Author Topic: Doing Taxes  (Read 5655 times)

phillystash

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Doing Taxes
« on: February 11, 2015, 06:57:16 PM »
This will be my second year filing a return, last year I used turbo tax. This year I would like to do it myself if possible (seems a valuable life skill). I am very confused although the IRS website is very well organized I feel like I don't understand the forms/instructions very well. Any tips from others who do their own returns?

MrSal

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Re: Doing Taxes
« Reply #1 on: February 11, 2015, 07:13:58 PM »
i moved to the us three months ago... and even though i didnt have income in the us in 2014 id like to do this for my wife..

we have pretty simple returns. Shes a teacher, we own a house and thats it ... if my rought math is correct we should be getting alomost 4k of our tax return.

any guidance would be appreciated in filling and as well techyniques to lower our tax...

MDM

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Re: Doing Taxes
« Reply #2 on: February 11, 2015, 08:00:33 PM »
Back in the olden days when we had to walk uphill to work and uphill back home we read the instructions and filled in the forms.  Might even be possible for you young'uns to do so too. ;)

Also see http://forum.mrmoneymustache.com/ask-a-mustachian/turbo-tax-vs-cpa/ for more nuanced responses.

zolotiyeruki

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Re: Doing Taxes
« Reply #3 on: February 11, 2015, 08:35:31 PM »
I do my own taxes.  I may be a masochist, or just an engineer, but I kinda enjoy the process.

As complicated and obtuse as our tax structure is, the instructions are quite well-written.  Print off a blank 1040 form, pull up the instructions on your computer, and just walk through it line by line. Most things on the form won't apply to you.  It may take you a few hours the first time you do it, but once you've done it once, you'll find it much easier to do it the next time.

N

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Re: Doing Taxes
« Reply #4 on: February 11, 2015, 11:13:37 PM »
https://www.freefilefillableforms.com/#/fd

ive used this for my taxes for this and last year. the instructions and additonal forms are easy to open in a new tab. Each line on the form has a section in the instructions, and often worksheets, as well.  it really walks you thru it. and its free.


Roots&Wings

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Re: Doing Taxes
« Reply #5 on: February 12, 2015, 07:02:14 AM »
https://www.freefilefillableforms.com/#/fd

ive used this for my taxes for this and last year. the instructions and additonal forms are easy to open in a new tab. Each line on the form has a section in the instructions, and often worksheets, as well.  it really walks you thru it. and its free.

+1

I use the IRS e-file website for my taxes (http://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free).  Free fillable forms if income is over $60k, or free file if income is below $60k.

Free fillable forms has all the instructions available online, and walks you through each line pretty simply in my opinion.

Sibley

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Re: Doing Taxes
« Reply #6 on: February 12, 2015, 07:11:56 AM »
I am an accountant, and I used to do taxes for a living. Thus, I know what I'm talking about.

If you feel like you don't understand what you're doing - then you don't. And you can seriously mess it up and cause yourself some big problems. The softwares that are out there, either paid or free, are a great resource and help, so are the instructions. Please, for your own sake, unless you're confident that you have a handle on it, do not try to wing it. Use the software. Hire an accountant. Educate yourself, sure, but if you're not ready then don't try to do it on the paper forms without assistance unless you've got a w-2 and nothing else.

FYI - yes, I can do taxes on the forms themselves, and have in the past. I don't, because I have better things to do with my time. Just because you can do something doesn't make it worthwhile.

a1smith

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Re: Doing Taxes
« Reply #7 on: February 14, 2015, 03:01:04 PM »
I don't think it's worth doing manually when there are so many other ways of filing.  There are various software packages and also online sites.  You can read the help in the software and will learn just as much as filing manually.  You can also use the software and read the IRS instructions at the same time.

Tax software - I use HRBlock software.  I heard that TurboTax made it where you had to use Premium version instead of Deluxe for filing capital gains (investors in stocks, mutual funds).  It seems to have backfired on them and many people migrated to HRBlock.

Tax websites - Here is a good one https://www.taxact.com/index.asp  They have various packages with Fed/State combinations and online/download/CD.

Here is some history on TaxAct http://en.wikipedia.org/wiki/TaxACT
« Last Edit: February 14, 2015, 03:03:56 PM by a1smith »

ender

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Re: Doing Taxes
« Reply #8 on: February 14, 2015, 03:05:39 PM »
This year I basically did mine in Excel and then validated it with TurboTax and submitted it there. I think it was about $60 to e-file both? I could have printed stuff/etc but it was simple and... meh.

I was very close in the numbers, Turbotax had me receiving I think $30 more give or take. I think it's an important skill to understand how taxes work (ie the effect of your income and deductions on your tax burden). I don't think it's as important to understand exactly what forms to fill out how/etc.

Rage

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Re: Doing Taxes
« Reply #9 on: February 15, 2015, 04:03:18 PM »
I am an accountant, and I used to do taxes for a living. Thus, I know what I'm talking about.

If you feel like you don't understand what you're doing - then you don't. And you can seriously mess it up and cause yourself some big problems.

I love how, in this DIY forum, we always get these types of things.  Plumbers who say, "I'm a plumber, so I know what I'm talking about, don't try to do it yourself", Realtors who chime in with "I'm a Realtor, so I know what I'm talking about, don't do it yourself.  Electricians, car mechanics, and on and on and on.  Thank you for taking the time out of your busy expert schedules to come on here and be an asshole.

Well I am NOT an accountant and I've done my own taxes many times.   Google anything you're confused about.  It's not that hard in most cases, and you need to understand it no matter who does your taxes.

xenon5

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Re: Doing Taxes
« Reply #10 on: February 15, 2015, 05:02:25 PM »
With all the software available today and how cheap some of them are, I don't see much benefit in doing taxes myself. 

Turbotax basic was free this year for a simple return and up to 5 state returns.  I had to file for 3 states this year and paid $0.  The free version covered all the special situations I had this year (student loan interest deduction, IRA contributions, and high medical expenses) and if you answer "yes" to something only found on an upgraded version, it'll tell you.

And there are lots of alternatives to turbotax that are cheaper for people with taxable investment income or small business income.  TaxACT is $20 for federal + state, and only $7 per additional state.  I would have gone with TaxACT instead if I had taxable investment income in 2014.

There was one year when I filed state myself.  I indented my numbers to the left by accident instead of the right like they wanted and they sent me back the return 4 months after I finished it to do it over.  Not worth the annoyance of possibly doing something wrong and having to redo it several months later.

Also, many states with income taxes have a free efile option nowadays, which you can read about here:
http://www.mymoneyblog.com/free-online-tax-e-filing-options-for-all-50-states.html
« Last Edit: February 15, 2015, 06:05:27 PM by xenon5 »

PatStab

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Re: Doing Taxes
« Reply #11 on: February 15, 2015, 09:19:54 PM »
I was an accountant in my former life so well I do ours.

However, working overseas we are not allowed to.  Right now I have to get our rental stuff together and drop everything in the tax organizer for hubbys company.  Then they are sent on to the accounting firm they employ to do overseas workers taxes.  I have to have it all in for them by March 1st.  When he retires I will do them again.  Currently they pay for the prep, its something called hypo tax, nothing I've ever done.  He works in various countries so beyond me and I don't intend to learn.

Sibley

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Re: Doing Taxes
« Reply #12 on: February 16, 2015, 02:59:53 PM »
I am an accountant, and I used to do taxes for a living. Thus, I know what I'm talking about.

If you feel like you don't understand what you're doing - then you don't. And you can seriously mess it up and cause yourself some big problems.

I love how, in this DIY forum, we always get these types of things.  Plumbers who say, "I'm a plumber, so I know what I'm talking about, don't try to do it yourself", Realtors who chime in with "I'm a Realtor, so I know what I'm talking about, don't do it yourself.  Electricians, car mechanics, and on and on and on.  Thank you for taking the time out of your busy expert schedules to come on here and be an asshole.

Well I am NOT an accountant and I've done my own taxes many times.   Google anything you're confused about.  It's not that hard in most cases, and you need to understand it no matter who does your taxes.

I completely agree. It's not that hard in most cases. However, the people who read this site are by definition an elite group of people. The average person (not trained to do taxes and not reading financial sites regularly) are terrified of the IRS, taxes, tax forms, etc. Even if you're not scared of the topic, there are times when you really do need professionals to help. You'd go to the doctor for a broken bone, right?

If all you have is a W-2, then sure you can do your own. Interest, dividends, student loan interest, go for it. For educated individuals up to the challenge, go ahead and itemize deductions. But when you're uncomfortable, that's a sign that you need to get some help.

Capital gains/losses, rentals, businesses, K-1s, 1031 exchanges, death, divorce, massive changes in your life - maybe you need to get some help. At least the first year. It's a lot easier to continue something that's stable than figure it out the first time on your own.

For the record, I do my own taxes. I'm encouraging my friends to learn to do theirs, and helping them through the process with the goal that they will be able to do it next year. But there is a point where DIY is not the best idea.

aj_yooper

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Re: Doing Taxes
« Reply #13 on: February 16, 2015, 03:40:19 PM »
The basic paper forms are fairly simple, if you have a simple situation, like w2s and some interest or dividends.  I learned that way as it was before computers,:). 

Now, I use TaxActOnline for free.  Way simpler.  Choose your method and go.  This Forbes' article explains how the income is taxed:  http://www.forbes.com/sites/kellyphillipserb/2013/10/31/irs-announces-2014-tax-brackets-standard-deduction-amounts-and-more/

If you screw up, the IRS will get back to you in a couple of years.  They aren't that bad either, assuming it was an honest error. 

beanlady

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Re: Doing Taxes
« Reply #14 on: February 16, 2015, 03:49:33 PM »
I've been doing my own since I was 16. The instructions really are easy to follow, and if you have something weird, I've found calling the IRS to be surprisingly pleasant and helpful.

merula

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Re: Doing Taxes
« Reply #15 on: February 16, 2015, 03:59:52 PM »
I did my taxes through the Free Fillable Forms this year for the first time. I entered my info into TurboTax (which I had used for years and years previously), and got the same number, so I figured I was good to go.

Total time spent (including TurboTax): about 2 hours.
Total amount saved: $80 (software cost plus state filing fees)

Maybe some of you have jobs that pay $40/hour after tax that you can do for unlimited hours, but I don't. And even if I did, knowing how to actually do your own taxes is a valuable life skill that is bound to come in handy.

Roots&Wings

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Re: Doing Taxes
« Reply #16 on: February 16, 2015, 04:13:07 PM »
I've been doing my own since I was 16. The instructions really are easy to follow, and if you have something weird, I've found calling the IRS to be surprisingly pleasant and helpful.

+1

IRS Helpdesk also responds via email if you're stumped by any online forms functionality.  Last year, I was mystified why I could no longer enter text (for various purchase dates) on Form 8949 supplement to Schedule D like prior years when using free fillable forms, and they responded fairly promptly.
« Last Edit: February 16, 2015, 04:23:29 PM by step-in-time »

Emilyngh

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Re: Doing Taxes
« Reply #17 on: February 16, 2015, 04:24:02 PM »
I recommend doing them by yourself (either paper or fillable) and then using turbotax or similar to double check your work.   Look into any inconsistencies and figure out what went wrong until the two agree.   This is what I do every year.

 While doing it yourself can be daunting, it really will help you understand how it all works, what you have to do (eg., income limits etc) for credit and how to optimize everything.   Once you move past the learning curve of figuring your current sitch out, it'll be much easier to do in the future, and slowly add to your skills as new sitches arise.