It’s that time of year again and the tax documents will start filling your mailbox in a matter of weeks. That means you will need to begin thinking about your tax return. It isn’t the most exciting chore in the world, but it’s something that just becomes part of our annual routine after a while. That sort of leads me to today’s poll question. Most of us started out using a particular method and it just became habit. I know some older people who still do their taxes by hand with just a pen, some paper, and a calculator! Even with all of the great computer programs available they are still comfortable doing it the long way.
I know the same has been true for me over the years. Since college I was always one to just use TurboTax. I was computer savvy so I had no problem using the computer to punch in some numbers. Not only that, but over the years you could build up an electronic history of past returns so it made it easy to go back and print off a completed return if you needed to. But getting into habits can actually become costly. I spoke just the other week about determining when it’s time to hire a CPA to do your taxes. A lot of people are afraid to make this jump because they feel like they have a handle on their tax situation and fear the added cost that hiring a professional entails. Well, that may be true, but some circumstances can still warrant professional help and that small fee you pay may end up being nothing compared to the savings they find.
So, I’m curious to see how others are filing their taxes these days. Have you been using the same method for years, or did you just switch it up? And why do you prepare your taxes the way that you do? Are there advantages or disadvantages that you’ve encountered?
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.
I have done taxes myself, used turbo tax with it's endless mindless questions and gone to an CPA. The CPA pays for herself 10 X over. Turbo tax in the past missed so many deductions I would never even consider it again.
Some of the non-refundable credit carry forward into future years. The adoption credit is a good example. It is frequently so big that people don't benefit from it all in the first year
While doing the very basic of tax returns may be easy to do with the computer tax packages- anything out of the ordinary may actually cost you much more by doing your own taxes as opposed to engaging a CPA or EA. A credentialed person attends hours and hours of continuing education to keep up on the latest applications- there has to be a reason. For more on this issue, see http://www.chestnutblog.com/retiment-finance/year-end-business-tax-and-retirement-planning/
I've been using tax prep software for 4 or 5 years now, maybe more, but I expect my return will be more complicated this year than in the past, having earned some side and freelance income. May have to hit up my brother (a CPA) this year for some assistance, but I am going to try to do it myself.
Because my taxes are pretty simple right now, I only need to use an electronic services. But once it gets complicated, i would probably have to go to a CPA.
@Tracaitim – I've used many retail tax preparation programs and Studio Tax is pretty good.
Being an accountant I prepare my taxes manually and through the software.
I live and own a home in one state in which I also co-own a business but my primary income comes from another state. It would be really expensive to hire an accountant with all those entities so I do them myself. The first couple of years were really stressful and I barely beat the April 15th deadline, but now I have my system and flowchart and it isn't so painful anymore.
My sister is a CPA. She does my taxes and in return I take her out for dinner.
She actually is an accountant for a large company and just does taxes on the side to make a little extra money. Finding someone you work with to do your taxes may save you money if yours are getting to complicated to do on your own.
I have used TaxAct in the past but most recently have been using TurboTax. I like that my old information is imported each year.
I used to be old school, doing it myself with paper, but three years I did the LLC thing, started investment accounts and generally became more complex financially. So now it's all about the accountant.