The Money Mustache Community
Learning, Sharing, and Teaching => Taxes => Topic started by: RedwoodDreams on November 19, 2016, 07:28:21 PM
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Hi all -- I've always done our fairly straightforward taxes myself and by hand. 1040 + Schedule A.
However, this year is trickier. Because of unfortunate health issues, this year our household will have combined income from the following sources:
- Regular income (wages)
- Long term disability (Metlife)
- Short term disability (state of CA)
- SSDI (kicking in very soon, including a chunk of back pay)
These all seem to be taxed differently--some subject to federal or state taxes, while others are subject to state but not federal (and vice versa).
Because I've never used tax prep software such as TurboTax, I'm not sure it can step me through identifying different types of disability income and calculate taxes correctly. I'm considering going to an accountant this year, because then I can see how it's done for next year, but what would you recommend?
If it's a prep program, which one do you recommend? I'm hoping it's the tax prep program because ideally I'd like to play around with it this year to see if we can maximize deductions so our medical expenses can be itemized as well.
Bonus question: Do disability payment sources send you the equivalent of a 1099 or w2 at the end of the year to show what you received, taxes paid, etc., or are you on your own figuring that one out?
Thanks in advance!
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Before spending money, why don't you try it by hand first? You can also use the "free" online services that are "free" as long as you don't e-file (and some might really be free for you).
Try the thrifty approach first.
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OK, so I am a tax accountant and I make a living preparing taxes for people. So you might think I'd be inclined to suggest you "outsource" this task...
HOWEVER, because all of your income items will get reported on an informational form--like a W-2 or a 1099--I think you can probably rather easily prepare your return yourself using a product like TurboTax.
For a more detailed discussion of my reasoning, you might want to look at this blog post we did for our CPA firm where we argue most people should go the TurboTax route:
http://evergreensmallbusiness.com/your-cpa-versus-turbotax/
But the general situation is that if you're getting a form from your former employer, the state, or Metlife and that form describes the income, you'll easily handle the accounting with TurboTax. Or anything like TurboTax.
P.S. Sorry about your year.
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Big thanks to both of you for responses. I didn't realize I'd receive tax documents for all those payers, so you're right that that should make it fairly straightforward.
SeattleCPA, I like the article and the Thanksgiving article. :-)
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SeattleCPA, I like the article and the Thanksgiving article. :-)
Thank you. Enjoy the holiday! :-)