Author Topic: Taxes aren't hard, just time consuming the first year.  (Read 1622 times)

nawhite

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Taxes aren't hard, just time consuming the first year.
« on: March 10, 2017, 08:12:02 AM »
I got lazy about 6 years ago and started paying an accountant $250-$350 per year to do my taxes. Honestly I'm not that upset with it because that also covered a tax planning session later in the year. But I'm studying to be a registered investment advisor and my wife was giving me shit about being so into finances but not doing my own taxes. So paying an accountant stopped this year.

Granted I didn't pick the easiest year to do it. We moved for work, my wife went self employed, we started renting a house, we installed solar panels, etc. All in all, we ended up with 11 forms on the federal return and I still need to do my state return.

I still feel pretty awesome about it all though. Effective rate around 7.5% on over 100k of income. And I learned a lot to help with planning purposes for next year.


Dicey

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Re: Taxes aren't hard, just time consuming the first year.
« Reply #1 on: March 10, 2017, 08:54:42 AM »
A doctor's not a lawyer and a lawyer's not a doctor. Knowledge in one specialty does not assume same in another. There's danger in overestimating one's skill and knowledge of complex and frequently changing subjects. I pay a CPA, and he's worth his (considerable) weight in gold. I call that smart, not lazy. In our case, his reasonable fees are also tax deductible. I have a lot more interesting and lucrative things to do with my time than study tax code. Ugh.

Paul der Krake

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Re: Taxes aren't hard, just time consuming the first year.
« Reply #2 on: March 10, 2017, 09:04:03 AM »
There may be a time in my life when paying an accountant will be the right move, but that hasn't arrived yet. My first return was pretty simple, and each passing year added complexity. It'd be very difficult to start now.

Start early.

nawhite

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Re: Taxes aren't hard, just time consuming the first year.
« Reply #3 on: March 10, 2017, 01:17:08 PM »
A doctor's not a lawyer and a lawyer's not a doctor. Knowledge in one specialty does not assume same in another. There's danger in overestimating one's skill and knowledge of complex and frequently changing subjects. I pay a CPA, and he's worth his (considerable) weight in gold. I call that smart, not lazy. In our case, his reasonable fees are also tax deductible. I have a lot more interesting and lucrative things to do with my time than study tax code. Ugh.

I agree with you that I wouldn't want my lawyer to treat cancer or my doctor to litigate my criminal defense. But tax preparation is no where near as complicated as either of those. I literally ready every single IRS instruction sheet and publication that applied to my situation in an afternoon. I only have to justify myself to the IRS and I feel 100% confident that for every decision I made I can point to a particular IRS document and say "this paper says I can do it this way." I'm honestly less afraid of being audited now than when I paid my accountant to do it.

I'll agree that an accountant can be a worthwhile investment if you have a lot of leeway with how to count things and go back to your accountant throughout the year to do real tax planning but tax filing is simpler than anything I did in high school. Paying someone to do your tax filing is just silly.