With tax time upon us, you have probably either already filed, completed, or at least started thinking about your taxes. But, how do you prepare your taxes? Do you stick to the traditional method of filling out the paper forms by hand, or do you rely on the assistance of a software program? Or maybe you don’t even want to be bothered with it and let someone else do it for you. Whatever the case may be, there are a lot of options available, and it is interesting to see why people choose one method over the others.
In my situation, I used TaxCut Online for the second straight year. I like the ability to easily hop on a computer and fire up their website without having to download any software. This provides flexibility to work on my taxes from any computer I happen to be using. We seriously considered getting an accountant this year since our tax situation was becoming a bit more complicated, but after doing my return for free online to see what we’d owe, it was unlikely that any deductions that a professional could find would be enough to offset the added expense, so it was a wash. Next year, I think it may be time to hire the work out. So, how do you prepare your taxes, and why?
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.
My corporate taxes are done by a CPA, but my personal ones go through H&R Block Online. I'd love a service that allowed the user to just fill in the appropriate lines on the 1040 and other forms and e-file them (I've been doing my own taxes since I was 14, and the stupid "wizards" just annoy me), but no such service exists, and I'm not willing to wait for the snails to deliver paper forms.
I've been working with an accountant who I know from a previous job. She is great at getting me extensions when I fail to get my paperwork together in time. She still needs to bill me for the last two years as well - come on Sue!
I work with Bruce Huie on getting the word out about VaultStreet. I'm hoping to get my financial record keeping (and life) organized online. Maybe I won't need the extension this year!
I just want to completely go paperless at tax prep season without the current burden of a web login for a bank or brokerage, navigate to the statements page at my financial institutions and download documents - one at a time. I've got better things to do then download documents, think about file names and categorize the downloaded documents on my PC hard drive. This makes no sense to me. Give me a convenient way to do this, communicate with my tax accountant located in Boston and I live in San Francisco and you've got my attention.
One service just recently launched is VaultStreet - www.vaultstreet.com. It connects to multiple financial institutions in banking and brokerage industries. Then, it allows me to share documents with my tax accountant. It takes me too long ... not a good use of my time. I like it when someone else does this for me.
My cousin helps me out with taxes, but there certainly are a lot of free or almost free options nowadays.
For the past couple years, I used to do taxes by myself until I started a LLC, bought a house, etc. I just took too muchof my time, so I decided to just get an accountant. I think it's well worth the money!
I tried TaxCut Online, Tango, and TurboTax this year. My favorite is actually TurboTax, so that's how I'll be filing. Of course, this wouldn't have been possible without you, so thanks!
That is a good point, FM. Most of our significant tax/income changes came at the end of 2007, so it was already too late to really get much advice from an accountant for the 07 tax year, but I can already see many areas right now that I'd like to have some additional advice on for 2008.
But you're right, getting the information ahead of time and being able to plan for and make adjustments before you prepare your return can be well worth the added cost, and then some.
I've used a CPA for the last two years and have been quite satisfied. I'm sure I could do the actual return myself with some tax prep software, but it's being able to ask all the questions I want and get specific advice throughout the year that's invaluable. It's better to find out the best way to handle some situation at the time rather than months later during tax season.