Taxes 2018: Going with a CPA or DIY given new standard deductions?

[living_la_vida_mi]

Hi everyone,

I am debating whether to get a CPA or do the taxes myself, hope someone can help me out...

Our tax situation is pretty straight forward: married, 2 kids, some investments (index funds). I understand getting a CPA to find all possible itemized deductions, but this time we do not have enough to itemize, so need to go with the standard deduction. I can to do that with TurboTax.

The only thing is that in the past couple of years we had to always pay about 2k and this year we made no changes to withholding and we are actually getting 8k refund (according to my preliminary calculations based on our W2s)?? Because of that I am inclined to go with a CPA to make sure this calculation is correct, and also to get advice on recalculating our withholding (some refund is good, but this seems excessive).

If anyone has an input on this, will be greatly appreciated.

Thank you!

[CareCPA]

I think you should DIY, it sounds simple enough.

However, I would also suggest digging into that refund a little more. Is there anyone you trust to put a second set of eyes on it? Most people had too little withheld in 2018 compared to prior years, so the fact that your refund spiked so much is concerning.

Definitely fill out a new W-4 for each of you at your jobs.

[MDM]

Our tax situation is pretty straight forward: married, 2 kids, some investments (index funds).

You are unlikely to get a "better" answer from a CPA than DIY for that situation.

You could try a return on one of the commercial tax packages.  They're all similar in functionality, so going by lowest price is a reasonable approach.  You can always read "Turbo Tax vs. H&RBlock", etc., reviews.

If you do that and and get ~the same answer with the 2018 version of the case study spreadsheet and/or www.excel1040.com, chances are that your return will be correct and optimal.

[living_la_vida_mi]

Thank you MDM and CareCPA.

[ender]

Something I did this year was put my info into two systems (Turbotax and Credit Karma).

The numbers for federal were identical so I figured they were correct.

[secondcor521]

With enough persistence, you would probably be able to set your 2017 and 2018 federal returns side by side and walk through them line by line and see why you have a $10K difference.  $2K of it will likely be due to the expanded child tax credit.  Some more may be due to the tax bracket changes themselves.  The rest I imagine is due to changes in your circumstances that you're just not thinking of (or you have a really high income, like $300K).

Changing your withholding is pretty straightforward math.  You want to have $8K less in federal withholding.  Divide that by the number of paychecks, decide how to split it between you and your wife (if you're both earning an income), then go to your HR departments and ask them to help you change your allowances to achieve that reduction.  You may not get it exactly right but you'll get a lot closer.

[MustacheAndaHalf]

With enough persistence, you would probably be able to set your 2017 and 2018 federal returns side by side and walk through them line by line and see why you have a $10K difference.

This is an especially difficult time for someone new to tax forms to try that.  Form 1040 changed so dramatically that you can't compare line by line.  You'd look at the prior year's line 37 "adjusted gross income", and there is no longer a line 37 on the new 1040, and no "adjusted gross income" line on that form.  I would suggest OP don't compare last year to this year's tax forms, as it's a rather tricky place to start.

Here's the 2017 version:
https://www.irs.gov/pub/irs-prior/f1040--2017.pdf

And the new 2018 version:
https://www.irs.gov/pub/irs-pdf/f1040.pdf

[secondcor521]

With enough persistence, you would probably be able to set your 2017 and 2018 federal returns side by side and walk through them line by line and see why you have a $10K difference.

This is an especially difficult time for someone new to tax forms to try that.  Form 1040 changed so dramatically that you can't compare line by line.  You'd look at the prior year's line 37 "adjusted gross income", and there is no longer a line 37 on the new 1040, and no "adjusted gross income" line on that form.  I would suggest OP don't compare last year to this year's tax forms, as it's a rather tricky place to start.

Here's the 2017 version:
https://www.irs.gov/pub/irs-prior/f1040--2017.pdf

And the new 2018 version:
https://www.irs.gov/pub/irs-pdf/f1040.pdf

Yes, I'm well aware that the forms have changed.  And I agree that doing the 2018 to 2017 comparison is harder than the 2017 to 2016 or 2019 to 2018 comparison.

That being said, the underlying logic and tax laws didn't change that much, especially for someone with a reasonably simple tax return, as I believe the OP described.  And the OP did seem to be a little bit interested and motivated to understand the $10K swing in their situation.

I'm imagining that the OP only is filling out a dozen or two dozen lines worth of data on their tax return.  Even if they're on different line numbers or - for example - on Schedule 5 instead of the main 1040 form, with persistence they should be able to figure it out.

The other options are giving up or paying a CPA to explain it to them I guess.