Author Topic: Doing Your Own Taxes?  (Read 6671 times)

JustTrying

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Doing Your Own Taxes?
« on: September 21, 2014, 04:09:23 PM »
I used to do my taxes on my own (with TurboTax), but then I married a guy who is self-employed. With him being self-employed, I felt it was out of my league to do our taxes myself. However, last year it cost us $800 to have H&R Block do our taxes (of course they don't tell you the price until after they've done all the work).

This year, I'd like to do our taxes myself (with the help of TurboTax or similar software), but I'd like to get more knowledgeable about taxes/tax law, etc in order to feel confident that I'm doing them correctly. I'd love suggestions on books to help me with this. I'm open to other recommendations as well!

(Just to clarify, I'm American).

Thanks!

Oscar_C

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Re: Doing Your Own Taxes?
« Reply #1 on: September 21, 2014, 04:21:27 PM »
I used to do my taxes on my own (with TurboTax), but then I married a guy who is self-employed. With him being self-employed, I felt it was out of my league to do our taxes myself. However, last year it cost us $800 to have H&R Block do our taxes (of course they don't tell you the price until after they've done all the work).

This year, I'd like to do our taxes myself (with the help of TurboTax or similar software), but I'd like to get more knowledgeable about taxes/tax law, etc in order to feel confident that I'm doing them correctly. I'd love suggestions on books to help me with this. I'm open to other recommendations as well!

(Just to clarify, I'm American).

Thanks!

Taxes (under most circumstances) are very easy on a personal level.

He's self employed so you'll need
--Schedule C (to report business income)
--Schedule SE (To find out self-employment tax based on Schecule C)

Instructions are self-explanatory. Meal expenses can only be deducted 50% (spend 100, only record 50 as an expense)

Plug the total of Sch C on line 12
Plug Tax of SE to line 63 of 1040 and deductible amount to line 27

The rest of the process will stay the same.

Speaking from experience as a Tax Preparer and Teacher.

studentdoc2

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Re: Doing Your Own Taxes?
« Reply #2 on: September 21, 2014, 05:24:57 PM »
I have a pretty complicated tax situation -- I'm self-employed, get a W2 for a different job, and have a scholarship above and beyond tuition/books that isn't reported (no tax form) but is still legally income. This year, the situation becomes more complicated with a new spouse, his W2, his self-employment, etc. With all that, I've always used TurboTax and will do so again this year. A little reading, a little research, and it works out. TurboTax guides you through most things nicely, has a pretty good customer support/FAQ, and it's easy enough to track down the law itself if you're confused.

Good luck!

MDM

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Re: Doing Your Own Taxes?
« Reply #3 on: September 21, 2014, 05:47:45 PM »
I used to do my taxes on my own (with TurboTax), but then I married a guy who is self-employed. With him being self-employed, I felt it was out of my league to do our taxes myself. However, last year it cost us $800 to have H&R Block do our taxes (of course they don't tell you the price until after they've done all the work).

This year, I'd like to do our taxes myself (with the help of TurboTax or similar software), but I'd like to get more knowledgeable about taxes/tax law, etc in order to feel confident that I'm doing them correctly. I'd love suggestions on books to help me with this. I'm open to other recommendations as well!
Assumption: H&R Block did your taxes correctly.  Probably a good assumption, but it is not 100% guaranteed.

Now that you have "seen the answer" for 2013 taxes, could you replicate your 2013 return without H&R Block?  In other words, do you understand why all the numbers were entered on all the forms?  One way to test yourself would be to get a 2013 copy of TurboTax (probably available cheaply on Amazon, etc. at this time) and see if you can take your records and come up with the same (or similar enough) return as H&R Block.

If the answers to the above are "yes", then you should be all set for 2014 on your own.  If "no", then you might post specific questions here to see if someone can explain....

Good luck!


fartface

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Re: Doing Your Own Taxes?
« Reply #4 on: September 21, 2014, 06:31:18 PM »
My mom is a CPA. She prefers TaxAct to Turbo Tax. She's had many clients over the years come in with f'd up turbo tax returns that she had to re-do...

JustTrying

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Re: Doing Your Own Taxes?
« Reply #5 on: September 21, 2014, 07:01:29 PM »
Thanks for the replies and encouragement so far! Student Doc - your situation does sound similarly complicated! MDM - I think the idea of looking at last year's tax return to guide this year's return is a great idea!

I'd still love it if someone had a book title that they felt was the best source for tax-preparation 101!

johnintaiwan

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Re: Doing Your Own Taxes?
« Reply #6 on: September 21, 2014, 07:12:15 PM »
I have a strange tax situation as well. living abroad with a non citizen wife and student loan and investment stuff made it a bit complicated. had them done by a pro the first year and just use that as a template. do a little research and you should be set.

Greg

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Re: Doing Your Own Taxes?
« Reply #7 on: September 21, 2014, 09:29:55 PM »
I'm self-employed and have 2 businesses, and use turbotax.  It's the only way I can handle it frankly.  It walks me through what seems like 100 different possible deductions, etc.  Handles my 2 businesses and some rental income easily enough, about 70 pages of return.  I'd recommend it.  I pay the fee at the end and have any refund if applicable deposited into my account.

Oscar_C

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Re: Doing Your Own Taxes?
« Reply #8 on: September 21, 2014, 11:12:26 PM »
I have a pretty complicated tax situation -- I'm self-employed, get a W2 for a different job, and have a scholarship above and beyond tuition/books that isn't reported (no tax form) but is still legally income. This year, the situation becomes more complicated with a new spouse, his W2, his self-employment, etc. With all that, I've always used TurboTax and will do so again this year. A little reading, a little research, and it works out. TurboTax guides you through most things nicely, has a pretty good customer support/FAQ, and it's easy enough to track down the law itself if you're confused.

Good luck!
From experience this is actually much easier than it sounds.
Total the w-2s, Each business is a Sch C and SE and the amounts are added to the appropriate lines.
How much does turbo tax actually cost (not sure of all the different versions that they use.

Worst case scenario just hire a pro [preferrably me :) ]

COlady

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Re: Doing Your Own Taxes?
« Reply #9 on: September 22, 2014, 09:54:38 AM »
I'm a CPA and would bet my left arm that HR Block screw*ed something up.  I have amended my fair share of HR Block returns.  It's possible that you could've had a CPA prepare your return for $800, that's ridiculous!

The difference between HR Block and a CPA:

HR Block - A few training courses

CPA - At least a bachelor's degree (in some states a master's degree is required), plus completion of the CPA exam (which is by no means easy for most). Your return is most likely then reviewed by at least a Manager level person with 5+ years of tax experience. 




Cheddar Stacker

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Re: Doing Your Own Taxes?
« Reply #10 on: September 22, 2014, 10:04:23 AM »
I'm a CPA and would bet my left arm that HR Block screw*ed something up.  I have amended my fair share of HR Block returns.  It's possible that you could've had a CPA prepare your return for $800, that's ridiculous!

The difference between HR Block and a CPA:

HR Block - A few training courses

CPA - At least a bachelor's degree (in some states a master's degree is required), plus completion of the CPA exam (which is by no means easy for most). Your return is most likely then reviewed by at least a Manager level person with 5+ years of tax experience.

+1. I'm a CPA as well.

If you are a DIYer and understand math and laws, doing your own taxes is just fine and I would encourage you to. When it's gets beyond your capabilities, please don't go to an HR Block type place. It's not worth it. Find a good CPA - there are plenty of good ones with reasonable rates. 80-90% of the personal tax returns I prepare cost less than $800, average is about $500 and many are very complex.

cavewoman

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Re: Doing Your Own Taxes?
« Reply #11 on: September 22, 2014, 10:25:33 AM »
 Maybe this isn't the best place to post this - but in case any Active Duty Military are reading this out of curiosity...
Taxslayer.com does free state and federal filing for Active Duty members.

I use their online program to support this (plus turbo tax online kept raising my price every year).  I find it easy to use.

Mister Fancypants

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Re: Doing Your Own Taxes?
« Reply #12 on: September 22, 2014, 11:14:23 AM »
I'm a CPA and would bet my left arm that HR Block screw*ed something up.  I have amended my fair share of HR Block returns.  It's possible that you could've had a CPA prepare your return for $800, that's ridiculous!

The difference between HR Block and a CPA:

HR Block - A few training courses

CPA - At least a bachelor's degree (in some states a master's degree is required), plus completion of the CPA exam (which is by no means easy for most). Your return is most likely then reviewed by at least a Manager level person with 5+ years of tax experience.

+1. I'm a CPA as well.

If you are a DIYer and understand math and laws, doing your own taxes is just fine and I would encourage you to. When it's gets beyond your capabilities, please don't go to an HR Block type place. It's not worth it. Find a good CPA - there are plenty of good ones with reasonable rates. 80-90% of the personal tax returns I prepare cost less than $800, average is about $500 and many are very complex.

@cheddar... I'm curious what you consider that would make a personal tax return complex...

Just a curiosity to see at what point a CPA considers a tax situation complicated...

Cheddar Stacker

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Re: Doing Your Own Taxes?
« Reply #13 on: September 22, 2014, 12:17:45 PM »
By very complex I was referring more to it being complex the non-accountant/CPA where they might consider paying a preparer.

Non accountant - as a general rule I would say it starts to become complex when you have a business return (Sch C/E) or multiple state returns or stock options or other unusual investments. I'm not saying it can't be done, but many people would prefer not to do it.

Cpa - complex usually involves multiple businesses and or k-1's, partner basis issues, at risk loss basis issues,  foreign transactions outside a brokerage house, complex depreciation due to basis step ups, tax planning issues, etc. It could be any one of those things or a combination of many, and there are many other unique circumstances that can muddy up the waters.

Is that what you were looking for fancypants?

Mister Fancypants

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Re: Doing Your Own Taxes?
« Reply #14 on: September 22, 2014, 12:47:35 PM »
By very complex I was referring more to it being complex the non-accountant/CPA where they might consider paying a preparer.

Non accountant - as a general rule I would say it starts to become complex when you have a business return (Sch C/E) or multiple state returns or stock options or other unusual investments. I'm not saying it can't be done, but many people would prefer not to do it.

Cpa - complex usually involves multiple businesses and or k-1's, partner basis issues, at risk loss basis issues,  foreign transactions outside a brokerage house, complex depreciation due to basis step ups, tax planning issues, etc. It could be any one of those things or a combination of many, and there are many other unique circumstances that can muddy up the waters.

Is that what you were looking for fancypants?

Actually yes... Just trying to gauge if I've been overly cautious when hiring a CPA or if I've been on target.

For the most part I've lined up to you complexity situations. I like to DIY most things especially finances, but hire out when I find it prudent.

Thanks!

Cheddar Stacker

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Re: Doing Your Own Taxes?
« Reply #15 on: September 22, 2014, 12:53:02 PM »
Based on our previous dialogue, I would strongly recommend a CPA for you. If not now, certainly in the future if/when some of your strategies gain complexity. Your situation is unique enough to warrant professional expertise/advice, and the cost should be negligible compared to the benefit.

Mister Fancypants

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Re: Doing Your Own Taxes?
« Reply #16 on: September 22, 2014, 01:55:02 PM »
Based on our previous dialogue, I would strongly recommend a CPA for you. If not now, certainly in the future if/when some of your strategies gain complexity. Your situation is unique enough to warrant professional expertise/advice, and the cost should be negligible compared to the benefit.

I evaluate on any given tax year whether I need to pay for expertise or not, I work in financial services so I am fairly well equipped to handle most things. When it gets a bit more complicated I have a CPA in the family I will bounce things off of. And then on the years when it is needed I have outsourced completely. In the future when things start to really get complicated I am sure I will be outsourcing entirely... I am not quiet there yet... I however think it will be sooner than later.

It less a concern of the cost involved than in turning over control and gaining trust. I had a very straight laced accountant for quiet a few years who did my corporate returns I had a C-corp for a consulting biz for a few years, I trusted him a great deal, but his strengths are on the business side of things not the personal side where my complexities are leaning. I also only trusted him, his staff screwed things up too often and I had to know everything anyway.

Last year I had a CPA who dealt specifically with a Trading business, but that is his specialty, he did the K-1 and small amounts of advice otherwise.

I am going to need a specialist this year for legal settlements... Having some trouble finding someone locally I like and trust...

Thanks for considering me unique :) I take that as a complement.

johnintaiwan

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Re: Doing Your Own Taxes?
« Reply #17 on: September 22, 2014, 08:41:37 PM »

Is that what you were looking for fancypants?

I like that by adding his name at the end it makes the post seem aggressive haha. I dont think it would work with most other names.

Oscar_C

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Re: Doing Your Own Taxes?
« Reply #18 on: September 22, 2014, 08:46:19 PM »
I'm a CPA and would bet my left arm that HR Block screw*ed something up.  I have amended my fair share of HR Block returns.  It's possible that you could've had a CPA prepare your return for $800, that's ridiculous!

The difference between HR Block and a CPA:

HR Block - A few training courses

CPA - At least a bachelor's degree (in some states a master's degree is required), plus completion of the CPA exam (which is by no means easy for most). Your return is most likely then reviewed by at least a Manager level person with 5+ years of tax experience.

QFT.

While I am not a CPA (yet), I agree. My tax firm has had countless faulty returns from H&R Black and Liberty Tax (most prominent chains in my area)

Cheddar Stacker

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Re: Doing Your Own Taxes?
« Reply #19 on: September 22, 2014, 08:57:41 PM »

Is that what you were looking for fancypants?

I like that by adding his name at the end it makes the post seem aggressive haha. I dont think it would work with most other names.

I noticed that when I typed it but that wasn't my intent. Me and fancypants have had plenty of back and forth here though so even if he read it that way i'd hope he would know I meant no offense.

Is that what you were looking for taiwan? Yeah, not the same. You're right.

usmarine1975

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Re: Doing Your Own Taxes?
« Reply #20 on: September 22, 2014, 09:17:29 PM »
I agree with Cheddar Stacker mainly because I use a CPA that charges a set fee for each form. I have rentals and other things that yes I could learn and do but have no desire to do so.  I barely squeek by just providing the info for accountant.

Also I had a friend who used turbo tax and had he submitted that return would have over paid close to 30k in one year. The 300 fee he paid to an accountant was well worth it.  Plus if I get audited I want someone with me.  Some times DIY is not the smartest move.

Mister Fancypants

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Re: Doing Your Own Taxes?
« Reply #21 on: September 22, 2014, 09:27:17 PM »

Is that what you were looking for fancypants?

I like that by adding his name at the end it makes the post seem aggressive haha. I dont think it would work with most other names.

I noticed that when I typed it but that wasn't my intent. Me and fancypants have had plenty of back and forth here though so even if he read it that way i'd hope he would know I meant no offense.

Is that what you were looking for taiwan? Yeah, not the same. You're right.

Hahaha... Until I reread that line in the quote I never would have even noticed the subtle way it could have been misread...

Like Cheddar said we have interacted a fair amount on the forums... I took no offense...

Now I got a good laugh though :)