Author Topic: How could anyone ever fill out his own tax return?  (Read 15385 times)

caliq

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Re: How could anyone ever fill out his own tax return?
« Reply #50 on: February 05, 2015, 09:59:41 AM »
Um, you've never looked over a copy of the tax return you've submitted?  When starting to do tax returns on your own, you can use previous years as a guide.  (And aren't you supposed to save copies for forever?)

As I understand it, most individual returns only require a holding period of 3 years, unless you're committing fraud, in which case you may have bigger issues to worry about. From the IRS: http://www.irs.gov/taxtopics/tc305.html
The way I read that, you only have to keep your supporting documentation for three years, but there is no mention of how long you should keep a copy of your actual filed returns. I can't find a reference for that.

Not that it really matters. The point is that if you have filed a tax return, you should actually have a copy you can review, so that you "know what one looks like".

I find it super weird that people don't save a copy of their tax return?  I use TurboTax/H&R Block/TaxAct/whatever is free or cheapest and they always prompt you to at least save a PDF to your computer and/or print out a copy...I've been keeping them since I was 18 (23 now so it's not like I have a giant pile).

Mississippi Mudstache

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Re: How could anyone ever fill out his own tax return?
« Reply #51 on: February 05, 2015, 11:46:18 AM »
I just e-filed my taxes today. Decided to use TaxAct to check my work. I ended up getting the same result on the federal return. I actually caught some errors that I made on the state return - at least I assume that I made errors. I need to double-check the state instructions before I file, because I thought I had followed them accurately the first time around. Makes less than $100 difference anyway, but I want to get it right.

Of course, I plan to use the state-provided paperwork to file, rather than paying an unnecessary $15 to e-file. It was nice to have the option to use the software to double-check my work, though.

bostonjim

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Re: How could anyone ever fill out his own tax return?
« Reply #52 on: February 05, 2015, 01:22:59 PM »
I used to use Turbotax, but for the last few years I've used the IRS's free fillable forms, plus my state's (Massachusetts) great online system.  The FFF is funny - you can tell they made it as user-unfriendly as possible in response to what one assumes is heavy lobbying from the tax prep industry.  It's basically a thin front end that generates the XML the IRS uses for it's online submissions. 

I think it was two years ago that the software was giving me persistent errors on submission and I ended up having to open up an editor and hand-edit the XML...  Like I said, an effective lobby.

austin

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Re: How could anyone ever fill out his own tax return?
« Reply #53 on: February 05, 2015, 01:28:34 PM »
I did mine by hand but then I went and used TurboTax in order to check my work and file it. TuroTax was free for me (active duty military with AGI below $60k) and it directed me to take a survey where I received a free $5 amazon gift card, so I actually got paid to do my taxes.

MonkeyJenga

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Re: How could anyone ever fill out his own tax return?
« Reply #54 on: February 05, 2015, 07:52:16 PM »
Um, you've never looked over a copy of the tax return you've submitted?  When starting to do tax returns on your own, you can use previous years as a guide.  (And aren't you supposed to save copies for forever?)

As I understand it, most individual returns only require a holding period of 3 years, unless you're committing fraud, in which case you may have bigger issues to worry about. From the IRS: http://www.irs.gov/taxtopics/tc305.html
The way I read that, you only have to keep your supporting documentation for three years, but there is no mention of how long you should keep a copy of your actual filed returns. I can't find a reference for that.

Not that it really matters. The point is that if you have filed a tax return, you should actually have a copy you can review, so that you "know what one looks like".

Agreed that people should be aware of what returns look like. I happen to enjoy focusing on nitpicky details, though, and I recently told someone else worried about documentation that there's almost zero chance she'll be audited more than 3 years back. I used to think I had to keep everything forever, and I know that mindset is somewhat common.

Sibley

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Re: How could anyone ever fill out his own tax return?
« Reply #55 on: February 09, 2015, 08:16:54 AM »
I can't quote anything specific here, but I'd recommend to save your tax returns for at least 7 years. I have returns going back 10+ years, and don't plan on ditching any of it. I'd rather have them and not need them, than need them and not have them.

Also, be aware that the IRS' error rate when you paper file is much higher than with e-file. Meaning, make sure you keep a copy of what you filed just in case.

rugorak

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Re: How could anyone ever fill out his own tax return?
« Reply #56 on: February 12, 2015, 01:56:15 PM »
I can't quote anything specific here, but I'd recommend to save your tax returns for at least 7 years. I have returns going back 10+ years, and don't plan on ditching any of it. I'd rather have them and not need them, than need them and not have them.

Also, be aware that the IRS' error rate when you paper file is much higher than with e-file. Meaning, make sure you keep a copy of what you filed just in case.
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-long-should-I-keep-records

Everything else I can find seems to say the same. 7 years is the max you should need your records. The only exception is if you filed a fraudulent claim in which case you need them forever. But I would hope none of us are trying to commit fraud so 7 years should be fine.

chesebert

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Re: How could anyone ever fill out his own tax return?
« Reply #57 on: February 13, 2015, 12:55:38 AM »
For expats, filing out your own tax return is not very practical. My fed returns for each of the last 3 years have all been over 100 pages... state returns are shorter, but still long. If one is a part of a tax equalization program, there is no hope for a non-tax professional to work through the mess.


Paul der Krake

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Re: How could anyone ever fill out his own tax return?
« Reply #58 on: February 13, 2015, 03:23:08 AM »
If people should learn how to fill out tax forms as part of growing up, then it should be taught.  I'm 31 years old.  Of course I can read, add, subtract, multiply and divide.  Therefore I should be able to fill out a tax return, right?  Problem is, I've never SEEN a tax return.  I wouldn't even know where to get one.  These things just aren't being taught.
When would the teaching occur? Taxes change every year, and the vast majority of high school students have no income. I don't think it's too much to ask from a functionning adult to express a little bit of hands-on curiosity in a system that they pay into and vote on.

Parents, teach your young adult children about taxes!

Cpa Cat

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Re: How could anyone ever fill out his own tax return?
« Reply #59 on: February 13, 2015, 08:46:59 AM »
3 years is the regular statute of limitations. 6 years is the statute of limitations for gross misstatement of income. And forever is the statute of limitations for fraud or non-filed returns.

Just a note, though - I have a client who has been through a couple of accountants and I began to suspect that their basis in their S-Corp was not correct. I reconstructed it from their S-election on (9 years) by using the old tax returns/K-1s that they had saved. The basis was, indeed, wrong - and the correction is in their favor.

Sometimes it's difficult to predict what you'll need old tax returns for - so personally, I'd recommend keeping them as long as you have space for them.

teen persuasion

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Re: How could anyone ever fill out his own tax return?
« Reply #60 on: February 13, 2015, 11:04:50 AM »
There is a local tax prep firm that is playing on the "call the expert" mindset in their ads.  Can't fix the car yourself, call the mechanic.  Can't fix the sink, call the plumber.  Kid is sick, call the doctor.  Ooh, my tax forms are here, now I can do my taxes - kid tells him to call EGTax.  That ad drives me crazy.

I started doing my taxes on paper when I was in college.  They were pretty simple, and each year I learned a little bit more as new issues came up (married, kids, bought house, SE income, rental income, etc).  I started using TurboTax just so I could efile, I did the calculations on paper first, to make sure we agreed.  I dislike the Q & A format, since I know what the paper forms expect it is easier to just fill in the sections that apply to me.  I've used the free online version, so don't have the import perks of the paid versions, but I refuse to pay just to efile.

Doing taxes on paper is going to be more difficult this year for those who are not internet connected.  The paper forms which were available in public libraries in the past are NOT being sent out by the IRS this year due to budget cuts.  The only forms available are the 1040, 1040A, 1040EZ.  The IRS says that people can order necessary forms by phone or online, for delivery to their home, but those forms are not available - I ordered forms for myself and as a test, and received a postcard that forms are not available.  You can download and print yourself, but the booklets are up to 150 pages!  So people like my parents who choose to go without a computer and internet, or others who cannot afford them are in a bind.

AllezAllezAllez

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Re: How could anyone ever fill out his own tax return?
« Reply #61 on: February 14, 2015, 07:38:33 PM »
I admit, turbotax has become my default for 1040 filing, though I split the cost of the costco-sourced CD with a few family members so it's really quite inexpensive. In those years when I have a bunch of scattered 1099s from research consults, random paid book reviews, etc., I do find the turbotax hand-holding to be helpful, ensuring I cover all the requisite obligations and available writeoffs.  And 1099s or not, I find that it does save time, which matters for me at this particular time of the year.

The state form I print out and do by hand, though, in part because turbotax-state is so overpriced (come on, it's mostly transferring numbers from the fed. form!); and also, because my state used to have free efiling for everyone, and now they still want everyone to efile but it's only free for low-income filers. This backpedaling is stupid and annoying, and I childishly show my displeasure by mailing in a paper form filled out by hand rather than typing the fillable form. ;)

capital

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Re: How could anyone ever fill out his own tax return?
« Reply #62 on: February 15, 2015, 12:27:51 AM »
A lot of us work in the tech industry, where compensation often includes stock options. And, if things go well, one runs into pretty complicated edge cases with AMT pretty quickly, and an accountant can earn their pay.

For simple earned income, basic tax software like TaxAct does well.

Indexer

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Re: How could anyone ever fill out his own tax return?
« Reply #63 on: February 15, 2015, 07:40:58 PM »
Having tried several of the 'free' programs some had severe errors* which I only caught because I've taken a class on income tax preparation.  Many also weren't free.  They would end up costing $60.

Thankfully someone here pointed me to FreeTaxUSA.  Fed+State cost me $12.99.  It wasn't as easy as TurboTax, but it got the job done.

I can do them myself, but I like being able to file electronically.

*The most common involved my HSA.  I contributed 3205 through my employer, and then I did $95 to finish it off.  One set of software thought the max contribution was 3100(its 3300).  One set wasn't smart enough to realize there were individual contributions and contributions through an employer.  It would only let me do one or the other, but if I tried to do both it kept trying to double the 3205, and say I contributed 6410+95 which is obviously not allowed. 

geekette

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Re: How could anyone ever fill out his own tax return?
« Reply #64 on: February 15, 2015, 09:20:24 PM »
A lot of us work in the tech industry, where compensation often includes stock options. And, if things go well, one runs into pretty complicated edge cases with AMT pretty quickly, and an accountant can earn their pay.

It gets complicated even without AMT.  We got a W-2 for an option sale, but the basis on the 1099 does not include that amount due to changes in accounting laws (at least that's what I understand from my reading).

It took a lot of head scratching and several forms (the W2, the 1099, the advice of sale, and 4 pages of brokerage instructions) to figure out the proper basis, and some restarts on TTax to get it all in the proper places, plus similar fun for the ESPP and RSUs sales that were most of our income this year.  Hopefully it'll be easier next year.

The ACA was a cakewalk!