Best Way to Get Taxes Done

[Carlin]

My husband and I have been fortunate enough to personally know an accountant who has done our taxes for free for the entirety of our adult life (The last 5 Years).  We recently moved far away from this person, and are on our own for the first time.  Considering we have no knowledge at all of how to do taxes, what do you all suggest is the best way to go about getting them done this year?  Tax software? H&R Block or something of the sort? 

[SeattleCPA]

So I'm in the business of preparing taxes... and you might think that would mean I'd suggest you go to paid preparer...

But actually I think you ought to try TurboTax or TaxCut... and then I think you keep your taxes simple enough that you can continue to DIY it.

BTW, if your taxes aren't simple enough to do yourself, my next suggestion would be to simplify them ASAP so you can do them yourself.

Here's a long, drawn out argument about why you should DIY in case you're interested...

http://evergreensmallbusiness.com/your-cpa-versus-turbotax/

[Carlin]

So I'm in the business of preparing taxes... and you might think that would mean I'd suggest you go to paid preparer...

But actually I think you ought to try TurboTax or TaxCut... and then I think you keep your taxes simple enough that you can continue to DIY it.

BTW, if your taxes aren't simple enough to do yourself, my next suggestion would be to simplify them ASAP so you can do them yourself.

Here's a long, drawn out argument about why you should DIY in case you're interested...

http://evergreensmallbusiness.com/your-cpa-versus-turbotax/

Thanks! Now, I apologize if this is a silly question, but how do I know if my taxes are simple or complicated? (It all seems pretty complicated to me)

[SeattleCPA]

If your income gets reported on forms like W2s and 1099-INTs from the bank, etc., your return should be simple.

If you need to construct profit and loss statements (because you have rentals or a small business) or you have a multistate or international tax footprint, then your return isn't simple. And you should simplify it if you can. :-)

[Carlin]

If your income gets reported on forms like W2s and 1099-INTs from the bank, etc., your return should be simple.

If you need to construct profit and loss statements (because you have rentals or a small business) or you have a multistate or international tax footprint, then your return isn't simple. And you should simplify it if you can. :-)

Thank you, mine are definitely simple! We are just run of the mill recent college grads with our first real jobs and roughly 1K in a Betterment account.

[Mezzie]

I did my taxes by hand for decades until last year when my credit union offered TurboTax for free -- it saved quite a bit of time, so I would suggest that or another program so it's easier. This year it isn't free, but I think it's worth the $40 or so for the time I'll save.

Regardless, there are step by step instructions and rules no matter what you decide -- program or booklet of instructions. As long as you don't have any super fancy deductions or income, it's pretty straightforward, and getting familiar with how it works and how the tax code changes is worthwhile, I think.

[CareCPA]

Why not just have your accountant continue to do them? You don't need to live near your accountant for them to complete your tax return for you. Almost everything can be done remotely these days.

[teen persuasion]

If your income gets reported on forms like W2s and 1099-INTs from the bank, etc., your return should be simple.

If you need to construct profit and loss statements (because you have rentals or a small business) or you have a multistate or international tax footprint, then your return isn't simple. And you should simplify it if you can. :-)

Thank you, mine are definitely simple! We are just run of the mill recent college grads with our first real jobs and roughly 1K in a Betterment account.

Early on, and simple, is the best time to learn how to do them yourself.  Get out your previous year's tax forms from your tax guy.  Pick up the same forms from the library or download them from IRS.gov, and the instructions.  Most of the form actually won't probably apply to you, and will remain blank (look at last year's forms for guidance).  Follow the instructions, they generally go line-by-line.

Now, to file, you probably want to efile.  You have options here - use commercial SW like TurboTax, etc., or use the fillable forms on the IRS site.  If you are feeling unsure of your results working thru things on paper, try SW and see if your results match, or if they differ -where and why.  The SW tend to use a Q&A format, asking you questions and filling in the relevant forms.  I find this takes me much longer than just filling out the forms directly, since the SW must ask about everything possible, even if it doesn't apply to me (to cover all bases), while I have learned over time which forms I do and don't need.  As a beginner, the SW being thorough could be good for you.

Depending on income, you could be eligible to use the IRS Free File options to use SW for free.  Check out their link before beginning with any SW - you have to access it thru the IRS link for it to be free (or start over!).  If you have a state income tax, check out your state tax website to similar free file options.  I found that I had to access TurboTax thru my state link for BOTH the state and federal returns to be free, even though the IRS seemed to link to the same TurboTax site.

The advantage to doing things on paper is learning how taxes are figured, what affects your taxes or credits.  Learning the what and how lets you start planning for future changes, and you can begin to see how to optimize your finances, as well as avoid pitfalls like going over an eligibility cliff.  Start now while your situation is not complex, it won't be difficult to learn the basics, and each year you will learn a little bit more as life unfolds (house, kids, taxable investments, HSA, etc.)

[MDM]

Thank you, mine are definitely simple! We are just run of the mill recent college grads with our first real jobs and roughly 1K in a Betterment account.

Good advice already given in other posts.

You might also go to https://www.irs.gov/forms-pubs and download the 2015 form 1040 and instructions.  Then, without looking at the 1040 your accountant did for you last year, take the information you gave to the accountant (W-2, 1099, etc.) and fill out your 2015 return by hand.  After you are done, compare your work to what the accountant did.

Let us know how that goes - and good luck!

[2Birds1Stone]

I used to use my dads CPA for years and he would charge $100/return.

I've switched to Turbotax back in 2014 and have not looked back.

[SeattleCPA]

Thank you, mine are definitely simple! We are just run of the mill recent college grads with our first real jobs and roughly 1K in a Betterment account.

Good advice already given in other posts.

You might also go to https://www.irs.gov/forms-pubs and download the 2015 form 1040 and instructions.  Then, without looking at the 1040 your accountant did for you last year, take the information you gave to the accountant (W-2, 1099, etc.) and fill out your 2015 return by hand.  After you are done, compare your work to what the accountant did.

Let us know how that goes - and good luck!

I would not recommend doing a return by hand. Too easy to make a mistake. It might be a good way to understand the logic though... and that sort of understanding often lets you optimize your tax burden. (Good tax accountants understand the calculations and so do optimize for you.)

BTW to respond to 2birds1stone, your dad was probably paying enough to the CPA that the CPA essentially did your return at cost. I think our per return fee probably works out to almost $100.

[With This Herring]

When you moved in 2016, did you change states?  That might present some wrinkles that would indicate getting a second set of eyes on your return.  Otherwise, you should try the free software programs offered.  Just don't go to H&R Block.

2Birds1Stone, that is pretty cheap.  I think OldFirm charged more than that for basic returns just to discourage the very simple 2 W-2s, 2 kids, and 1 1099-INT returns that people tend to be better off doing themselves.

[MDM]

Thank you, mine are definitely simple! We are just run of the mill recent college grads with our first real jobs and roughly 1K in a Betterment account.

Good advice already given in other posts.

You might also go to https://www.irs.gov/forms-pubs and download the 2015 form 1040 and instructions.  Then, without looking at the 1040 your accountant did for you last year, take the information you gave to the accountant (W-2, 1099, etc.) and fill out your 2015 return by hand.  After you are done, compare your work to what the accountant did.

Let us know how that goes - and good luck!

I would not recommend doing a return by hand. Too easy to make a mistake. It might be a good way to understand the logic though... and that sort of understanding often lets you optimize your tax burden. (Good tax accountants understand the calculations and so do optimize for you.)

Just to be clear: the point was to do the 2015 return by hand as a learning experience, with the accountant's 2015 return serving as the answer key for them to self-check.  The 2016 return they will be doing in the upcoming months is a separate issue.

Even back in the good ol' days, after walking uphill to work and back, we used a spreadsheet to check the math on the hand-filled forms we returned.  We still have that spreadsheet (modified as needed) for current year tax planning, but do use TurboTax or TaxAct for the actual return.  The spreadsheet serves as a check against a fat-fingered entry into the tax software.

[Metric Mouse]

I used to use my dads CPA for years and he would charge $100/return.

I've switched to Turbotax back in 2014 and have not looked back.

Wow. I get mine done for about $60 iirc. Probably too much, but if it's $40 for software I'm ahead on time spent.

[Paul der Krake]

I do it myself, no software. It takes me a long time, but I like knowing my return inside and out. I have done so since 2012, the first year I had income. Every single year it has grown in complexity (and income, a good problem to have), and every year I have learned something new.

If your income is low enough, there are free versions that you can use to double check your work. Supposedly creditkarma.com will have a free version for everyone this year?

Learn now while it's easy. Get familiar with the tax code. Good tax decisions are made during the year, not when preparing your return.

Then keep copies of your return and a document outlining what you've done, because you won't remember how you got to all the numbers if you ever have to take a peek in the future.

[SeattleCPA]

Just to make a couple-three things clear that I wasn't clear about earlier in thread...

I am an absolute proponent of doing your return yourself if you can. And you should be able to DIY if you keep things simple. Further if your return isn't simple enough to DIY, I think you should try to get your return simple enough for DIY.

For the record, when I said something about $100 per return cost, I need to point out that's not what we charge. Our average 1040 return preparation fee is $1000 roughly. That $100 is what we pay the software company to use the high quality software that lets us do a complex return.

After doing, gosh, thousands of tax returns, I would say it is a mistake to do such a return by hand. BTW, it's fine to manually prepare a return by hand as a learning exercise... agree that's a great way to understand the calculations. But you shouldn't do returns you file by hand.

[oldmannickels]

Just to make a couple-three things clear that I wasn't clear about earlier in thread...

I am an absolute proponent of doing your return yourself if you can. And you should be able to DIY if you keep things simple. Further if your return isn't simple enough to DIY, I think you should try to get your return simple enough for DIY.

For the record, when I said something about $100 per return cost, I need to point out that's not what we charge. Our average 1040 return preparation fee is $1000 roughly. That $100 is what we pay the software company to use the high quality software that lets us do a complex return.

After doing, gosh, thousands of tax returns, I would say it is a mistake to do such a return by hand. BTW, it's fine to manually prepare a return by hand as a learning exercise... agree that's a great way to understand the calculations. But you shouldn't do returns you file by hand.

Laws change when doing forms by hand you may not know what you are missing, which can lead to bigger issues. I once met someone who refused to use tax software and had entered into AMT for years without realizing it and got slapped with a huge bill by the IRS. Software would have easily prevented this.

[teen persuasion]

Just to make a couple-three things clear that I wasn't clear about earlier in thread...

I am an absolute proponent of doing your return yourself if you can. And you should be able to DIY if you keep things simple. Further if your return isn't simple enough to DIY, I think you should try to get your return simple enough for DIY.

For the record, when I said something about $100 per return cost, I need to point out that's not what we charge. Our average 1040 return preparation fee is $1000 roughly. That $100 is what we pay the software company to use the high quality software that lets us do a complex return.

After doing, gosh, thousands of tax returns, I would say it is a mistake to do such a return by hand. BTW, it's fine to manually prepare a return by hand as a learning exercise... agree that's a great way to understand the calculations. But you shouldn't do returns you file by hand.

Laws change when doing forms by hand you may not know what you are missing, which can lead to bigger issues. I once met someone who refused to use tax software and had entered into AMT for years without realizing it and got slapped with a huge bill by the IRS. Software would have easily prevented this.

True, but GIGO also applies.  Sis and I just learned last year that dad didn't know that cap gains and qualified dividends had preferential rates; he'd been assuming ordinary income rates.  Brother had been running things thru SW to efile, but still...



It took a lot of explaining to convince Dad his CGQD would be 0% at his marginal rate, he just couldn't believe it.  Dad's a retired accountant, knew things inside out... but once retired he was out of the loop, and has no desire to join the computer culture.  When newspapers dropped his stock quotes he was furious.  Sis now has them bookmarked and shows him every week on her phone. 

[With This Herring]

Just to make a couple-three things clear that I wasn't clear about earlier in thread...

I am an absolute proponent of doing your return yourself if you can. And you should be able to DIY if you keep things simple. Further if your return isn't simple enough to DIY, I think you should try to get your return simple enough for DIY.

For the record, when I said something about $100 per return cost, I need to point out that's not what we charge. Our average 1040 return preparation fee is $1000 roughly. That $100 is what we pay the software company to use the high quality software that lets us do a complex return.

After doing, gosh, thousands of tax returns, I would say it is a mistake to do such a return by hand. BTW, it's fine to manually prepare a return by hand as a learning exercise... agree that's a great way to understand the calculations. But you shouldn't do returns you file by hand.

Laws change when doing forms by hand you may not know what you are missing, which can lead to bigger issues. I once met someone who refused to use tax software and had entered into AMT for years without realizing it and got slapped with a huge bill by the IRS. Software would have easily prevented this.

True, but GIGO also applies.  Sis and I just learned last year that dad didn't know that cap gains and qualified dividends had preferential rates; he'd been assuming ordinary income rates.  Brother had been running things thru SW to efile, but still...



It took a lot of explaining to convince Dad his CGQD would be 0% at his marginal rate, he just couldn't believe it.  Dad's a retired accountant, knew things inside out... but once retired he was out of the loop, and has no desire to join the computer culture.  When newspapers dropped his stock quotes he was furious.  Sis now has them bookmarked and shows him every week on her phone.

I've seen this.  Long-retired partner of OldFirm, maybe in his late 80s?, came into the office every year to prepare his personal taxes.  He tried to use the computer programs, but our tax manager always checked the returns before they were efiled, because that partner just wasn't keeping abreast of tax law changes and would not notice errors in his return.

As a vote against paper preparation as your sole means of doing all but the simplest taxes, keep in mind that current tax law seems to be written with the assumption that everyone will be using software.  They can throw in as many rules and exceptions and silly computations as they want, because it is assumed that no human being will be trying to track it all.

[SeattleCPA]

As a vote against paper preparation as your sole means of doing all but the simplest taxes, keep in mind that current tax law seems to be written with the assumption that everyone will be using software.  They can throw in as many rules and exceptions and silly computations as they want, because it is assumed that no human being will be trying to track it all.

The above is a really good point. The software seems to foster tax law complexity...

[beastykato]

Do those of you who trade stocks do your own?   I've been using robinhood for the past couple years and last year I did do it all myself (I only had about 20 transactions).  However, this year I know I have over 100 transactions and the thought of entering in each of of these transactions that I've made throughout the whole year sucks and would be very time consuming. 

I don't know if there are any cost effective ways to have someone do this for me?  I'm sure H&R block is outrageous, anything under $100 and I'd probably let someone do it for me.  I think I pay like $15 with Tax Act currently to do it myself.

[With This Herring]

Do those of you who trade stocks do your own?   I've been using robinhood for the past couple years and last year I did do it all myself (I only had about 20 transactions).  However, this year I know I have over 100 transactions and the thought of entering in each of of these transactions that I've made throughout the whole year sucks and would be very time consuming. 

I don't know if there are any cost effective ways to have someone do this for me?  I'm sure H&R block is outrageous, anything under $100 and I'd probably let someone do it for me.  I think I pay like $15 with Tax Act currently to do it myself.

Paying a tax-prep place to do extensive data entry for you is going to cost.  I would not recommend H&R Block.

Most brokerages have a function that will let you download your sales in either CSV or spreadsheet format (and CSV can be turned into a spreadsheet by opening it up with a spreadsheet program such as Excel).  If you don't see this feature, contact your brokerage.  It looks like TaxAct uses a spreadsheet-style input for stock sales, and they do appear to have an import function (see list of relevant answers).  It will probably take some time to get a simple import/paste system working, but write down your steps for future reference and I'd bet you could have this done very quickly in future years.

[Livewell]

My husband and I have been fortunate enough to personally know an accountant who has done our taxes for free for the entirety of our adult life (The last 5 Years).  We recently moved far away from this person, and are on our own for the first time.  Considering we have no knowledge at all of how to do taxes, what do you all suggest is the best way to go about getting them done this year?  Tax software? H&R Block or something of the sort?

After many years of paid for services I tried TurboTax one year and was surprised I could get exactly the same result.  $79 versus $1000, and two hours of my time.  I suppose I could save the $79 and do paper but I see value in the simple menus, import ease, and analysis TurboTax provides.  Highly recommend it!

[Frugalman19]

So I'm in the business of preparing taxes... and you might think that would mean I'd suggest you go to paid preparer...

But actually I think you ought to try TurboTax or TaxCut... and then I think you keep your taxes simple enough that you can continue to DIY it.

BTW, if your taxes aren't simple enough to do yourself, my next suggestion would be to simplify them ASAP so you can do them yourself.

Here's a long, drawn out argument about why you should DIY in case you're interested...

http://evergreensmallbusiness.com/your-cpa-versus-turbotax/

Im really surprised you recommend this. I also prepare taxes, and I cannot tell you how many times I have had clients come in with their return done incorrectly. I had a client do a simple rollover and when in turbo tax accidentally clicked the box that it was a normal taxable distribution. That one mistake would have paid for 20 years of tax prep. If you dont understand taxes its just not financially a good move to try and save a couple hundred dollars a year, especially if you find a CPA or EA that you can bounce ideas off of.   

[SeattleCPA]

So I'm in the business of preparing taxes... and you might think that would mean I'd suggest you go to paid preparer...

But actually I think you ought to try TurboTax or TaxCut... and then I think you keep your taxes simple enough that you can continue to DIY it.

BTW, if your taxes aren't simple enough to do yourself, my next suggestion would be to simplify them ASAP so you can do them yourself.

Here's a long, drawn out argument about why you should DIY in case you're interested...

http://evergreensmallbusiness.com/your-cpa-versus-turbotax/

Im really surprised you recommend this. I also prepare taxes, and I cannot tell you how many times I have had clients come in with their return done incorrectly. I had a client do a simple rollover and when in turbo tax accidentally clicked the box that it was a normal taxable distribution. That one mistake would have paid for 20 years of tax prep. If you dont understand taxes its just not financially a good move to try and save a couple hundred dollars a year, especially if you find a CPA or EA that you can bounce ideas off of.

We may not disagree as much as it seems. And BTW, I agree self-prepared returns have way more errors.

But I guess my thought process is for simple returns is that it's hard for the preparer to charge a fee that lets him or her make a living wage while at the same time charge a low enough fee that the service creates value in excess of the fee for the customer.

It also strikes me that "simplicity" may be different for different folks. For your client, maybe a 1099-R crosses the line. BTW in my mind, anything that doesn't come on a standard form crosses the line.

[dogboyslim]

... I would not recommend H&R Block. ...

I agree with this one.  H&R Block charges by the form.  A few years ago I switched jobs and moved to a different state.  Because I had a ton of forms from the pension, 401k, roth 401k, and brokerage, they wanted to charge me $650.  This floored me, as many of the rules related to the changes I knew and had to tell the H&R Block "expert."  We got to the point that they'd entered everything and then gave me the total, I balked and said give me back my forms.  This person tried to tell me that since the forms had been entered I had to pay.  I asked to see a manager, explained that I had to inform their expert about things that would have been incorrect the way she was entering it, that their fee structure was ludicrous and that they hadn't filed on my behalf, luckily since it would be wrong, and there was no way I was going to pay them a dime for their service.  The manager finally relented.  I asked that she delete my file, and I watched as she did.  I will never go back.

BTW, if you meet the income requirements, you can have a VITA program do them for free.

[beastykato]

Paying a tax-prep place to do extensive data entry for you is going to cost.  I would not recommend H&R Block.

Most brokerages have a function that will let you download your sales in either CSV or spreadsheet format (and CSV can be turned into a spreadsheet by opening it up with a spreadsheet program such as Excel).  If you don't see this feature, contact your brokerage.  It looks like TaxAct uses a spreadsheet-style input for stock sales, and they do appear to have an import function (see list of relevant answers).  It will probably take some time to get a simple import/paste system working, but write down your steps for future reference and I'd bet you could have this done very quickly in future years.

Thanks for the tips I'll definitely look into it!  That would make life a whole lot simpler.  I don't recall how robinhood delivered my forms to me last year, but I'm sure someone here is familiar with them.  I wouldn't doubt that they do indeed send it in a spreadsheet format.  I just hope the import goes smoothly.  Sometimes from one program to another the formatting can get destroyed!

As for H&R block, yeah I didn't want to use them, I've seen how expensive they can be from friends and family using them in the past.   If this import function doesn't work for me and I'm sitting here for 2 hours importing individual stock transactions I might just break down lol.

[CareCPA]

... I would not recommend H&R Block. ...

I agree with this one.  H&R Block charges by the form.  A few years ago I switched jobs and moved to a different state.  Because I had a ton of forms from the pension, 401k, roth 401k, and brokerage, they wanted to charge me $650.  This floored me, as many of the rules related to the changes I knew and had to tell the H&R Block "expert."  We got to the point that they'd entered everything and then gave me the total, I balked and said give me back my forms.  This person tried to tell me that since the forms had been entered I had to pay.  I asked to see a manager, explained that I had to inform their expert about things that would have been incorrect the way she was entering it, that their fee structure was ludicrous and that they hadn't filed on my behalf, luckily since it would be wrong, and there was no way I was going to pay them a dime for their service.  The manager finally relented.  I asked that she delete my file, and I watched as she did.  I will never go back.

BTW, if you meet the income requirements, you can have a VITA program do them for free.

I am a huge fan of flat-fee or value-billing or whatever it is being called these days. I do not like charging/being charged by the hour or form (for anything, not just taxes). I would rather have the cost and expectations up front, and then decide if it is worth it to me. I do not like being surprised by a bill at the end.

[SeattleCPA]

... I would not recommend H&R Block. ...

I agree with this one.  H&R Block charges by the form.  A few years ago I switched jobs and moved to a different state.  Because I had a ton of forms from the pension, 401k, roth 401k, and brokerage, they wanted to charge me $650.  This floored me, as many of the rules related to the changes I knew and had to tell the H&R Block "expert."  We got to the point that they'd entered everything and then gave me the total, I balked and said give me back my forms.  This person tried to tell me that since the forms had been entered I had to pay.  I asked to see a manager, explained that I had to inform their expert about things that would have been incorrect the way she was entering it, that their fee structure was ludicrous and that they hadn't filed on my behalf, luckily since it would be wrong, and there was no way I was going to pay them a dime for their service.  The manager finally relented.  I asked that she delete my file, and I watched as she did.  I will never go back.

BTW, if you meet the income requirements, you can have a VITA program do them for free.

I am a huge fan of flat-fee or value-billing or whatever it is being called these days. I do not like charging/being charged by the hour or form (for anything, not just taxes). I would rather have the cost and expectations up front, and then decide if it is worth it to me. I do not like being surprised by a bill at the end.

Agree with "fixed fix" or value billing approach. An experienced tax preparer should be able to look at your stuff and give you a firm price. Then you know what things cost and can make an informed decision. No surprises.

[With This Herring]

Paying a tax-prep place to do extensive data entry for you is going to cost.  I would not recommend H&R Block.

Most brokerages have a function that will let you download your sales in either CSV or spreadsheet format (and CSV can be turned into a spreadsheet by opening it up with a spreadsheet program such as Excel).  If you don't see this feature, contact your brokerage.  It looks like TaxAct uses a spreadsheet-style input for stock sales, and they do appear to have an import function (see list of relevant answers).  It will probably take some time to get a simple import/paste system working, but write down your steps for future reference and I'd bet you could have this done very quickly in future years.

Thanks for the tips I'll definitely look into it!  That would make life a whole lot simpler.  I don't recall how robinhood delivered my forms to me last year, but I'm sure someone here is familiar with them.  I wouldn't doubt that they do indeed send it in a spreadsheet format.  I just hope the import goes smoothly.  Sometimes from one program to another the formatting can get destroyed!

As for H&R block, yeah I didn't want to use them, I've seen how expensive they can be from friends and family using them in the past.   If this import function doesn't work for me and I'm sitting here for 2 hours importing individual stock transactions I might just break down lol.

It looks like their default is to send you PDF tax forms, but you can get your trading history in Excel if you email them:
https://support.robinhood.com/hc/en-us/articles/210216743-Tax-Center

In some occasions, the cost basis generated on your 1099 might be incorrect. This can happen for a variety of reasons, such as a corporate action, reverse stock split, or wash sale. If this happens to you, reach out to us at support@robinhood.com to request an Excel file of your entire trading history from which you can calculate your correct cost basis.

... I would not recommend H&R Block. ...

I agree with this one.  H&R Block charges by the form.  A few years ago I switched jobs and moved to a different state.  Because I had a ton of forms from the pension, 401k, roth 401k, and brokerage, they wanted to charge me $650.  This floored me, as many of the rules related to the changes I knew and had to tell the H&R Block "expert."  We got to the point that they'd entered everything and then gave me the total, I balked and said give me back my forms.  This person tried to tell me that since the forms had been entered I had to pay.  I asked to see a manager, explained that I had to inform their expert about things that would have been incorrect the way she was entering it, that their fee structure was ludicrous and that they hadn't filed on my behalf, luckily since it would be wrong, and there was no way I was going to pay them a dime for their service.  The manager finally relented.  I asked that she delete my file, and I watched as she did.  I will never go back.

BTW, if you meet the income requirements, you can have a VITA program do them for free.

I am a huge fan of flat-fee or value-billing or whatever it is being called these days. I do not like charging/being charged by the hour or form (for anything, not just taxes). I would rather have the cost and expectations up front, and then decide if it is worth it to me. I do not like being surprised by a bill at the end.

Agree with "fixed fix" or value billing approach. An experienced tax preparer should be able to look at your stuff and give you a firm price. Then you know what things cost and can make an informed decision. No surprises.

A set price makes sense if the client has their paperwork together without too many forms missing.  OldFirm did have clients, however, who would bring in a big box of all the paperwork they received through the year (hundreds of brokerage statements, utility bills, school notices, car repair bills, etc.) that we would dig through to find that we had maybe 10 tax forms in the box and twice that many missing.  I am glad it wasn't my job to price those returns!

[Vilgan]

For the record, when I said something about $100 per return cost, I need to point out that's not what we charge. Our average 1040 return preparation fee is $1000 roughly. That $100 is what we pay the software company to use the high quality software that lets us do a complex return.

I'm curious what the "high quality software" is like to use for business returns :P I have always liked the personal return turbotax just fine, but now am a co owner in a business (s-corp crossing state lines, exactly what you say to avoid in your blogs!) and the business offering is horrid in comparison. I really like doing my own taxes so I understand everything and I find it interesting, but am sad at the clear inferiority of TurboTax Business. Would be fun to use Lacerte or ProConnect sometime to see how they compare.

Edit> just noticed the per return fee of ProConnect is cheaper than TT Business. Hrmm. Am I allowed to use this instead? Would I be crazy to? Playing with it now.

Edit2> Looks like we are not allowed to use. There are fewer helpers/wizards/quizzes to fill stuff out for you, but when you know what goes where this seems waaaaay easier/nicer to use. Not sure I'm actually in that category tho tbh, heh.

[Beardog]

... Now, to file, you probably want to efile.  You have options here - use commercial SW like TurboTax, etc., or use the fillable forms on the IRS site.  ...

The great state of Massachusetts also has free fillable forms and maybe other states do as well. 

My taxes are pretty simple and I find both the state and federal free fillable forms work fine for me.

[BabyShark]

My Dad's CPA did our taxes up until 2015.  My husband's father would do his for him.  When the CPA screwed up my 2014 taxes and suddenly in 2015 we were going to be MFJ, I decided that I would be doing our taxes.  I used TurboTax and last year seemed to work out fine, using it again this year, I do like that it keeps your data from the year before, it seems to make this go a little faster this time around.  Now if only my firm would send us our dang W2s...

[SeattleCPA]

I'm curious what the "high quality software" is like to use for business returns :P I have always liked the personal return turbotax just fine, but now am a co owner in a business (s-corp crossing state lines, exactly what you say to avoid in your blogs!) and the business offering is horrid in comparison. I really like doing my own taxes so I understand everything and I find it interesting, but am sad at the clear inferiority of TurboTax Business. Would be fun to use Lacerte or ProConnect sometime to see how they compare.

Some of the extra functionality that's built into a program like Lacerte, UltraTax or ProSystem FX (these are the three expensive programs that can have price per return amounts that can get pretty expensive) is for managing a lot of tax returns.

But other functionality really is more robust that the inexpensive tax software that some preparers use (ATX, Drake, etc) and the consumer tax software options like TurboTax. Some examples:

• Foreign entities like partnerships and corps and trusts and disregarded entities are supported...
• Multistate apportionment and allocation tools so you can really handle situations like your S corp has...
• Good sourcing of income to various states
• Good integration between modules, for example so K-1s from a multistate S corp or partnership flow mostly automatically into an individual taxpayer's return.
• Really robust diagnostics..
• Tons of training so preparers can really learn the system
• Reviewers tools so you can team up on a return

P.S. We use Lacerte and have used UltraTax as well as ATX.

[With This Herring]

Ooo, and nice business return programs have the ability to link a working trial balance in the engagement program to the tax return, auto-filling in the vast majority of the basic numbers (if the person who set up the trial balance groupings was any good).  This is especially great if you are stuck filling out an M-3 (schedule extended reconciliation between financial statement and taxable net income for companies that hit certain income/asset/ownership thresholds).

[SeattleCPA]

Ooo, and nice business return programs have the ability to link a working trial balance in the engagement program to the tax return, auto-filling in the vast majority of the basic numbers (if the person who set up the trial balance groupings was any good).  This is especially great if you are stuck filling out an M-3 (schedule extended reconciliation between financial statement and taxable net income for companies that hit certain income/asset/ownership thresholds).

:-)

[Nothlit]

... Now, to file, you probably want to efile.  You have options here - use commercial SW like TurboTax, etc., or use the fillable forms on the IRS site.  ...

The great state of Massachusetts also has free fillable forms

Not anymore. That is, if you're referring to the old (now discontinued) "WebFile for Income". They've replaced that with a new system called MassTaxConnect which no longer offers personal income tax filing.

[teen persuasion]

... Now, to file, you probably want to efile.  You have options here - use commercial SW like TurboTax, etc., or use the fillable forms on the IRS site.  ...

The great state of Massachusetts also has free fillable forms

Not anymore. That is, if you're referring to the old (now discontinued) "WebFile for Income". They've replaced that with a new system called MassTaxConnect which no longer offers personal income tax filing.

Yeah, it looks like NY also dropped its fillable forms this year.  I wasn't able to use them in past years, because only a small subset of forms were supported.  Anything related to kids, like college credits, EITC, CTC, etc weren't available.  And yet the state tax website claimed most residents could use the forms!  I was hoping they were ramping up the number of forms included each year - apparently not.

[With This Herring]

... Now, to file, you probably want to efile.  You have options here - use commercial SW like TurboTax, etc., or use the fillable forms on the IRS site.  ...

The great state of Massachusetts also has free fillable forms

Not anymore. That is, if you're referring to the old (now discontinued) "WebFile for Income". They've replaced that with a new system called MassTaxConnect which no longer offers personal income tax filing.

Yeah, it looks like NY also dropped its fillable forms this year.  I wasn't able to use them in past years, because only a small subset of forms were supported.  Anything related to kids, like college credits, EITC, CTC, etc weren't available.  And yet the state tax website claimed most residents could use the forms!  I was hoping they were ramping up the number of forms included each year - apparently not.

NYS has been REALLY pushing to get everything electronic.  It hit prep places first, and now it is hitting self-prepared returns.  I remember how annoyed clients were when we first had to tell them that NYS wouldn't let us paper-file their returns as they preferred, because NYS mandated that every prep service with over X returns had to efile.  Clients used to be able to sign a form to opt out, but I think that option is gone.

I'm not sure if this will help you, but NYS has links to free online filing for some taxpayers:
https://www.tax.ny.gov/pit/efile/default.htm

[BabyShark]

Now if only my firm would send us our dang W2s...

Just had to pop back and report that exactly one day after whining about not having my W2, my firm sent them out.  Maybe they're doing more monitoring on these work computers than I thought...

[Cpa Cat]

I would not recommend doing a return by hand. Too easy to make a mistake.

Most of the IRS' list of top tax return errors are related to hand-preparation.

Wrong or missing Social Security numbers.  Eliminated by tax software, as E-file will be rejected due to this error.

Wrong names.  Same as above. Eliminated by tax software.

Filing status errors.  Some people use the wrong filing status, such as Head of Household instead of Single. Usually, but not always eliminated by tax software.

Math mistakes.  Eliminated by tax software.

Errors in figuring credits or deductions.  Many filers make mistakes figuring their Earned Income Tax Credit, Child and Dependent Care Credit, and the standard deduction. If you’re not e-filing, follow the instructions carefully when figuring credits and deductions. Eliminated by tax software.

Wrong bank account numbers Not eliminated by software.

Forms not signed or dated.  Eliminated by tax software.

Electronic filing PIN errors.  Created by tax software.

This is the IRS' list. Enough people still prepare by hand that the majority of the most common errors are due to hand preparation.

[SeattleCPA]

I would not recommend doing a return by hand. Too easy to make a mistake.

Most of the IRS' list of top tax return errors are related to hand-preparation.

Wrong or missing Social Security numbers.  Eliminated by tax software, as E-file will be rejected due to this error.

Wrong names.  Same as above. Eliminated by tax software.

Filing status errors.  Some people use the wrong filing status, such as Head of Household instead of Single. Usually, but not always eliminated by tax software.

Math mistakes.  Eliminated by tax software.

Errors in figuring credits or deductions.  Many filers make mistakes figuring their Earned Income Tax Credit, Child and Dependent Care Credit, and the standard deduction. If you’re not e-filing, follow the instructions carefully when figuring credits and deductions. Eliminated by tax software.

Wrong bank account numbers Not eliminated by software.

Forms not signed or dated.  Eliminated by tax software.

Electronic filing PIN errors.  Created by tax software.

This is the IRS' list. Enough people still prepare by hand that the majority of the most common errors are due to hand preparation.

Thank you, CPA Cat, for the important additional data. Two thumbs up!

[teen persuasion]

... Now, to file, you probably want to efile.  You have options here - use commercial SW like TurboTax, etc., or use the fillable forms on the IRS site.  ...

The great state of Massachusetts also has free fillable forms

Not anymore. That is, if you're referring to the old (now discontinued) "WebFile for Income". They've replaced that with a new system called MassTaxConnect which no longer offers personal income tax filing.

Yeah, it looks like NY also dropped its fillable forms this year.  I wasn't able to use them in past years, because only a small subset of forms were supported.  Anything related to kids, like college credits, EITC, CTC, etc weren't available.  And yet the state tax website claimed most residents could use the forms!  I was hoping they were ramping up the number of forms included each year - apparently not.

NYS has been REALLY pushing to get everything electronic.  It hit prep places first, and now it is hitting self-prepared returns.  I remember how annoyed clients were when we first had to tell them that NYS wouldn't let us paper-file their returns as they preferred, because NYS mandated that every prep service with over X returns had to efile.  Clients used to be able to sign a form to opt out, but I think that option is gone.

I'm not sure if this will help you, but NYS has links to free online filing for some taxpayers:
https://www.tax.ny.gov/pit/efile/default.htm

Yep, I always get to free-file thru some SW or other.  I learned, the hard way, to go thru the state link, not the IRS link.  I just wish they wouldn't keep swapping the "approved" providers each year.  I used TT for years, and then it wasn't an option.  The available option I'd never heard of before, which didn't inspire confidence;  it turned out to be HRBlock in disguise, and was glitchy.  I started again with TT (not glitchy) but got frustrated when they wanted to charge me to file state.  Left it alone for a week or 2, tried to get HRB to show a correct return, then returned to TT (to compare and locate glitch).  Lo and behold, TT now let me file state for free, so I did it immediately!

Now I see TT is back, and HRB in disguise is gone (unless it has a new disguise).

We are STILL waiting to receive paper forms from the state, at my library.  Fed is dragging their feet, too, but I at least have some forms available.  It definitely feels like a ploy to force people to electronic filing, by not making paper forms accessible.

[SeattleCPA]

We are STILL waiting to receive paper forms from the state, at my library.  Fed is dragging their feet, too, but I at least have some forms available.  It definitely feels like a ploy to force people to electronic filing, by not making paper forms accessible.

The forms aren't *really* available via the software yet either. I.e., you can't print file-able forms yet with the software. Our software vendor says they'll begin to become available next week.

[Kl285528]

My credit union will do simpler returns for free or low cost. May be worth checking into, at least as another set of eyes

[TomTX]

So I'm in the business of preparing taxes... and you might think that would mean I'd suggest you go to paid preparer...

But actually I think you ought to try TurboTax or TaxCut... and then I think you keep your taxes simple enough that you can continue to DIY it.

BTW, if your taxes aren't simple enough to do yourself, my next suggestion would be to simplify them ASAP so you can do them yourself.

Here's a long, drawn out argument about why you should DIY in case you're interested...

http://evergreensmallbusiness.com/your-cpa-versus-turbotax/

Getting lots of 502 Bad Gateway errors on the site now.

[SeattleCPA]

Me too. I wonder what's up with that? Ugh.

I will check on Monday. Sorry.

[Beardog]

... Now, to file, you probably want to efile.  You have options here - use commercial SW like TurboTax, etc., or use the fillable forms on the IRS site.  ...

The great state of Massachusetts also has free fillable forms

Not anymore. That is, if you're referring to the old (now discontinued) "WebFile for Income". They've replaced that with a new system called MassTaxConnect which no longer offers personal income tax filing.

Too bad.  Thanks for the update, Nothlit.  However, it looks like I will qualify for at least one of the 'Free e-File Offers' through the state website.

[Carlin]

Thanks for the help everyone! Does anyone have an opinion regarding Credit Karma's free online tax service?   It's supposedly completely free.  I use CK to track my credit score, and I keep seeing ads for it.  It's it worth trying?

[mlr2016]

I'll throw TaxHawk into the mix.  Coming from a CPA firm, I used to have access to the company software.  Now that I'm in the Corporate world, I had to find my own software to use.  TaxHawk is pretty intuitive and does what I need it to do.  Then again, I know what my return should look like before I even put it in the software. 

For 2016, it looks like they are running a promotion and waiving the State e-filing fee ($14.99) for new users...  Federal e-filing is free.  So essentially, you can file your taxes for $0 out of pocket costs.

For returning users, I was sent a code for 25% off.  The $11.25 spent sure beats the costs of some of the other software providers out there.

https://www.taxhawk.com/