Help with taxes without hiring an accountant?

[chickenstick]

Hey folks, I'm doing my taxes this year. I've hired them out for the last few years, but this year I want to learn to do it and mine are pretty straightforward. Also I'd rather not shell out $600 if I don't have to.

I want a second pair of eyes to look over what I'm doing. What's the best way of getting a second pair of eyes without hiring an accountant?

[FrugalFisherman10]

You could try using one of the tax softwares like turbotax or freetaxusa, and pay for the premium offering where you can chat with them. That would allow you to "do it yourself"  but get you some assistance / oversight, and be cheaper than $600.

[MustacheAndaHalf]

Peeking at your post history for some context, I see you're thinking of ending an LLC and turning it back into a hobby.  A profitable business turned back into a hobby sounds suspicious to me - and I think the IRS would find it suspect as well.  You might want to ask a tax attorney about your plan to unwind the LLC and use personal accounts for the hobby.

In the past, it sounds like a CPA filled out your taxes.  I'd suggest getting/buying tax software, and running this year and prior years through it.  Compare the tax software with the forms filled in by your CPA (who probably uses more expensive tax software, themselves).  Then you can get a sense of the differences, if any.

[chickenstick]

I'm only really thinking of closing the LLC if it truly makes things more complex than having a Sole Proprietorship. @SeattleCPA mentioned that owning a business makes taxes complex, then later agreed that an LLC is no more complex than a Sole Proprietorship, so I may leave it after all.

Either way, I'm getting the impression that the best way of learning here is to meticulously compare professionally-prepared tax documentation with my own DIY efforts as a sort of deliberate practice.

[Ron Scott]

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I'm getting the impression that the best way of learning here is to meticulously compare professionally-prepared tax documentation with my own DIY efforts as a sort of deliberate practice.

That’s a good approach IMO. Do it yourself and send it to a pro. Compare them and ask questions about the differences.

My situation is complex and I use an accounting firm now. But I do my mother’s,

[SeattleCPA]

I'm only really thinking of closing the LLC if it truly makes things more complex than having a Sole Proprietorship. @SeattleCPA mentioned that owning a business makes taxes complex,<snip>

That's true. With a business, you have to have an accounting system. Issue 1099s. Maybe do W-2s if you've got employees. You may need to deal with sales taxes. File in multiple jurisdictions. You'll probably have assets to depreciate. Lots and lots of stuff that is way more complicated that someone with a W-2.

then later agreed that an LLC is no more complex than a Sole Proprietorship, so I may leave it after all.

Unless it makes an election to use another classification--like an S corporation classification--a simple member LLC that operates a trade or business is disregarded. Thus it *is* a sole proprietorship. A sole proprietorship is way easier to handle than an S corporation though. That was the point, I think, of the comment you reference. Consider the page counts of the tax forms. A Schedule C form used to report a sole proprietor's activity to the IRS is basically two pages. The 1120S form used to report an S corporation's activity is at least six pages and probably longer.

Either way, I'm getting the impression that the best way of learning here is to meticulously compare professionally-prepared tax documentation with my own DIY efforts as a sort of deliberate practice.

For what it's worth, if I was looking at the different areas of accounting and finance that might help me with better managing and understanding my business? Or my finances? Tax would be way down the list.

I'd recommend a small business really learn the nuts and bolts of bookkeeping and general accounting first. That'll mean she or he has good timely data for managing the business. And then after that, and building on that data, I'd learn about how to do financial analysis (so capital expenditure analysis stuff like IRR calculations and NPV calculations) so I could optimize stuff in my business.

In college, the above subjects get covered in the first two "principles of accounting" classes and then the 300-level corporate finance class. Surely there are online versions of these things. Probably free even?

[Chris Pascale]

If you think the skill of filing is worth more than $600, or that $600 is worth more the assured-ness (edited to fix this typo) that comes with a good CPA, go for it.

I would never file my own taxes, but not for a lack of ability*; I just don't want to.

      *I have an accounting background and have done tax filings for individuals and businesses.

[Finances_With_Purpose]

If you think the skill of filing is worth more than $600, or that $600 is worth more the absurdness that comes with a good CPA, go for it.

I would never file my own taxes, but not for a lack of ability*; I just don't want to.

      *I have an accounting background and have done tax filings for individuals and businesses.

I'm with you on that.  My accountant returns value and saves time.  We had a few simple years, but she more than makes up for it in the messy years, especially with Schedule Cs and other things. 

[Tucandream]

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I'm getting the impression that the best way of learning here is to meticulously compare professionally-prepared tax documentation with my own DIY efforts as a sort of deliberate practice.

That’s a good approach IMO. Do it yourself and send it to a pro. Compare them and ask questions about the differences.

A good way to really piss off your accountant. I'm a CPA, I prepare taxes. I try to educate people year around, but if you start asking me nit-picking questions about where a number comes from during tax season because it doesn't match yours, I'll be somewhat annoyed (understatement).  My billing is prepared on preparing the return, not "educating you" and teaching you how to prepare taxes.  Now if you're happy to pay my hourly rate on top of the tax prep fee, I might consider it.

A better solution would be to see if you can find an accountant who is willing to review your return or use one of the review services offered by many software sellers.

[Chris Pascale]

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I'm getting the impression that the best way of learning here is to meticulously compare professionally-prepared tax documentation with my own DIY efforts as a sort of deliberate practice.

That’s a good approach IMO. Do it yourself and send it to a pro. Compare them and ask questions about the differences.

A good way to really piss off your accountant.

I see you have another post offering to pay someone to teach you how to do your taxes. A great way to go, and for the price of what it would cost to do them, would bring some nice savings.

Have you thought of going to a local university and seeing if they have a free tax or tax law service?