Anybody else do their own taxes?

freedom_in_4low

freedom_in_4low

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I used turbotax for a long time but last year I must have checked a box wrong and couldn't undo it and it was wanting to penalize me for my wife not having health coverage all year even though she was under my family plan. Things were pretty simple and I did them by hand. Working on doing the same this year, but holy crap I'm gonna have a ream of paper to mail in. In 2021 we sold a house (Schedule D), I made HSA contributions outside of the payroll deduction (Form 8889 and Schedule 1), my wife went back to school (Form 8863) which allowed us to take a childcare expense credit (Form 2441 and Schedule 3), then the changes and advance payments to the child tax credit required me to fill out Schedule 8812.

Since we only owned a house for 5 months, I'm right at the line on itemizing deductions and I'm gonna lose it if I have to fill out one more form, so I'm gonna take the standard.

I haven't even started on state, which is gonna be another pain because I have to file as a partial resident in 2 different states but only had one job, so I only have 1 W2 and have to split income between the two that wasn't consistent throughout the year. Oklahoma just taxes on a prorated annual basis but Colorado asks for the exact amount that was earned there so I get to do a bunch of math from my pay stubs to figure out what my actual taxable income was through the middle of June...and the W2 lists OK as the state which means I don't show any withholding for CO and may have an underpayment penalty (haven't figured that out yet).

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There's no reason this shit should be this complicated. I make good money, but it's a drop in the bucket to the US Government. I would argue that payroll shouldn't even be considered income. We should go to a capital gains only system of taxation so the hedge fund guys can chip in some of the billions they get for doing nothing other than manipulating the economy and skirting the rules.
 
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We have a fiduciary/financial advisor that does out taxes... money well spent IMO as it is just awful to do on your own once you start adding in all the schedules.

That said, the tax softwares CAN be accurate. As a matter of fact, Larry (our advisor) did a complementary "tax audit" of our previous 5 years of returns when we first hired him and he found only a whopping $60 difference (over the full 5 years, of which were only due to a typo I made on a single return).
 
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pc1p said:
That said, the tax softwares CAN be accurate. As a matter of fact, Larry (our advisor) did a complementary "tax audit" of our previous 5 years of returns when we first hired him and he found only a whopping $60 difference (over the full 5 years, of which were only due to a typo I made on a single return).
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my experience has been the same, until last year. I don't know what happened in turbotax but it's doing the same thing this year and I can't figure out how to undo it.

I need to talk to a tax pro anyway, so I may just let them do the work. We owned the house less than 2 years and made a considerable amount on it so the normal exclusion criteria doesn't apply, but the fact that we moved not to make a profit but to make work travel to my remote job more convenient (600 miles closer) may allow a partial exclusion, and moving because our marriage wasn't going to make it much longer without having some family support nearby might qualify as "unforeseen circumstances"... being unforeseen is demonstrable because no one with a lick of sense would have blown $8k on a refi 4 months before putting the house on the market. I just want a pro to tell me I'm on the right track so I don't under pay, then get audited and hit with an unexpected $20k capital gains tax bill after I've spent the cash on the house we're building.
 
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Luckily my accountant that I use for my business includes my return for free. He has a bunch of former IRS guys as clients and know what buttons to push and how far. The first thing he said to 20+ years ago is "if you ever get audited, stay out of the room and let me handle it". Even last year I finally had to relinquish my kids (age 20 and 22) returns to him as it got so f-in complicated.
 
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freedom_in_4low said:
Working on doing the same this year, but holy crap I'm gonna have a ream of paper to mail in.
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No need to use paper unless you prefer that.

I've gone from doing them by hand back in the day, to switching to Free Fillable Forms for a few years and then Turbo Tax for the last few years. I'm going to switch back to doing FFF this year. If you already know what you're doing (which forms, etc), it's free to file electronically. You enter the data into digital forms in the website and then submit.

https://www.irs.gov/e-file-providers/free-file-fillable-forms
 
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RMETeeJay said:
No need to use paper unless you prefer that.

I've gone from doing them by hand back in the day, to switching to Free Fillable Forms for a few years and then Turbo Tax for the last few years. I'm going to switch back to doing FFF this year. If you already know what you're doing (which forms, etc), it's free to file electronically. You enter the data into digital forms in the website and then submit.

https://www.irs.gov/e-file-providers/free-file-fillable-forms
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I'm certainly not completing them on paper, I'm using the electronic fillable forms and was imagining myself printing them off when I'm done. Hadn't gotten far enough to look into how to submit them yet but electronic is nice.

I owed last year and mailed it in with a check. I think they haven't even processed my 2020 return because I got a notification in the mail saying I had a credit (matching the amount of the check I wrote), and to re-submit my filing if I'd already filed. I then went to the link provided on the letter which then told me NOT to refile.
 
I have found that TurboTax is much better if you purchase and download the program. The web based software is to limited on the available forms and really only works well for simple taxes. Last year my wife and I had 2 jobs in two different states with 3 HSA accounts that I funded outside of payroll to ensure the full deduction. Along with several interest accounts and a few other uncommon situations. I completed Federal and both states in a couple of hours. Now I am just waiting for Oregon to release a final form and I will be able to file. I can't imagine how long it would have taken if I had tried doing the by hand. $39.99 was well worth it.
 
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WestCoastDan said:
A man that does his own taxes is either an accountant, a fool, or a defendant in an audit.
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Is that printed on the back of your accountants business card?

The tax accounting industry is incentivized for us to believe that so they stay in business, and Congress and the IRS are incentivized to have us believe that because we're easier to manipulate when we're ignorant of the details. That ignorance is what allowed congressional democrats and the media to make most of the country believe that the 2018 Tax Cuts and Jobs act didn't lower their taxes, and when they roll them back, those same people will probably believe that their taxes are going down instead of up.

If you're motivated, good with numbers, detail oriented, and inclined to read the instructions it's not that hard to get it right. If it's right, the audit risk is low, and if you keep your documentation and aren't trying to bend the rules or use loopholes reserved for the ultra wealthy, then you won't have a mountain of paperwork to produce if they do ask for it. Every year I used Turbotax I reviewed, in detail, the forms and schedules it produced, so I understand how it works. I have a spreadsheet that I can populate from my pay stubs and predict in January within $100 what my tax owed or refund will be at the end of that year.

Obviously everyone's threshold for complexity is different and there are those that really shouldn't do it themselves beyond the 1040EZ which is gone now. I suppose if I was regularly trading stocks and bought and sold rental property in addition to what I'm dealing with this year, I'd for sure reach that threshold since I'm considering myself on it already with what I have.
 
I used TurboTax for a number of years. I cant remember what happened but there was a year where I apparently owed $5k. It flustered me so I never finalized it, took my shit to an accountant and said "make this better". I ended up only owing $1k, and have been taking my taxes to him since. I'll gladly pay someone a $100-200 bucks to insure that everything is submitted and filed correctly.
 
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qslim said:
I'd gladly pay an accountant the same amount I owe in taxes if he could legally get it to zero. I'd rather have it go to him than the feds.
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That's why I make a donation to our local zoo. If you donate enough they give you a season family pass too. The donation is deducted from my state taxes and feeds the animals I like.
 
I use freetaxusa.com for the past few years. It's very easy and user friendly. Free federal just pay state I believe. It will let you itemize and compare that between the standard deduction. Sometimes you get more overall itemizing since in my state you can't itemize state return unless you itemize federal. Free audit support or something but hopefully that doesn't happen. Been really happy with them though but my taxes aren't super complicated.
 
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My taxes are way to complicated to do it 100% my self (owned a business, got w2 from it, took some capital out, got w2 from two other orgs moving from the subsidiary to the parent org, owned a house, ...) . That and there's a lot of little nuanced credits you may not find unless you're really on it. As one example because I went to college in the Midwest the same year I started my first job I got a some credit for something related to a hazard zone (lots of rain and flooding that year, even though it didn't affect me). I would have never seen that on my own.
 
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I'm a wage slave with no debt. So taxes are repeatable year to year. I know math too.

Back when my wife and I lived in one state and worked in another, we filed federal and two states using paper and the old books. Now the tax software blowes through it and fills in data from last year.

Taxes were way easier under Trump when he pushed through the increase in the standard deduction amount. I almost didn't buy the software last year. I do ours and the kid's.

I need to start a shell corporation and hire a loophole accountant. I always pay at the en of the year. No reason to float tge government an interest free loan.
 
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I just finished mine.... I use TurboTax. I used to use an accountant until I found out most use the "commercial" version of Intuit's products or other similar software.

I have both salary income and consulting income. I file quarterly and have some complication but as with all taxes.... keeping records is the key. It's relatively simple if you do some homework I've found.
 
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