Author Topic: Did my own taxes, saved $900  (Read 3840 times)

Merrie

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Did my own taxes, saved $900
« on: March 28, 2015, 05:28:46 AM »
We hired a tax guy in 2012 and 2013. I always did our taxes prior to that and this year, becoming more Mustachian and less willing to pay for convenience, I didn't want to pay $200 to the accountant. Plus our taxes are less complicated than 2013 because we are no longer paying a nanny as a household employee. Plus I'd already seen a couple of instances where the accountant made mistakes that ended up counting against me.

So when reviewing our federal taxes, I found an error on last year's taxes that I'd have to refile in order to get our money back, and when preparing the corrected forms, I found another omission. Total savings $350 for tax year 2013. So I figure I saved potentially $900--$350 for 2013, $350 for 2014 in preventing the same two errors from happening again, which they likely would have since they pertained to the mishandling or non-handling of situations that were similar in both years, and $200 on a tax preparation fee (which wasn't deductible because we didn't meet the threshold). And a few bucks on gas to drive to and from the accountant's. Not bad for a few hours of work.

My takehome from this is that while the accountant knows tax law better than me, I know my own situation better than anyone else, and while he gets paid no matter what, I do better if I take advantage of every deduction due to me--thus making me better qualified to look at each potential deduction and figure out if it applies to me or should apply to me. And honestly I've never found it THAT complicated to figure out tax forms/rules as they apply in my own fairly simple situation (mortgage, student loan interest, 529 plans, kids, and now "self-employment" with no expenses again).

Retire-Canada

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Re: Did my own taxes, saved $900
« Reply #1 on: March 29, 2015, 04:38:36 PM »
My GF pays someone to do her taxes and seems to have nothing but hassles getting it done right. I've suggested she does the taxes herself, but she finds the process daunting despite spending a ton of time on correcting the mistakes that get made every year.

I've got business taxes to do on top of my personal taxes and find it easier to do them myself for the reasons you suggest. Nobody knows your situation better than you and if stuff is similar year to year you can get help with specific questions that might stump you initially.

Congrats on saving some money. :)

-- Vik

Sibley

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Re: Did my own taxes, saved $900
« Reply #2 on: March 29, 2015, 07:49:37 PM »
Good for you! It's good for people to take the time and effort to do their own taxes.

forummm

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Re: Did my own taxes, saved $900
« Reply #3 on: March 30, 2015, 08:09:31 PM »
Good going! I always do my own taxes too. Not only do I save on preparer fees, but I learn more about how the system works so I can save more in the future by making good tax-efficient decisions.

johnny847

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Re: Did my own taxes, saved $900
« Reply #4 on: March 30, 2015, 08:43:05 PM »
Good going! I always do my own taxes too. Not only do I save on preparer fees,

YES.

It is this point that way to many people do not understand. Even some Mustachians.
Some people think why the hell would I incur the headache of doing my taxes myself when I can just buy tax software that will do it for me?
Well because with tax software you don't learn anything. Filing your taxes correctly in any given year can potentially save you hundreds of dollars, maybe a couple thousand. Understanding the tax code and doing proper tax planning for the rest of your life can save you tens of thousands, if not hundreds of thousands or more over your lifetime.

Arzosah

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Re: Did my own taxes, saved $900
« Reply #5 on: March 31, 2015, 12:38:27 PM »
I've done my own tax declaration for about four years (had an accountant for about 20 years before that).  It became ridiculous *not* to do it myself once I had an investment apartment in France - the accountant just didn't understand what to do, all sorts of crazy mistakes were getting made.  So I do my UK taxes myself now, which is 700 a year saved.  I still have to have a French accountant - no way do I read French well enough to do that myself, but at least they're *really* efficient.

Merrie

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Re: Did my own taxes, saved $900
« Reply #6 on: April 01, 2015, 05:17:25 AM »
Good going! I always do my own taxes too. Not only do I save on preparer fees,
Understanding the tax code and doing proper tax planning for the rest of your life can save you tens of thousands, if not hundreds of thousands or more over your lifetime.

Yep. I'm already looking at how to structure this for next year. We are in that 100-110k range where a lot of deductions start to phase out, but if I can reduce our AGI for next year by just a little we'll come out ahead. And since I am not fully funding my 401k yet (I know, ugh), that seems like the easiest place to start. Or they could change the tax code so we could deduct all our student loan interest "above the line"... that would be nice, would have totally fixed that problem for 2014... but I'm not holding my breath. 

johnny847

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Re: Did my own taxes, saved $900
« Reply #7 on: April 01, 2015, 07:16:16 AM »
Good going! I always do my own taxes too. Not only do I save on preparer fees,
Understanding the tax code and doing proper tax planning for the rest of your life can save you tens of thousands, if not hundreds of thousands or more over your lifetime.

Yep. I'm already looking at how to structure this for next year. We are in that 100-110k range where a lot of deductions start to phase out, but if I can reduce our AGI for next year by just a little we'll come out ahead. And since I am not fully funding my 401k yet (I know, ugh), that seems like the easiest place to start. Or they could change the tax code so we could deduct all our student loan interest "above the line"... that would be nice, would have totally fixed that problem for 2014... but I'm not holding my breath.

Yup 401k funding is definitely stop #1 to reducing your AGI.
Best of luck with reducing your tax bill! (Though don't fall into the trap of doing this that will reduce your tax bill but increase your overall costs)

Merrie

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Re: Did my own taxes, saved $900
« Reply #8 on: April 01, 2015, 05:27:28 PM »
"(Though don't fall into the trap of doing this that will reduce your tax bill but increase your overall costs)"

What are examples of things that do this?

johnny847

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Re: Did my own taxes, saved $900
« Reply #9 on: April 01, 2015, 05:42:48 PM »
"(Though don't fall into the trap of doing this that will reduce your tax bill but increase your overall costs)"

What are examples of things that do this?

They'll be pretty obvious to you but you can do stuff like :
Buy a big house and get a mortgage deduction
Donate a bunch to charity (which is noble but you shouldn't do this if your goal is solely to save you money)
Have more kids (child tax credit)

Merrie

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Re: Did my own taxes, saved $900
« Reply #10 on: April 01, 2015, 06:52:13 PM »
Oh, that makes sense. I was thinking there might be some boneheaded ones I'd missed.

"Buy a big house and get a mortgage deduction "

Well, we did kinda already do this, though not for this reason.

johnny847

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Re: Did my own taxes, saved $900
« Reply #11 on: April 01, 2015, 07:12:42 PM »
Oh, that makes sense. I was thinking there might be some boneheaded ones I'd missed.

"Buy a big house and get a mortgage deduction "

Well, we did kinda already do this, though not for this reason.

Haha yea I should've said buy a big house to get a mortgage deduction.