A Surprising Change to our Debt…

I am nearly finished with our taxes. We are waiting on two more forms to arrive in the mail before we can finalize the forms.

I spent about an hour compiling information and completing forms in the tax software. It was far easier than I expected and I am a bit perturbed at how difficult our accountant made us think it was and more importantly… how much he charged us to do it.

It’s upsetting to me how many hundreds of dollars we have wasted in the past for something so terribly simple.

Don’t tell my husband but… I actually enjoyed doing it. The chronic organizer/obsessive compulsive in me loved the structure and numbers. My husband offered to do the dishes for a week if I took care of the taxes. If he finds out I actually enjoyed it, I’m on KP duty again so… shhh!

So far, the results are going to make a change to our debt. We can’t finalize anything until mid-week but as it stands now, it’s a far different number than we were expecting.

More? Less? Are we going to have to pull out our credit card to pay the tax due or are we getting some cash back?

I guess you’ll have to wait and see…

Posted by Beks on January 31, 2010 at 9:32 PM in taxes | 9 Comments »
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Angie responded:
Posted: February 1st, 2010 at 12:21 am
I’m guessing since it was so enjoyable, you’re getting something back.
Jen responded:
Posted: February 1st, 2010 at 10:21 am
My mom’s a CPA, so I feel like I need to defend the profession Unless your finances are super simple, a CPA is helpful because he or she can catch deductions you might miss, as well as extra taxes you might miss. Not that anyone wants to pay more taxes, but better to pay now than to get hit with backtaxes and fines and interest Plus, if you get audited your CPA will accompany you to the audit and help you out.

As for his fee, I don’t know what the going rate is, but like paying a doctor or lawyer, you are buying the person’s expertise. A CPAs “cost” includes their accounting degree(s), plus the certification exam, plus the continuing education requirements, in addition to all the professional fees (like remaining a member of CPA organizations), tax software, and research (if a client has an unusal situation, my mom will have to research it to see how it’s supposed to be handled). This research might include staying on hold for hours with the IRS, and I think we all agree whoever does that for should be compensated…

Of course, not all CPAs are good, so maybe this guy was just being alarmist and gouging you
mikey responded:
Posted: February 1st, 2010 at 3:21 pm
Mum’s the word.
Bcello responded:
Posted: February 1st, 2010 at 9:49 pm
When i used TurboTax it felt almost like a game…watching the ‘Owe/Don’t Owe’ calculations shift back and forth. I have to go with Jen on this one though –I and a number of my friends have gone back to CPAs. As part of our ‘Repair the TurboTax Damage Project’ we have had a couple of ‘TurboTax’ returns ‘re-filed’ and we had not taken advantage of substantial deductions. Instead of owing, we got refunds!

It is probably too expensive — but I would be interested to see you re-ran your taxes on TurboTax for last year’s CPA return — if your 2008 CPA prepared return and your TurboTax 2008 matched? That would be an interesting test.
Steve responded:
Posted: February 2nd, 2010 at 1:39 am
I have done our taxes yearly since 1975. Going from paper to the computer has been very helpful. I even tried to take a tax class once. I am a numbers type of guy and enjoy the job of doing them. I don’t think I could ever have a tax accountant do mine. When I was in College I was taking accounting so I did start in that direction. Ran out of money and couldn’t complete that education. I do have a lot of respect for those individuals that do taxes. There are a lot of changes yearly and they have to keep up with them.
Abigail responded:
Posted: February 2nd, 2010 at 3:41 pm
I totally get it. I have a weird enjoyment of doing taxes too. I need to go ahead and officially take a course. Then I may start selling my services (at tax prep, don’t look at me like that!) next year.
Mrs. Money responded:
Posted: February 3rd, 2010 at 7:34 pm
I’m voting for money back!
Karen Foster responded:
Posted: February 4th, 2010 at 8:48 am
As a CPA, former tax preparer for a large “green” square company, and now stay at home mom running a money saving site I can see both sides of the story. My perspective is….if nothing BIG changed from your tax situation from the prior year….you can use an online/software service to do your taxes.

Make sure to print off a copy of the form for the current year and compare it to the prior year to check. The only risk is of course you can miss out on current year tax law changes. But don’t rule out just calling a CPA/Tax Prep companies and asking for free advice.

Now, if you did have “BIG” changes….and I mean things like
1. Adopted a special needs child
2. Started a business
3. Installed $14,000 worth of energy efficient windows/insulation/concrete (j/k)
4. Sold a TON of securities in a TAXABLE account (meaning outside your 401k or IRA) which can be tricky with what “Basis” you had in the stocks
5. Bought/sold a house – especially with the tax credits available
6. Filed bankruptcy
etc

Then I would recommend having someone help you this year and then next year possibly doing it yourself.
Hope this helps
Karen
ps – I use http://www.taxact.com as the Federal return is free
Mrs. Accountability responded:
Posted: February 4th, 2010 at 10:25 am
I enjoy doing taxes, but I am also realizing the benefit of having a “professional” take a look to make sure I didn’t miss anything important. I am also leery of the Turbo Tax/HR Block programs… but I do use them after reading through all the tax information carefully.