Author Topic: Question about taxes  (Read 4193 times)

okkiedokki

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Question about taxes
« on: January 27, 2015, 10:16:29 AM »
Ever since finding this website back in May my wife and I have made tremendous strides in becoming more mustachian.  Now that we are in tax season, I found myself wondering about doing my own taxes.  We have been using an accountant costing us roughly $500 a year, and that's a lot of money we can use towards principle on a loan.  I don't think our taxes are too terrible to tackle, we have daycare costs, both salaries, stocks (dividends and gains/losses), the house student loans, and donations made to take care of.  My apprehension is I did my taxes one year when I was in college and got audited that year.  It turned out I messed my taxes up a lot.  So I'm wondering and kind of seeking reassurance, those of you who do their own taxes using say Turbo Tax, with all my items take care of will it be terribly hard?   Am I setting myself up for another issue or is it pretty straight forward?

MetalCap

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Re: Question about taxes
« Reply #1 on: January 27, 2015, 10:25:12 AM »
OK,

There's nothing that you mentioned that couldn't be handled by H&R or Turbo Tax for<1/5th of that price.  If you're still concerned, you can prepare your return and get the accountant to "audit" the return for about 1/2 his/her price or less.

Audits are very rare.  Just double check your numbers, not sure what messed up back in college but if it was before turboTax, etc that makes a world of difference.  TT and HRBlock also have audit protection plans if you're still really worried.

MC

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Re: Question about taxes
« Reply #2 on: January 27, 2015, 10:33:41 AM »
Was your audit in college traumatic? Did the IRS agent beat you with a stick? Steal your panties?

Or did your return just get corrected, you paid an amount owed and you moved on?

As a CPA, I'm always happy to take someone's $500. But consider the worst case scenario... it's just an audit.

SomedayStache

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Re: Question about taxes
« Reply #3 on: January 27, 2015, 10:38:24 AM »
Try it!  If you are still worried after completing the forms you can go and pay your guy.  Then you can compare 'answers'.

I bet next year you will do your own.

okkiedokki

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Re: Question about taxes
« Reply #4 on: January 27, 2015, 10:42:06 AM »
Was your audit in college traumatic? Did the IRS agent beat you with a stick? Steal your panties?

Or did your return just get corrected, you paid an amount owed and you moved on?

As a CPA, I'm always happy to take someone's $500. But consider the worst case scenario... it's just an audit.

That made me laugh when I read that.  No it wasn't traumatic and the agent that worked with me was nice, like wise I was nice to him and apologized.  I guess I'm just overly worried about messing it up but like you guys said it is just an audit and they don't happen frequently.  I'm leaning more and more on the side of doing it myself like I do with most everything.

zephyr911

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Re: Question about taxes
« Reply #5 on: January 27, 2015, 11:50:48 AM »
Ever since finding this website back in May my wife and I have made tremendous strides in becoming more mustachian.  Now that we are in tax season, I found myself wondering about doing my own taxes.  We have been using an accountant costing us roughly $500 a year, and that's a lot of money we can use towards principle on a loan.  I don't think our taxes are too terrible to tackle, we have daycare costs, both salaries, stocks (dividends and gains/losses), the house student loans, and donations made to take care of.  My apprehension is I did my taxes one year when I was in college and got audited that year.  It turned out I messed my taxes up a lot.  So I'm wondering and kind of seeking reassurance, those of you who do their own taxes using say Turbo Tax, with all my items take care of will it be terribly hard?   Am I setting myself up for another issue or is it pretty straight forward?
You're paying too much for the complexity of the situation you describe. I have done paid tax prep and I'd gladly do yours for half that price.
If you want to DIY it but are worried about making mistakes, I suggest researching the specific issues in question.
You can go on http://www.irs.gov/ and look up each form, along with its line-by-line instructions. If that doesn't get you all the way there, there is a lot of free advice online from accountants and in discussion groups. The IRS will even pick up the phone to answer questions from people just looking to do the right thing on a tax return. I've done it quite a bit in the past when I got out of my depth.

rugorak

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Re: Question about taxes
« Reply #6 on: January 27, 2015, 01:30:16 PM »
The IRS will even pick up the phone to answer questions from people just looking to do the right thing on a tax return. I've done it quite a bit in the past when I got out of my depth.
Given the IRS budget cuts they have fewer people to answer the phone these days. So you may have issues with getting through the closer you get to April 15. But on the flip side they also have fewer people to do audits.

As everyone else said your taxes sound straight forward so doing them yourself should be easy. Or one of the many tax software out there can help. I have used taxact.com for the past few years and been happy with them. You'll pay less than $20 for their highest level of support. I like it just because it basically is an automated interview asking questions. Makes it easy for me.

gluskap

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Re: Question about taxes
« Reply #7 on: January 27, 2015, 01:33:45 PM »
I wouldn't recommend doing it by yourself as it can get pretty confusing.  But there are plenty of websites that will help you or TurboTax where they walk you through each of the steps and fill out the forms for you for a much lower cost.  I recommend that.  I use freetaxusa.com and liked it a lot.  It's usually free to e-file for federal and a small fee to e-file for state taxes.

James

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Re: Question about taxes
« Reply #8 on: January 27, 2015, 01:44:22 PM »
It's not the one year savings that make it such a huge deal, it's the yearly savings and the compounding return of those savings being invested that make this such a huge deal. $500 per year over the next 20 years compounding with returns in the market is a huge chunk of change!!!


Doesn't matter what you choose, paper, turbo tax, or any other system, just find a new way of doing it that doesn't cost much. Your future self will thank you... :D

Lis

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Re: Question about taxes
« Reply #9 on: January 27, 2015, 04:36:15 PM »
I've used TurboTax the past few years and have been fine. Granted, the most complicated thing I've put on there have been student loan interest and charity, but I know plenty of others with real estate, stocks, dividends, all the fun stuff who swear by it. They literally hold your hand through the entire process and ask every single question you could think of. If you really need help, they have various forms of accessing someone live (phone and chat). They're getting a lot of crap this year for bumping up their prices and changing costs around without telling anyone til it's time to pay (many people who were used to paying ~$30 were suddenly being charged ~$80 for the exact same work as last year). There is a way to get a rebate on the extra cost, and it still should be less than $100.

There are plenty of other free/cheap DIY ways too... TaxAct, H&R, etc. The thought of printing out the forms and doing it myself terrifies me, but with programs like these it's pretty easy.

johnny847

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Re: Question about taxes
« Reply #10 on: January 27, 2015, 05:25:26 PM »
It really isn't that difficult to do your taxes yourself. And also, by doing it yourself, you will learn the tax code yourself, so you can do tax planning, which can save you tens of thousands or more in taxes over your lifetime.

I'm sure there are many guides on taxes out there. I have one on my blog: https://fiby40.wordpress.com/2015/01/12/personal-income-taxes/. I cover capital gains taxes in the following two posts.

okkiedokki

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Re: Question about taxes
« Reply #11 on: January 27, 2015, 06:10:34 PM »
Well I think everyone convinced me.  I'm going to check out the websites referenced and either use one of them or turbotax.  Thanks for the help. 

MrMoogle

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Re: Question about taxes
« Reply #12 on: January 27, 2015, 06:43:31 PM »
If you have Vanguard, you can get TurboTax at a discounted price.  When you hit flagship, it's basically free.  You just have to do it through their website.

If you're not aware, TurboTax changed their different options this year:
http://www.kiplinger.com/article/taxes/T056-C005-S003-many-turbotax-desktop-users-will-have-to-pay-more.html

Schedule D now requires Premier, where last year it required Deluxe.  Schedule D is for stocks or bonds with dividends or capital gains.  Mutual funds are usually in Schedule B, but I did have some in Schedule D for my bond fund...