Why or why not? What country do you live in? If you do them, how long does it take? If you pay to have them done, how much does it cost? Do you think you should be able to do your own taxes given your intelligence/education/training?
We live in the US and are paying to have ours done for the 2d time ever. (The last time, we had income from 2 different states, which made our taxes VERY complicated.) Our investments/income are not overly complex, but they require multiple schedules and such. My wife does the heavy lifting on our taxes, and estimated it would take her 5-6 hours to do them and figure she understood them well. Whereas we can have them done for $150-200. TurboTax would cost close to that. We find the push to e-filing makes it more difficult to flip back and forth between the various forms and instructions (a complaint I often have about electronic vs print.)
We are both lawyers, and have not intentionally complicated our investments to avoid tax liability, tho we have diversified upon advice. Total income between $100-200k. Strikes me as ridiculous that we should not feel comfortable doing our own taxes. Hell, not even sure what my withholding for this year ought to be… :rolleyes:
I do mine via software. I used to have a family friend do it but he was charging more than I felt was worth it. That’s no ding on him; he deserves to get paid for his time but when it’s a simple 1040 and you’re getting $60 back and paying the tax preparer $120, you start thinking there’s got to be a better way.
By around March, you can find deals on tax software (I use H&R Block) for $15 for Fed+State which hits my price point just fine.
I do them myself. I live in the US. My wife and I make about 120k a year. She’s self-employed, so those forms are a pain, but not horrible. We don’t do a lot of itemizing other than for her business, but it’s a simple business, she’s an at-home occupational therapist, so largely it’s just mileage, random office supplies, insurance and licensure requirements, nothing particularly crazy. Takes me an afternoon to do state and federal, but at least a third of the time it’s checking the numbers over to make sure I don’t get an audit. Like you said, the hardest years are when you move between states. Last time we did it, both states required us to pay full taxes on our complete income to them (It was strange because we had gotten married, so my wife had spent 7 months as a resident of the first state, so they considered her a resident since she resided over half of the year there and demanded her taxes. As soon as she married, she obtained my residency, so the second state considered her a resident because she was a legal resident at the end of the year so they also demanded taxes on the full income, but the second state said they would allow us to deduct the portion of income we paid to the first state, but could only do so after submitting taxes to the first state and getting a receipt from their tax department. This though would put us past the deadline and we would owe penalties, so they told us to submit the whole amount and then file an amendment after the fact. Regardless, it was a freaking pain and I digress.) It was illogical and ridiculous and I explained that, but honestly I think it was a governmental scam to double dip and figure you’re not going to bother fighting it. Anyway, bottom line is that I do our taxes, they don’t take that long, I could probably spend the money and get someone to do them, but I’d rather spend the 200 bucks on a weekend trip somewhere rather than have someone do something I can do myself.
My wife and I are engineers but we’ve got three business as well as two day jobs. I’ve paid a CPA for years to take care of it. It costs about a grand a year but then I get free tax advice the rest of the year. This year it looks like I’ll be starting at least two new ventures so it’s worth every penny to me.
I figure that people pay me for my expertise so I don’t have trouble paying someone else for their expertise. Sure your average lawyer could probably figure out the building codes and design a building to code but that doesn’t mean they shouldn’t hire me to do it in half the time. I could figure out the tax laws and forms but I’d rather work those same hours and get paid my rate while paying the accountant her rate for spending half the time I come out ahead each year.
My father-in-law (a retired accountant) insists on doing our taxes, but our refunds are always much lower than I’m expecting. I’d like to go over them to double-check the accuracy, but he ambushes me with a pen and tells me to sign the forms so that he can mail them without giving me an opportunity to review the numbers. I’m afraid of him and sign it. I’m 90% sure he’s doing them wrong.
You owe it to yourself to double check the figures. It might be worth it to take it to a CPA or other tax expert and have them double check your last few returns. Better to catch any mistakes now and get them fixed rather than waiting for a certified letter from the IRS.
Re: the OP. My wife and I have laughably simple taxes because we’re paupers. We have simple W2 income. I could probably do them on paper, but we claim the child tax credit and I’m a grad student so have a 1098-T to input. It’s easier for me to do it all on software. I’ve used H&R Block for years; it’s worth it to pay the $15 or so rather than do the calculations by hand.
You can have an independent person review what you filed and submit a correction form after the fact.I think it’s a 1040X. I’m not sure how many years you can go back, but it’s a few.
We use a firm to do our taxes. We live in the US, but for a long time we lived overseas which made our taxes complicated. When we moved back to the states we kept using the firm because we were happy with the service and found the price reasonable.
I think that is a tad simplistic, as it can be very confusing to ensure that sufficient taxes are withheld. We currently have to decide whether to tweak our withholdings or estimate quarterly - neither entirely clearcut. I agree that LARGE refunds are simply giving the gov’t an interest-free loan. But if you can explain how you hit your tax liability on the dot, I’d love to hear.
US resident, I do the taxes for me and my wife. I use H&R Block’s software, costs about $30. Takes me a few hours. Our tax picture isn’t terribly complicated: two incomes, a mortgage, some mutual fund investments that generate dividends, plus a small self-employment gig that requires filling out Schedule C. I have a Ph.D. in mechanical engineering, so I’m fairly good with numbers and would feel lazy paying someone else to do this for us.
You’d have to be prescient in order to have your withholdings exactly match how much taxes you owe. This is especially true if you’ve got a lot of investments: the dividends they pay out over the year fluctuate with the economy. If you get a gigantic refund, you’ve basically been giving the IRS an interest-free loan, which is not smart; I’d rather have my money sitting in a mutual fund making money for me than sitting in the IRS’s fault. If you don’t know beforehand how much taxes you will owe, the smart bet is to adjust your withholdings so that you end up with an amount equal to what last year’s taxes were. If your taxes end up being higher, you’ll have to pay up by tax day, but you won’t owe a penalty.
I use one of the free online services-- I don’t know if that counts as doing it myself or not.
I used to do it by hand, with paper and pencil, but the first year I did it online, it ended up making a difference of about $300 due to a bunch of deductions/exemptions/credits/whatevers that I didn’t know about (mostly related to education). And doing it online is a lot easier and less time consuming. When you pay me 300 bucks to do something the easy way, I’ll do it the easy way.
I own/run a business, yet have no interest in the business side of the business. I have an business manager who handles the day to day stuff, and an accountant for the heavy work.
No, I never hit taxes on the dot. Yeah, the statement about getting no refund or owing nothing was simplistic, but that’s what a US taxpayer should strive for.
I was addressing biometricks complaint about refunds being too small.
I do my own with $40 tax software. It takes me about 90 minutes to enter my tax information into the computer, then another 90 minutes of obsessively checking whether I included all the relevant tax documents. Paying someone wouldn’t really reduce this time since the most of it is making sure that I have all the information in the tax file.
You could spend $40 on tax software and just enter the same information you give him and see if it comes to the same result. If not, ask him nicely to explain the difference or just file an amended return.
Brit here. I do my own taxes. Self-assessment is done online and doesn’t take long. The longest bit is sorting out my foreign investments. Foreign incomes have to be entered by country, not individually. I do it in an hour or two (depending upon the complexity of foreign income) one day and review it the next before submitting it.