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Income Tax Preparation…

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My husband and I have always had fairly complicated taxes. Between a home purchase, car taxes, and lifetime learning credits for school, we have been unable to prepare our own since we married.

This year, our taxes have simplified a bit and I think we may be able to prepare them using tax software. I’ve never done this before and I’m a bit concerned about my abilities. Heck, I hardly trust myself to calculate the proper tip at a restaurant – and miscalculations of tips don’t generally result in jail time or huge fines.

But I’m motivated by one thing…

$6.65

Doesn’t seem like much… until I realized that is how much we pay our accountant per MINUTE to prepare our taxes. It adds up very quickly.

Suddenly, TurboTax for $53 on Amazon or $49 at Costco seems like a steal.

How do you prepare your taxes? Have you somehow managed to prepare them yourself without a Masters in Accounting?

What do we generally report? Mortgage/taxes, student loan interest, student books and fees, car registration, etc.


32 Comments

  • Reply Gina |

    It is easy! You can do it! I use TurboTax Deluxe. We itemize – house, cars, tuition, medical, business expense, stock/investments. I would be honored to help you (by phone – no detail info has to be shared) to walk you thru any screens you find difficult, but I doubt you will have any problems. They offer great support.

    Also, watch for deals. You can find it pretty cheap in mid-Feb thru Costco and others. Plus free State and sometimes e-file. You can print and mail it for free.

    I help my family members file and we share the cost of the software.

  • Reply Susan |

    We’ve been using turbotax. They walk you through things well – they ask you a question and the next screen depends on how you answered the previous screen. If you can deduct it, it will tell you. It can also go online and get the info you want for you…and then next year it remembers everything you did this year and goes and gets it for you. It’s a lot of work the first year but it gets easier. We have a child married filing jointly with a company and a trust. We do it all through turbotax. We used to use the family accountant until she flipped out during tax time and didn’t return phone calls until after 4/15. After we filed an extension (when we knew we were getting a refund),we never went back to her.

  • Reply Dubary Brea |

    I been doing my own and relatives taxes for the past three years using turbotax and I haven’t had any problems. They literally make it enjoyable to fill them out and very fast and easy.

  • Reply Dollar Bill |

    We’ve been using TurboTax for 10 years. Shoot, I did our taxes on our own when we first got married and I had only been living in the US for 3 months! TurboTax is insanely easy….we have a rental property, live in multiple states, go to college, have student loans, own cars, etc.
    In fact, it sounds like yours will be beyond easy!

  • Reply Bucksome |

    We used to use a CPA because my husband had lots of stock transactions and we had rental property.

    Since the rental property was sold a few years ago, I started preparing our returns with Taxcut. It’s really easy as they design it for the average person and it walks you through the process. Office Depot has a good deal where you can get a lot of programs free with the purchase of a tax program.

  • Reply Jen |

    Really? Only once have I ever had anyone else do our taxes. It’s not hard … and the software walks you through it. I usually get offers from H&R block to do it online for a reduced fee.

  • Reply SabbyAnn |

    I’ve always done our own taxes, using paper forms (I can’t bear to spend money on the software or for e-file). We’ve had education deductions & credits, sale of stocks, student loan interest, moving expenses, purchase of a home with susequent taxes/interest, self-employment income and lots more. It’s really not that complicated, you just have to follow the instructions step-by-step.

  • Reply DCS |

    If you’re adjusted gross is below a certain level, you can usually use some of the online tax prep stuff (TurboTax Online, H&R Block At Home, there are lots of them) to e-file your fed return for free. At least, you have been able to in previous years. I think last year the cutoff for free e-file was an adjusted gross below $56,000.

    The IRS web site says it will have this year’s info up on January 15th.

  • Reply Cynthia |

    I’ll just chime in with the choir here and say that we, too, use TurboTax online. And we have the range of deductions too – children, home, etc.

  • Reply M Denise C |

    I have used both Turbo Tax and Tax Cut (by H&R Block). I like them both about the same. I just go to Sam’s and buy the cheapest at the time. They are very user friendly and if I can figure these (I itemize), then anyone can. I was surprised to read you have been paying someone until now! I check, check, and doublecheck, too, because I certainly don’t want to leave any money on the table!

  • Reply Ponyryd |

    We have used TurboTax for years and it is easy as pie. I would agree with the other comments and add this to the mix. Once you have completed your taxes for this year using the software, compare the results to previous years done by your tax preparer, just to make sure you didn’t miss anything.

  • Reply My Frugal Miser |

    I’ve never paid someone else to do my taxes. I use TurboTax and find it relatively straightforward but time consuming.

    I like to think my taxes are more complicated than average. I own 7 rental properties in addition to my primary residence. I have capital gains (short and long term), dividends and interest, student loan interest, donations and other deductibles, etc. Dealing with depreciation, capital purchases versus repairs, mileage, etc. adds complexity, but as long as you keep meticulous records through the year (versus throwing everything in a shoebox), it should be a snap.

    Give it a try this year. Won’t it feel good to “pay yourself” instead of your accountant?

  • Reply Caitlin |

    I’ve used QuickTax for years. It’s incredibly simple. It’ll ask you a bunch of questions (such as “have you purchased a home this year” or “are you a student” and also allows you to add additional things it doesn’t ask you about. It leads you by the hand all the way through.

    I agree with Ponyryd in that an easy way to double check is to compare the software results with those by your accountant for last year. If you missed anything, it’s easy to add it in the software and generate new results.

  • Reply Jean |

    I use regular old pen and paper and then Turbo Tax to doublecheck mine, and then fill out the forms myself and mail it in. I’ve been doing it this way for about 6 years now. I do the same thing for one of my good friend’s who has a home, investments, etc as well. Never had a problem. In fact, one year, I realized I made a mistake and found $500 more in refund money due to Turbo Tax.
    Love it!

  • Reply Lynn |

    I have done mine by hand but like Jean always check them with Turbo tax or more recently TAX ACT. I actually took the H&R block tax course because I am a geek but tried using their software and it was horrible (and I discovered I could NEVER work for them either-what a scam!). 2 years ago I discovered TAX ACT and won’t go back to Turbo Tax. You can file your federal for free and then have to pay state to file electronically. So I would just do the state on the computer and fill the forms in myself (I have to file NJ and NY). You can do it – especially if you have previous years to look at. You can always ask a question on your blog too since it seems as if there are some of us that can answer your questions.

  • Reply CMG |

    I have used ACT Online for the last three years. The website address is actonline.com. You can e-file from the website. It is very reasonable.

  • Reply Janelle |

    We have used TurboTax Deluxe Online version for the past 5 years! All of our returns are right there and they update your account from year to year. Its easy – they walk you through every step. You can get added help if you need it. Its by far the way to go! Plus then you can submit them eletronically and generally get your return within 10 days. Try it! You’ll be hooked!

  • Reply Ladona |

    My mother has been using Turbo Tax for over ten years. Ever since her “professional accountant” made over $5,000 errors in taxes in a single return that she had to catch and correct.

    I have been using it myself for five years. Between the two of us, we have investments, rental properties, itemized deductions, a business, student loans, medical deductions, etc. Turbo Tax Deluxe takes care of it all.

    Not only that, but since you can efile several returns, I go in with my mother and grandmother on one program, and divide the costs. Takes a level of trust and cooperation (we put it on a laptop, then pass the laptop around when someone wants to work on taxes), but now it only costs $20 each.

    Have a friend or family member you can go in with?

  • Reply creditcardfree |

    You can do this! I agree with DCS to check the IRS website for a free option depending on your income level. I have used TurboTax and TaxCut, but prefer TaxAct online. It is less expensive and does a great job everytime!

    Let us know how it goes.

  • Reply Beckik |

    TurboTax will ask you all the right questions to make sure you don’t miss any deductions! good luck!

  • Reply Doug |

    Definitely use Tax Act online. Very simple… it walks you through everything step by step. Max cost is $20 (including state) and that is only if you upgrade to the deluxe version which stores your prior year returns and rolls forward all the data year to year.

  • Reply Beks |

    Holy Cow!! I feel so stupid for not using it before! ; ) Thanks for the help and encouragement. I feel more confident about doing it myself now.

  • Reply Mar |

    I’ve used Turbotax online for several years, including the year we bought a house, followed by the selling of our previous home a few weeks later but in the next year. No problems whatsoever except for an HSA (health savings account) issue one year. After 15 minuts or so of frustration, I checked their online message boards and found the answer. I also file electronically and had my state refund in 6 days last year (okay, so Maryland can do at least one thing right), which made the 11 days it took to get the federal refund seem so long – yep – had all my refunds in 11 days! I itemize and have the usual deductions (taxes, interest, charitable contributions, etc.) as well as interest earnings, etc. Seriously, it’s really simple.

  • Reply Dawn |

    I’ve used Taxslayer.com for 4 years now. I prepare our taxes as well as taxes for several friends. It’s simple and web based so there is no software to buy or upgrade to each year and it saves your information from year to year. The only thing you have to pay for is efiling.

  • Reply Bcello |

    I really enjoy reading your blog — I think it is very inspiring. I do want to provide a warning on TurboTax. I have been a user for years.

    To make a long story short — TurboTax miscalculated our Schedule A’s for both 2005 and 2008 — leading the IRS to reject our returns and disallowing our deductions (basically just mortgage interest and a few investments.) The IRS doesn’t explain ‘why’ they are rejecting your Schedule A — they just keep asking for a new copy– which we kept sending — and which they kept rejecting.

    Net result — fines and much misery. We have retained a CPA to fix the mess. If you want to use software — be aware it can make mistakes — check the math!

  • Reply InDebtAndHatingIt |

    I have used TurboTax for years. My ife used to go to H&R Block to get her taxes done (before we were maried) because she thought it was too complicated for her to do on her own. A few years ago When she got back from H&R Block and told me how much she paid them to do her taxes, I ran the same numbers through Turbo Tax and showed her the result was exactly the same. She never went back after that!

    But to BCello’s point, you have to be aware software is developed by human beings and their can and inevitably will be mistakes that can cost you if you’re not aware of them.

    I always fill out my tax information early, and then wait a few weeks and see if Turbo Tax has any sofgtware updates. I always install the updates before sending my taxes in hopes of getting as many of the bugs fixed as possible before making “my final answer”

  • Reply Lizzie |

    This is so interesting to read. We have always gone to a CPA and now after reading all of the comments I am considering trying it myself this year. Ours really isn’t that complicated and I’ve just hated paying $140+ for someone else to fill in a few lines on the computer!

  • Reply Mary |

    Turbotax online, LOVE IT. Even does my Schedule C for my business. Just don’t look at the upper left where it tells you how much you owe or get back to the very end, because it changes with each answer you put in.

    That totally freaks me out…

  • Reply Joe Dirt |

    TurboTax is what I use. And I do not think yoru taxes are strange enough to EVER pay anyone for their service.
    Do you have stocks, bonds, and low term investments? Have you shorted, covered and shorted again? Have you forgon the short term capital gain tax by 1 day?

    Mortgage, car, and education credits are “normal”.
    I lived overseas 1/2 of last year, now that would get complicated….

  • Reply Emily |

    I’ve been using TurboTax Deluxe for several years. Buying a house, student loan interest, investment activity, health savings accounts, no problem. It walks you through or you can jump around and enter what you want. Virtually no thinking required as long as you have all your documents ready. My one gripe is that they charge nearly $20 to file the state return so I think I will print that piece off and mail it in this year.

  • Reply Tax Man |

    The IRS e-flie system is now open, most W-2s and 1099s will be in mail in the next couple of weeks. Is everybody ready for tax time?

So, what do you think ?