009 2:55 PM
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I think every middle to upper-middle class person should do their own taxes. If you go through the process you'll find deductions that you can take advantage of in subsequent years.

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1 replies
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Megladon
January 23, 2009 3:58 PM
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@HIV 2 Elway Resurrected:


I'm a middle to upper-middle class person, I made about $60k in 08, paid $0 in taxes except to the state of residence I had. I was out of the country for 332 (calander) days giving me a tax free status on all income, however I was smart enough to make several investments that earned money, as well as making a few charitable contributions, throw in a marage, and factor in I was still able to collect unemployment for 4 months and I'm not about to try to figure out my taxes by myself.

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summerbee
January 23, 2009 2:55 PM
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This will be my first year hiring an accountant. I'll have 5 W-2's and multiple state tax returns to file. The joys of being a nomadic college grad. Dammit.

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6 replies
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snowburnt
January 23, 2009 3:51 PM
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@summerbee: It's never a terrible idea to get a guy to do your taxes, just make sure he doesn't charge you too much. I know someone who did people's taxes for a while, they didn't pretend to be a CPA but all they did was make sure they had their paper work and put it into turbo tax for them then mail it. I think they charged like 10 or 15 dollars. You don't need some fancy accountant to look for loopholes, you just need someone to make it simple, right?

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consumerd
January 23, 2009 10:41 PM
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@snowburnt:

I thought turbotax cut you off from doing this. Something like 7 total returns and you had to buy the software again (like a time bomb).

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kimsama
January 23, 2009 3:19 PM
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@summerbee: Do try KStrike155's suggestion if you feel comfortable with it -- it could save you money, with just a little bigger investment of your time (and I know I had more time than money during and right after college). Just be careful of things like making sure you file the paperwork to have your non-domicile state's taxes transferred to your state of domicile. Ugh, that was the worst part about being a student.

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KStrike155
January 23, 2009 3:08 PM
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@summerbee: Just use TurboTax Free Edition online. It does it all for you. I'm in the same situation... went to school in MA, residence in CT until March, but worked in MA, then I graduated and moved to MA and work in MA. It's easy. Just do it yourself. I'm assuming you can use the free edition because you're a \"nomadic college grad\" and we generally don't make over $54k.

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summerbee
January 23, 2009 4:26 PM
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@KStrike155: Thanks. I think I'm going to try TurboTax as a first step -- at least for my federal taxes, which shouldn't be TOO difficult, I'm hoping.


I do have a conundrum with Delaware and PA, though: my Delaware state return wants me to file my PA-40 first, and my PA-40 wants me to file my Delaware return first. Seriously!?


And let's not even mention local. Nothing confuses me more than local tax responsibilities.

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theblackdog
January 23, 2009 3:24 PM
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@KStrike155: Bad idea, they still charge you for each state return. 5 state returns will add up.

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Corydon
January 23, 2009 6:37 PM
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@theblackdog: I usually use one of the free online services to file my federal taxes only. Many states (like Colorado, where I live) have their own free online filing options. And since the state refunds are generally not as big, nor filing as complicated, even if you have to file using pencil-and-paper, that's not quite as big of a deal.

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theblackdog
January 23, 2009 9:25 PM
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@Corydon: It looks like Maryland has a free option for filing their taxes as well. I am going to be all over this, as soon as I get the forms I need to complete the Federal return!

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summerbee
January 23, 2009 4:28 PM
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@theblackdog: Thankfully it's not 5 states -- just 5 W-2's. A result of a lot of 2nd jobs and minor writing projects that I had to fill out tax paperwork for.

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cabjf
January 23, 2009 3:37 PM
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@theblackdog: Actually, do what I did and go through to find out the total, then do most of the state forms yourself and see if they match up or at least come close. I filed my Federal and home State forms through Turbotax online but filled out the other state form myself and made sure that the amount was close or equal to what Turbotax came up with.

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MaytagRepairman
January 23, 2009 4:16 PM
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@KStrike155:
A few years ago I was using TurboTax to file across multiple states. Two months in Iowa and ten months in Washington. Washington doesn't have income taxes. It kept butchering it up by applying all of my income for the entire year to Iowa and saying that I owed a huge penalty to Iowa on top of that.


I filed a couple of problem reports with them and never received an answer. Ended up printing the forms out and doing the Iowa taxes by hand. They've probably fixed it by now though, or it only happens if one of the states doesn't have an icome tax. Any how, after that year I never went back to Turbo Tax again.

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root4root
January 23, 2009 2:55 PM
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I always have someone else do my taxes. As a student, they find all kinds of deductions I would have never thought of.

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Elvisisdead
January 23, 2009 9:13 PM
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@root4root: They don't find them like they're hidden treasure. They're there. $30 and TurboTax will tell you about them, too.

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kellyhelene
January 23, 2009 4:49 PM
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@root4root: if you're a student you could go to irs.gov to find a free preparer (like turbotax online- you just need to reach it through the irs link), and it will ask you questions to find all those school deductions, too.

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hellinmyeyes
January 23, 2009 2:57 PM
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I've been doing my own (pencil & paper method) for a few years, but I'm also a young professional with fairly straightforward finances. I think if you start when it's simple, it will be easy and rote enough when things get more complicated that it doesn't add any real difficulty. Or do the software route. You get the benefits of having a professional with (hopefully) less cost, although I've seen a big spike in bad reviews and complaints about TurboTax the last couple years.

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Eyebrows McGee (now with more baby!)
January 23, 2009 4:23 PM
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@hellinmyeyes: I did my own, pencil and paper, for years, which I think is a worthwhile thing to do so you learn how the whole thing works and know you CAN do it if you HAVE to. When I was at a certain level of complexity + lack of time, I used Turbo Tax with no problems.

Then I married into an accountant -- my father-in-law is a CPA -- and haven't done my taxes since. I actually kind-of miss having control over it, but he's kind-of a big deal tax guy and it's really important to him to do it for us to show his love, the same way my mother has to bake us large quantities of cookies.

I've actually got to get all that shit together this next week or so; we try to get him everything first week of February so he can get us out of the way before he's swamped.

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Eyebrows McGee (now with more baby!)
January 23, 2009 4:26 PM
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@Eyebrows McGee: Oh, I should say -- my father-in-law CPA DOES find us more deductions than TurboTax, and, maybe more importantly, helps us with tax planning now that it's gotten more complicated (withholding for two different jobs one of which is state with weird rules which makes it complicated, self-employment, baby on the way, mortgage interest deduction, student loan interest deduction, pre-tax health care savings, retirement accounts, etc.).

I'm not sure we're at a point of either complexity or income where we would PAY for this advice (we're also both lawyers with some tax experience, so we could in theory do this ourselves, but it'd be a time-consuming PITA), but there's DEFINITELY a lot of value in his advice that we don't get from software. (Or from a commercial preparer.)

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snowburnt
January 23, 2009 3:54 PM
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@hellinmyeyes: Most of the complaints about Turbo Tax have to do with pricing I think. I've used it for years without any issue...Of course I also have straight forward financing. Even though it tells you about all the deduction opportunities I still knew an accountant fried I could call to ask what the hell it was talking about when it said stuff like depreciation and percentage of use for business and why I should care.

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ekthesy
January 23, 2009 3:00 PM
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@hellinmyeyes:

Same here (filing married and jointly). Pencil, paper, and the 1040A booklet. It's really, really easy if your income is simple.

Once we buy a house, though, I think I'll have a professional do it because there are a lot of deductions you can take in that scenario.

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samurailynn
January 23, 2009 4:28 PM
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@ekthesy: Even once you buy a house it's not that bad. Just go through every line of the tax form and read the instructions. That way, if there's a credit you can take, you won't miss it. I read through every line of Schedule A also, just to make sure I wasn't missing anything I could itemize. Our house is cheap enough (and therefor our loan small enough) that this will probably be the only year that's worthwhile to itemize. I would also suggest looking through a Schedule A at the beginning of a tax year in which you think you might be able to itemize so that you remember to keep track of things and save receipts for things that you normally wouldn't.

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hellinmyeyes
January 23, 2009 4:35 PM
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@samurailynn: That's something I was going to mention. Just reading pub 17 and reading each 1040 line (which you have to fill out anyway) gives you more than 85% of what you need to eye the deductions. Anything else really boils down to (semi-)legal accounting shifting and wizardry, especially with small business. The deductions are all there, and they're all explained. They don't need to be \"found\".

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GreenHawkIA
January 23, 2009 2:59 PM
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I plan on going the not quite pen and paper nerd route, but almost. New this year at IRS.gov is online fillable forms. It's the convenience of e-file without using tax software and it costs exactly $0, no matter how much money you make.

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5 replies
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Oranges w/ Cheese hates what Christmas has become
January 23, 2009 7:58 PM
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@GreenHawkIA: Wow! Thank you for this link!
I was going to have to pay Turbo Tax because I had some investments to file, but after reading the instructions and filling out all the happy forms it was actually REALLY EASY! Thank you!

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Keen314
January 23, 2009 4:41 PM
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@GreenHawkIA: Beat me to it, I was going to link that too! I e-filed using those last night.

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acrobatic rabbit
January 23, 2009 4:58 PM
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@Keen314: I e-filed last year. It's a great way for people who are either 1) single or not married, 2) receive one W-2, and 3) don't want to pay or have the money to pay for \"people\". And it's relatively easy and user-friendly

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GuJiaXian
January 23, 2009 2:59 PM
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I've always done my own taxes by hand. I bought a home in 2008 and also had a second child, so I actually am giving real thought to purchasing some tax software. The \"old school\" part of myself is just resistant to the idea of paying to do something I can technically do myself for free (that and it looks like TurboTax charges $30-40 for state filing).

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tbbx
January 23, 2009 9:42 PM
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@GuJiaXian: I strongly suggest that you get some tax software this year.

You may well be itemizing this year. The software can help you identify itemized deductions (mortgage interest, property tax, state income tax, charitable contributions, large medical bills, etc).

Also, the software will easily handle the Child Tax Credit (nonrefundable) and the Additional Child Tax Credit (refundable). These can be tricky and annoying if you are doing the return on paper.

Also, watch out for the new Homebuyer credit this year. It's listed as a $7,500 refundable credit, but it is actually a loan.

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Flame
January 23, 2009 3:51 PM
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@GuJiaXian: I qualified for free federal and free state filing this year through turbo tax....which means I didn't make nearly enough money :) but then, I also graduated.....All in all, I like Turbotax free better than HR Block's free version

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Dan Grossberg
January 23, 2009 3:02 PM
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last year was the first time I hired someone to do my taxes. holy crap, well worth it, at least in my case. i just started a new job in a different state and tried at first taxcut and turbotax. unhappy with the results, i decided to go to a pro. saved me a lot of $$...

i got married in 08, started 2 businesses, so i definitely will be going back, at least for a few years until i get the hang of it myself. if anyone in jersey needs a good referral, lemme know!

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lars2112
January 23, 2009 3:36 PM
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@Dan Grossberg:


Just a word of caution..... what kind of \"pro\" did you go to? I worked for the IRS when I was in undergrad, some so called \"pro's\" will \"find\" deductions that turbo tax and others don't but they end up twisting the truth and if you get an audit you will have to pay it all back.


I am not suggesting this person was doing anythnig like that, but this is true for a lot of those accountants that find decuctions.... you can get burned badly a few years later and it does happen. Make sure you fully understand those deductions.

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Laffy Daffy
January 23, 2009 3:02 PM
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Well, for about 90% of the population it's not necessary to have someone do your taxes. H&R Block and those other companies charge WAYYYY too much for what you get.

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lars2112
January 23, 2009 3:39 PM
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@Party Boy: They do seasonal hiring, so last week in december they start posting ads looking for people they can train to do taxes. Most of the training is on how to input the W-2 into their systems and enusre they ask all the questions. Some of these poeple have been doing taxes for years and are really good but you do find a lot of others who only know data entry but received \"training\".

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Aladdyn
January 23, 2009 4:12 PM
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@Party Boy: yes. Whatever you do, DO NOT go to H&R to get your taxes done. Total rip-off. They are like the best buy of tax returns, or maybe Sears. I used them once and paid more for their services in that year than I have spent on the CPA I use now in the past 5 years.

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Xerloq
January 23, 2009 4:45 PM
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@Aladdyn: Hey! H&R Block sets up a booth inside the Sears here!

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dadelus
January 23, 2009 3:37 PM
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@Party Boy: Tell me about it, the last time I went to H&R Block I ended up walking their employee through their own software because they couldn't figure it out. You would figure that would have qualified me for some sort of discount, but their on duty manager didn't agree. I haven't gone back since.

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picardia
January 23, 2009 3:02 PM
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There are logical reasons for me to use a professional -- I have a lot of freelance income from multiple sources, etc. -- but honestly, the main reason I do it is that the process sets off major panic attacks for me. I have no idea why, but I would rather give a speech before a crowd of 1 million and then leap out of a plane with an untested parachute than face down tax day. But I can get it together enough to get my stuff to the professional, and then he does the scary scary tax form while I breathe into a paper bag. (Not literally, so far, but you never know.) On the one hand I am embarrassed by this, but on the other, I've never been unhappy with the preparer's efforts.

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Eyebrows McGee (now with more baby!)
January 23, 2009 4:31 PM
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@picardia: I don't think you should be embarrassed either! You've found something that totally stresses you out and instead of avoiding it until you're in a catastrophe, you've found a way to deal with it that gets it done right and on time. That's a win! Plenty of people would just ignore it until it came to bite them in the ass.

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kimsama
January 23, 2009 3:21 PM
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@picardia: Haha! I totally have panic attacks for weird things, too. No need to be embarrassed by it -- it's totally worth the money if it means you're paying for your peace of mind and your physical/mental health.

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moore850
January 23, 2009 3:07 PM
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I like taxcut, it's a good balance of help vs. do-it-yourself, with plenty of catches to make sure you haven't done something stupid before you send in the forms.

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Chowday
January 23, 2009 3:09 PM
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I've been thinking about it going in to HR Block or someone, but how much do they charge? Is it pretty standard across the board?

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JiminyChristmas
January 23, 2009 4:54 PM
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@Chowday: See some of the comments above about H&R Block: many of their employees are minimally trained seasonal staff. They won't necessarily do a better job than you would do on your own with tax-prep software.

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RandomHookup
January 23, 2009 3:10 PM
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I wish I could still do my own income taxes, but once I bought a home that is also rental property and ended up with stock options and lots of complicated financial investments, it was beyond my patience and ability. The local CPA I use gives me a federal return that's about 50 pages thick (though if he used the actual forms instead of computer-generated, he could cut it down by half).


I'm amazed by the people who can't handle a simple 1040-EZ. We started doing tax returns in high school in civics class.

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dadelus
January 23, 2009 3:41 PM
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@RandomHookup: My wife started her own business a couple years ago and since then we have used a local CPA firm.


That changed this year after my wife sent them an email with three questions and got a response from them in less then half an hour. Three days later we got an invoice for $50 explaining that it was for answering her email. Considering what they already charge us to do our taxes you would figure taking ten minutes to answer one email would be included.

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JiminyChristmas
January 23, 2009 5:43 PM
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@dadelus: Why exactly do you feel entitled to free professional services? Tax preparation would be one service. Answering separate tax or accounting questions would be another. Charging for their time and expertise is how they make their living. Unless you are paying them a retainer I would expect to get billed for any substantive call or email that takes more than 5 minutes.


From your comment it's not clear whether they worked on your matter for 10 minutes or 30. Split the difference and $50 for 20 minutes of CPA time sounds reasonable. That would only buy you about 15 minutes with a good tax attorney.

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dadelus
January 23, 2009 6:18 PM
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@JiminyChristmas: See my below comment. I don't feel entitled to anything. Take a deep breath and try to calm down.

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Coles_Law
January 23, 2009 5:39 PM
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@dadelus: Well, it's just like consulting with a laywer-you pay for their time. However, there should have been some sort of warning on their website that they charge for that kind of thing.

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dadelus
January 23, 2009 5:54 PM
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@Coles_Law: I can understand paying for their time but again considering the response came in less then half an hour that means that it took less then 30 minutes for:


1: My wife to hit send
2: The email to pass through the internets into the CPAs inbox
3: The CPA to read/respond (the only time that should be billable)
4: The email to pass through the internets back to my wife


So my best guess is it took the CPA at most 10-20 minutes to respond and then charge us $50. At that rate they should be charging between $150-$300/hour. Which is not how much they charge to actually do our taxes.


I'm not griping just because I was charged. I'm griping because of the amount and the lack of prior warning. I should have stated previously that this is the third year we have used them and this was the first instance that they have charged us to answer a question over email. So it appears to be a new policy that they have neglected to communicate to their clients.

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freelunch
January 23, 2009 9:36 PM
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@dadelus: your guess on their hourly rate is about right... I work a different area of accounting (not taxes), and my hourly rate is a little over $350/hr.

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HarcourtArmstrong
January 23, 2009 3:14 PM
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It's all about Publication 17http://www.irs.gov/pub/irs-pdf/p17.pdf

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Wes_Sabi
January 23, 2009 3:14 PM
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Seems like 50% of the people here don't care about Intuit's non-customer-friendly business model.

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Veeber
January 23, 2009 10:03 PM
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@Wes_Sabi: But if you only have one federal and one state is it that big of a problem? Sure I don't like the price hike, but it's still a whole lot cheaper than getting someone else to prepare it for you.

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madanthony
January 23, 2009 3:49 PM
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@Wes_Sabi:

After complaints, Intuit changed their policies to allow you to do multiple returns with one copy of TurboTax.

I've used their product in the past, and I've been happy with it. And I only need to do one tax return anyway. So I'm not switching.

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cc82
January 23, 2009 3:15 PM
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I usually do my own... we rent, our deductions are never higher than the standard, the only real extra I need to file is the Lifetime Learning Credit for my wifes tuition plus a couple of minor interest adjustments. Doesn't take very long. Sometimes I'll use Turbotax just to check my calculations, but file it myself.

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Robert Jason Cervantes
January 23, 2009 3:15 PM
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I have been doing my taxes for last two years. But I want to know if it's smart to hire someone to do it for me. I live in NJ, but work in NY so i have the whole issue of paying NY and NJ income taxes. Anyone here have this same situation and what would you recommend?

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Eyebrows McGee (now with more baby!)
January 23, 2009 4:36 PM
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@Robert Jason Cervantes: I did this when I lived in Illinois and all my income was in Indiana. It was tedious and I had to spend some quality time with the instructions for the state forms the first time, but it wasn't *HARD*. (Actually, the hardest thing was figuring out what the form I needed was CALLED!)

One year I DID make a mistake, and THAT was a PITA because I had to file the error-correcting forms in both states and it was stressful and confusing. If I did that again and made a mistake, I'd probably take my mistake to a CPA and have him help me straighten it out, if only because the stress was making me make errors.

But it wasn't difficult and I'd definitely do the filing myself by hand again. And with the NY/NJ thing, there's going to be plenty of resources since thousands of people make your commute, like there was for me with IL/IN.

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Dan Grossberg
January 23, 2009 3:36 PM
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@Robert Jason Cervantes: thats the same situation i had/have, which is why i went to a pro. I would recommend going to a real CPA as opposed to H&R Block. In my opinion, its worth the $.

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ekthesy
January 23, 2009 3:35 PM
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@Robert Jason Cervantes:

I was in the same situation (and actually worked for three months in Vermont as well as a bonus tax treat) and found that if your tax situation is simple and you keep your W2s organized, doing two sets of state returns isn't much harder than doing one. Just a bit more time.

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kimsama
January 23, 2009 3:15 PM
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Damn, 62%?!

I used to do my taxes myself, until my side business started becoming more successful and complex. Since I also have a full-time job and time is at a premium (and because I'm not as comfortable with things liked depreciation, etc), I now have an accountant file my taxes. I do, however, go through them myself before they're filed, so I have a final chance to catch things. I'd love to save the money I spend on her, but spending that money is actually a big relief, all things considered.

I'd do them myself if my situation changed and my income stream was more simple, but for some of us, it does make a lot of sense.

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LeahReindeer
January 23, 2009 3:18 PM
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I like TaxAct and will be using it again this year. I also use TurboTax to compare the results and make sure they match. That and a final check with pencil and paper ought to cover it. Anything to avoid filing a 1040X ever again. Ugh.

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nybiker
January 23, 2009 8:19 PM
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@LeahReindeer: I also like TaxAct. So long as they don't get greedy, I'll use them. Since I live in NYC, I get the joy of filling out the New York State form, so it helps using the TaxAct Bundle (12.95 since I signed up by year-end, otherwise I believe it's 16.95 for the bundle). I have a relatively simple return, but it's good to have them do the grunt work.

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yagisencho
January 23, 2009 8:16 PM
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@LeahReindeer:
I've been using TaxAct for ten years now...possibly for as long as they've been around. It's cheap, simple, and I'm used to the workflow. It also helps that they import the previous year's file to lower the data input tedium. Now I just have to wait another 3-4 weeks for all the financial institutions to get around to sending my 1099-XXX forms. Grr...

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sirwired
January 23, 2009 6:47 PM
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@LeahReindeer: Ugh! The 1040-X is horrible! (Although my NC State forms are about five times worse.) I will give the IRS credit though; when I filed a 1040-X, the IRS had it processed and cut me a refund check (with interest) in three weeks. It took my state 10 months to do the same thing.

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j-o-h-n
January 23, 2009 6:34 PM
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@LeahReindeer:

I'm also a huge fan of TaxAct - we have used it for several years now.

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Etoiles
January 23, 2009 3:21 PM
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I can do my own federal taxes but New York State tax forms are INSANE and the New York City resident taxes also mane no sense whatsoever.

Add to that that this year I lived in two states (Virginia and New York) and worked in Maryland while living in Virginia, and I think it's worth the money suck to have someone else do the state returns.

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Anonymous
January 23, 2009 3:22 PM
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I've always been a big supporter of getting your taxes done by a professional. There are so many intricate tax laws that it is near impossible to make sure you maximize your return unless you make it your living. Also, there is a lot to be said for sititng in front of a professional and having them look at your financial situation. Not only will they know what questions to ask you, but they will also be able to give good advice. Plus, most tax accountants will help you through any audit process, if you are so unlucky.

The most important thing is to find someone who you trust. Also, you don't want a preparer who charges a percentage of your return- they might be more tempted to add in 'bogus' deductions in order to raise their fee. Your best bet is to get a word-of-mouth reccomended accountant who charges a flat fee and will back you up on any audit processes.


Whenever you have your taxes prepared, they look at all aspects of your financials. They will know how much you are paying in interest on your mortgage, student loans, etc. They know what you are invested in and what kind of return you are getting. If you are not too saavy in this area, they will be able to point out any red flags. If you're paying too high a percentage on your home, they can let you know that. Also- they do hundreds of returns, so they have a good idea of what is \"normal\". It is a great way to get a grasp on how your financial situation compares to others in your area / profession.

I've been going to the same preparer that my family has been using for the past 30 years. It is nice to form a good relationship, as I always have a contact whenever I have any business question in general. Not just during tax-time.

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ExtraCelestial
January 23, 2009 3:24 PM
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I'd use Turbo Tax but I have no idea how to claim myself as a student. You can claim the money you paid towards school, but no matter how many different ways I try it I can't find full-time student status. For now I just have to get in good with my accountant friends.

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Squot
January 23, 2009 5:50 PM
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@TinkishDelight officially OVER the dc tourist infestation: You have to file with your 1098-T. That lets you input your status and how much you spent on tuition. :D

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tbbx
January 23, 2009 9:50 PM
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@Squot: Watch out for 1098-T forms. They are notoriously inaccurate. Schools sometimes include the school year expenses instead of the tax year expenses.

Also, books are almost always not included as qualifying expenses.

There are 3 ways to take education expenses. Two are non-refundable credits (Hope Credit/Lifetime Learning Credit); You can also take an Adjustment to Income. To find out which is best for you, you should compare your federal + state refund amounts. The adjustment to income will affect your state taxes. It's very hard to know in advance which will provide the best result for you.

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kissinggames
January 23, 2009 3:24 PM
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I'm volunteering for DC's EITC tax prep campaign, and they have us using the TaxWise software. It seems pretty decent, but then again I have no experience with any of the other tax programs.

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k6richar
January 23, 2009 3:25 PM
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I am in a common law marriage (In Canada that is identical to married) i am a university student, she is receiving disability payments. You can bet an accountant is worth it. As a bonus, he made an error on last years forms, he fixed it (for free of course) and we are both getting a larger refund.

I am sure the small amount he costs is more then payed for by the extra refund he finds

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theblackdog
January 23, 2009 3:26 PM
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I'm using TaxAct online to do my taxes as usual because mine are pretty straightforward with 1 W-2, a 1099-INT and my student loan interest.

I figure that when I buy a house that's when I'll use a pro to help me figure it out because that's when things get more complex.

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Wild Monkey
January 23, 2009 3:33 PM
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I've been doing my own since college. Pretty easy even with the new house. Then again I use UltraTax. It doesn't allow for a lot of the screw ups that TurboTax and TaxCut let slip by.

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Jevia
January 23, 2009 3:36 PM
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Did taxes myself for years, except for one year when due to my ex-husband's business we hired an accountant. He taught me a lot of the little 'secrets' of tax returns, so after the divorce, I went back to doing my own.


Just last year tried TurboTax (thanks Costco coupon), which was pretty easy. I think for most people with a employee-type job, even a homeowner, self or computer software works fine. Certainly if I had more complex issues, like multiple source income, capital gains/losses, rental income/expenses, I'd use an accountant again. I'll be using Turbo tax again this year.

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Rectilinear Propagation
January 23, 2009 3:37 PM
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I want to know where the 62% figure came from. I would think that too many people wouldn't be able to afford it (or at least think they couldn't afford it) for the percentage to be that high.

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Etoiles
January 23, 2009 5:06 PM
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@Rectilinear Propagation: Define \"professionals.\" The scamtastic unethical Jackson Hewitt offices that line the streets of immigrant and non-white neighborhoods around this time of year count, after all. And when I lived in Washington Heights (NYC) they had pretty significant crowds in there by March.

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dmuth
January 23, 2009 3:39 PM
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I am fortunate that where I work, my employer brings in an outside accountant for a few days during tax season and makes his services available to any employee at a substantial discount.

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Scoobatz
January 23, 2009 3:48 PM
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My wife is a CPA and does taxes for high net worth individuals ($10-200MM). For one individual, his federal tax return last year was over 2000 pages. And, guess what, she uses a software program to do all the work.


There is absolutely no reason you don't do your own taxes. When you pay a professional, they're really not doing anything you can't do yourself. Granted, the tax codes (and the entire process system for that matter) is highly complicated, but a good tax software program takes care of everything for you.

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MameDennis
January 23, 2009 3:48 PM
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I'm still doing my taxes myself, with no software--I just have one W2 and some interest to report on my savings account. I can usually do my state, local, and city returns in about an hour.


With a house and marriage about to complicate my finances, I fully expect to hire a CPA next year.

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Magspie
January 23, 2009 3:51 PM
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I love doing my own taxes! I'm a stay at home mom with a math degree and it's nice to have a chance to use my brain a little.

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TheWillow
January 23, 2009 3:53 PM
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My mom does my taxes. And my brother's. And everyone else in the family's.

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Areia
January 23, 2009 4:04 PM
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I've done our taxes by hand ever since we moved to the US three years ago. The first year we had 4 different income sources from two different countries, thrown in with variety of residence statues. TurboTax choked before we got halfway down the return, so I turned to pencil and paper. It took a few weeks of research, but not only did I get every cent of tax we'd paid refunded, I got the IRS to admit the tax code contradicted itself.

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humphrmi
January 23, 2009 4:07 PM
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You have potential exposure to the alternative minimum tax.

Actually, TurboTax handles this pretty well.

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docrice
January 23, 2009 4:10 PM
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I went to H&R block last year and will this year as well, as our situation isn't as cut and dry as when I was in college - but this may be the last year. I need to learn all the details about the homeowner deductions, etc. It's expensive, but they know more about taxes than I do and find more deductions, and have their guarantee to protect you in the case of an audit.


All of that said, can you imagine what the founders of this country would say if they knew that over half of the people that live here are so confused by our tax system that they have to pay a professional to handle it for them?

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WocitJC
January 23, 2009 4:31 PM
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ha ha ha - who pays taxes anymore?

Seriously...who pays taxes? Why? The gov'ment will just take your taxes and give them to the robber barons that run the banks that loan the money back to you. Just keep your dough and cut out the gov'ment and banksters.

And if you think this is a new idea (not paying taxes) - well, you're out of touch with reality. Just the other day I read that the city I live in has reported decreased tax revenues of 24k...plus any major news site worth their snuff will tell you that tax revolt is the new big thing for 2009 (read up on the tax revolts from our last Great Depression.)

And if you think \"but they'll catch me\" - uh, sure. Just like they caught the billionaires hiding money in UBS's vault over in Switzerland. They have nowhere near the amount of IRS agents needed to deal with all the tax \"cheats\", \"frauds\" and other such names for people who are sick and tired of throwing their money to someone just because they say so.

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humphrmi
January 23, 2009 5:14 PM
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@WocitJC: Besides the rest of your post being complete nonsense, I must clarify the following:

Just the other day I read that the city I live in has reported decreased tax revenues of 24k

Uh, earth to tin-foil-hat guy: decreased tax revenues != (that's NOT EQUAL) more tax cheats, tax revenues are going down because real estate values and retail sales are going down.

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WocitJC
January 23, 2009 6:45 PM
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@humphrmi:
Thanks for the clarification on != (not needed, since I'm a computer programmer, but nice for others)

However, the point I was trying to make is that tax revenues are going down across the country - nearly every city, state and county is dealing with the issue. As for it not being due to tax cheats, more and more people are asking what their taxes are paying for. Biggest story recently was about the two highest tax states (California and New York) losing residents because they're tired of paying the high taxes. People are cheating the tax man - whether by legal or illegal means, and the post about my town is just one example of many. I know many people who no longer pay sales tax and who are taking a stand and not filing a tax return this year.

As for the rest of my post - did you do any checking into tax revolts during the Great Depression? Obviously not, since they are well documented and struck much fear into the hearts of government officials.

The other two topics in my post that I touched on were UBS & tax frauds (which is highly publicized in many newspapers and is causing UBS to close down all those accounts, in addition to an arrest warrant being issued for a highly-placed UBS exec) and the amount of IRS agents (I don't know if you read any news on the internet, but another big story is how much companies routinely pay in taxes - not as much as they're supposed to - and how few the percentage is of people who are audited every year. I spoke to a friend recently who admitted to falsifying his tax return because he was 1099'd instead of W-2'd and he forgot to set aside money for taxes. He did it for YEARS - YEARS - and never once got caught.) - so, yeah, not complete nonsense.

I don't know who gives out the stars for star commenters, but they need to \"divest\" you of yours.

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chauncy that billups
January 23, 2009 4:36 PM
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I have the best of both worlds - my wife does the taxes! She took a course from H&R block and so knows enough to get us by.

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OldElvis
January 23, 2009 4:40 PM
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Used to be Turbotax user, but their SW will only allow 1 return to be filed, and it's 9.95 for each additional one now. This will likely be as disaterous for them as the Digital Rights management was a few years ago.

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eric4ok
January 23, 2009 4:42 PM
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Isn't there something wrong with a tax system that requires you to use a computer to figure out what you owe?

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bohemian
January 23, 2009 4:59 PM
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Just my word of warning. Turbo Tax incorrectly applied some taxable income into the wrong line that ended up really costing me. I did try to get an answer before doing my taxes out of the IRS website with no luck. I incorrectly assumed that Turbo Tax would force it into the right category.

I will either do it by hand or hire a tax attorney.

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aliasmisskat
January 23, 2009 5:02 PM
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Every year, I do my taxes on H&R Block's website, and then, if the refund is going to be at least over $1000, I go into the office to my lovely tax preparer, and have her look back over it. Every year, she has found at least enough to off-set the cost of filing through them. She knows once I no longer qualify for EIC (next year I get married, and we will make too much combined), I will probably start doing them on my own, so she makes sure to explain everything to me, points out deductions I should take (medical means keeping bills, and I'm not so organized), and this year practically wrote a book of tips and reminders for next years taxes. The service I have gotten is well worth what I pay for it.

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Plates
January 23, 2009 5:04 PM
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A flat tax would be much easier. It is hard to figure out all these forms and such. Plus there is a massive bureaucracy supporting it with lots of employees and their government pensions.

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Underpants Gnome
January 23, 2009 5:07 PM
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Was Tax Cat a wholly owned subsidiary of Gawker media? Is that his cousin, Tariff Feline?

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nicemarmot617
January 23, 2009 5:10 PM
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I do my own for now, but after I get married I will be going with my fiance's accountant. His finances are ridiculously complicated. Mine on the other hand are rather simple.

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ajlei
January 23, 2009 5:27 PM
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I enjoy doing it by hand, but each year it seems like there are one or two more things cropping up that might cause difficulty, so I think I'll pass it on to my mom. That is, whenever I get my W-2, I don't understand why my work is waiting until the very last minute to give it to me...

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chris_d
January 23, 2009 5:28 PM
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I'm doing it one way that I couldn't vote. I'm planning on using a free file e-file program for federal, and then doing pencil and paper for state (the state is easier where I live, so pencil and paper isn't too bad; plus, most of those free ones then go and charge an assload for doing your state taxes).

Also, when you try to do the free file thing, they always go and try to get you to select their pay service. They intentionally confuse you so that you'll end up having to pay, and you don't realize it until you've put all your info in. Turbotax tried to do that to me once. I was pissed, but I wasn't going to give them money for trying to trick me, so I went back and started over and got the free filing. Really pissed me off though. Also, I used Taxcut one year, and I think it's better about deductions and clearer on explaining things in the help section than turbotax.

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darkryd
January 23, 2009 5:30 PM
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The last 3 years that I had H&R Block do my taxes, any refund I got immediately went back into Block's pocket for their \"services\".

All they did was enter numbers on a form.

Turbotax is my new best friend.

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mcrbpc
January 23, 2009 6:24 PM
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I am a CPA and I do not do my own.


Then again, I don't work in tax accounting and only know enough about tax to pass the CPA exam (which is a surprisingly small percentage of the exam).

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Rachael Arnold
January 23, 2009 6:49 PM
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I've always done TurboTax online, which has always been free because I was a low-paid college student (and now a low-paid professional).

The thing that bothers me though, is that if you go to TurboTax via the irs.gov site (the **Freedom** Edition I believe?), even state filing is free (well, for certain states), however if you go straight to Turbo Tax and use their Free Edition, you have to pay for all states. Sounds like a ripoff to me. I was quite happy to find the difference last year, when I filed three states (home, college, internship).

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Captain Packrat
January 23, 2009 8:08 PM
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I've been doing my own taxes since I was 12. It was just the 1040EZ back then; now I have to fill out schedules for business, self-employment and capital gains taxes and I have to use the long 1040 form, but I still do them myself. It usually takes me about an hour.

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kwsventures
January 23, 2009 9:31 PM
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Always done them \"old school\". I have had reasons 1 to 4 often. So what. Not hard to do taxes. But, the tax preparing profession would like you to believe you are not smart enough to do it yourself. The secret is to read the tax booklet line for line for each 1040 entry. Still not sure you are good enough? Okay. Do your taxes yourself. Then pay for a so-called tax pro to do them, too. See if there is a difference. If there is, see why. Learn.

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tbbx
January 23, 2009 9:46 PM
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If your income is under $42,000 (may be less if you are single), you qualify for free tax prep at VITA (Volunteer Income Tax Assistance) sites all over the country.

Find more at the IRS site:
[preview.tinyurl.com]

To locate the nearest VITA site, call 1-800-829-1040

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tbbx
January 23, 2009 9:53 PM
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Any District of Columbia filers out there?

DC has a special filing status for people who file Married Filing Jointly on their federal return. It's called \"Married Filing Separately on same return\". Few know about it. It's a strange thing that no other state does. It might save you a lot of money.

DC also has a property tax credit even for renters (household income under $20k)

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Tallanvor
January 23, 2009 10:27 PM
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Depending on your situation, taxes can be difficult, but for the most part, as long as you are careful, it's not so bad. I've never paid to have my taxes done - I figure if my father was able to manage to file my family's taxes when I was growing up, I can do it myself.

I live overseas as well, and the truth is it's not difficult to note my FEI, deductions for living in an expensive city, and foreign taxes paid. --Hell, I was even able to get $10,000 back last year due to my situation (paid from the States but living in Europe).

Obviously everyone has to decide for themselves what they should do, but I don't consider my taxes to be complicated enough to need to pay someone to do them.

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H3ion
January 23, 2009 11:21 PM
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I've been using TurboTax for over ten years. The program is pretty decent but I always hand check the printed return to see if everything looks right. I have a W-2 job, a side business (Form 1040C), capital gains and losses (mostly losses of late) and a half-dozen K-1 forms from partnership investments. One nice feature is the ability to carryover information from one year to the next, such as capital loss deductions and accumulated partnership deductions. They charge extra for states and I need three states (I do my children's taxes as well) and that isn't cheap, but it's a lot cheaper than paying an accountant. Some accountants are very good and will find deductions you may have missed. Some are the equivalent of H&R Block which probably isn't worth the money.

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Anonymous
January 24, 2009 6:18 AM
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I have fairly complex taxes for this past year: Part of the year I had unemployment, part of the year I was self-employed, another part of the year I was both salaried AND self-employed. I also did an IRA conversion. But I'm doing my taxes by hand old-school. Just waiting on all the forms I need to come in.

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HiEllie
January 24, 2009 1:08 PM
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I tried using FreeFile, but it kept telling me I missed a field, but there were no empty fields. I tried it twice, and even had someone else look it over. Tried turbo tax free edition... no problems whatsoever! thanks, turbotax, for not screwing me over (this time)

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Anonymous
January 24, 2009 6:11 PM
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Thanks to tax software my taxes have been done for a week now and my check is already on it's way. I'll never go back to sitting in H&R Blocks office for 6 hours to do what took me about 45 minutes to accomplish.

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Kounji
January 25, 2009 11:13 AM
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Like any do it yourself project. You should take a look at your situation and decide what works best for you. If for instance you are someone who is busy who has a lot of different transactions that you produce during the year, perhaps you own asmall business or are a an executive, you should have a cpa do your taxes for you. If you are an individual who only has a 401 k an ira and a mutual fund and savings accounts you can easily do your taxes on your own or use a program like turbo tax.


In my situation, I worked part time during most of the year and have very little money so I can do 1040 ez and get through with my taxes within a half hour, but since I want to retrieve my money fast I will most likely e-file. I also live in californa, and as many people know californians will not be receiving their tax refunds in a timely fashion this year. So in that case I will certainly be filing those through snail mail.


Do what works for you.

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alterboy
January 26, 2009 11:01 PM
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I took my taxes to an accountant for the first time last year and I couldn't recommend it more. First off I'm married and my wife is a contract worker and I'm not. (in california you cannot file separately and she is considered to own a business. He saved us about $1500 over what I could've done with turbo tax. Second, being in the entertainment industry there are a lot of things that I could write off, even though I am salaried, that turbo tax doesn't even give me the option to do. Well worth the $80 I spent!

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