Do you do your own taxes?

In My Humble Opinion
61

I’m from Norway. Its pretty automated here. You get a SMS when the tax office has your taxes calculated, then you can log in and make changes if you disagree with anything. They are usually pretty accurate and remember changes for next year, so a lot of people never bother with it. Personally, I got revenue streams from more than one country, so I always have to log in and enter them manually. Takes a couple of minutes, although it took more time the first time I had to do it.

UK taxes are more complicated, they are still on paper and you got to fill in forms yourself. They don’t allow well for non-residents with an income in the country, and once they issued me a penalty they later had to withdraw on appeal because they’d set up an unfulfillable condition.

62

Wait, when you folks in the US talk about e-filing: you have to pay to e-file?!? Am I understanding that correctly?

63

Nope, you have to pay if you want software to guide you through preparing your taxes as well as filling in the forms. If you just want to fill out the forms online by inputting the data yourself and file them on the IRS website, that’s free.

64

There is no way for an individual in the US to e-file their federal taxes directly with the IRS, you have to file through an authorized e-file provider. e-file providers are private businesses that are free to charge whatever they want for their services. Many of them provide free “teaser” services that advertise “free filing” hoping to get you to upgrade to a paid service or that tell you after you’ve spent an hour entering all your data “We see you had a $7 capital gain. You have to upgrade to our $95 premium package. Continue?”

In order to placate Congress, the Free File Alliance, which is sponsored by major (not some not-so-major) tax preparation firms has some token free-filing services which are listed on the IRS web site. The services are available to limited groups of people.

65

Can you please give me a link to the place on the IRS web site where you can do that?

And please don’t give me a link to the “Free File Fillable Forms” web site. It is an external link to a web site operated by the Free File Alliance, a private tax-industry group. It does not file directly with the IRS. If you don’t believe me, click on the Privacy Statement link at the bottom of the page.

66

Canadian - I have used StudioTax free software for the past 4 or 5 years to do my taxes. It usually takes about 15 minutes. A T4 or two, couple of charitable contributions receipts, enter a couple of fields and push the button. Refund in about 2 weeks.

Still waiting on this years tax receipts to see if I’ll need to cut the government a cheque this year. I work for a a company that consists of 3 operating companies and a holding company. As of January 1st, 2017, my payroll was moved from one of the operating companies to the holding company (I provide service to all three operating companies). This left a residue of vacation pay left in the operating company that was paid out but no tax was withheld because the payments were too small (totalled below the basic personal exemption amount). The residue wasn’t accounted for in the withholdings for my salary this year, but the donations I’ve made will hopefully offset it enough to bring my owing to below $0. In any case, the preview total without the receipts is under $200 as the rest of my finances is simple and the payroll processing company is pretty on the ball with the deductions.

-DF

67

I haven’t filed since 1991, when it was still possible for wage earners to do it. So maybe I have the distinction of never having paid a tax preparer.

Long ago, maybe the 60s, I remember filling out my tax form on a 3x8 inch punch card. That might have been in Canada.,

68

The disconnect here is that we’re talking about “doing your taxes,” which for the average person means calculating and filing your prior year tax return (or having someone do it for you.) how much you owe or how big your refund is is not part of “doing your taxes.” It’s a function of how many exemptions you put on your W-4 or how close your estimated quarterly payments were.

69

It cost $250, but they are filed. Even more forms required than we had anticipated. :rolleyes: More than we would have wished to spend, and a slight disappointment at feeling inadequate to performing this basic task, but well worth avoiding the unpleasantness and uncertainty. Pus, the guy says we are well situated for the upcoming year - no need to pay estimated taxes or change deductions.

70

Part of “doing your taxes” is, or should be, making decisions that will affect next year’s taxes, i.e., “Big Refund this year” = Decrease withholding for next year or “Owe Money” = Increase withholding for next year.

Again, biometricks complaint was about about her(?) refunds being too small, and she was sure the father-in-law was “doing” taxes incorrectly.

My point (that I should have made a LOT clearer) was that a retired accountant (her FIL) “doing” her taxes correctly would have been working to keep her refunds as small as possible from one year to the next.

71

I’ve been paying quarterlies for years … on the rare occasion I’ve been due a refund I just apply it to the next quarterly payment … I just like the idea that the IRS is watching for their mail everyday waiting for my check rather than the other way around …

72

Yeah, it makes me a bit crazy to give Uncle Sam free use of my money.

US Taxpayer: “Hey, I got a big refund this year!”
IRS: “WOOHOO! Free money!”

73

at any rate, I do my own. I’m sometimes amused that at my age and income, I still can use the 1040EZ (single, no dependents, renter, standard deduction, no non-401k investments.) The past several years I’ve ended up owing about $20-30, so I think I’ve got my withholding set right.

74

Nailed it!

75

I do our taxes, using TurboTax. My husband and I are relatively well-educated but I know people in our same boat who find the process more challenging. Our taxes aren’t too complicated; the usual deductions for property / state income taxes, the occasional stock sale.

Bear in mind, I’m a math geek so “making numbers make sense” is something I actually enjoy. Also, my mother was a tax accountant so I quite literally learned it as I was growing up (though of course laws have changed in the interim).

When we had multi-state income 25+ years back, I did have my mother look over our returns to make sure they were correct. When we had multi-state income about 20 years ago (when I was working in NYC), I did them myself, and that was a mistake = the Federal was fine but I messed up the out of state credit.

76

Yes, United States, EZ, H&R Block on-line for free. No state taxes on anything I earn. I have withholding set so I get ~$1000 back. I don’t mind the government using my money – I just assume it’s used for social programs I believe in. :slight_smile: And I donate the refund since it’s “found” money.

77

For the first 10 years I lived in Japan, I didn’t file a US return as I was making less than the foreign earned income exclusion and since Japanese taxes are a high or higher than US taxes then the tax credits would have ensured that I didn’t owe any US taxes, even had I not been eligible for the exclusion. Besides, it pissed me off that the US is one of only a few countries (such as North Korea) which makes its national pay taxes even though when they don’t live in the country.

However, I got a job working in Japan for a US company and started making more than the exclusion. I figured I would be on the radar so I better start filing. Since I needed to file returns some for previous years, and because it’s fairly complex, I went with a professional tax preparer. He advised filing one previous year and then that current year.

In addition to the 1040, citizens living abroad may need to file a Form 1116 for foreign tax credit and the Form 2555 for the exclusion. You need to report numbers from one form to another. Yuck.

I would have gladly continued to shell out the couple hundred dollars in fees except that the following year, he went to an income based fee(!), making mine more expensive and he did a horrible job.

In the first year I file, I still was below the exclusion because I had joined the company in the fall. The next year I had a whole year of the higher salary and was above the exclusion. You do get credit for foreign taxes paid, but Japan has a quirk where the local taxes are based on the previous year’s national taxes. Since my income had been less the previous year, I was still paying less local taxes and didn’t have as much taxes to be credited.

My (now ex-)wife is Japanese but did not have a US taxpayer identification number (TIN) which is used as a replacement for a SS number. Consequently he said I had to file as married filing separately, the highest tax rate, (which I believe is wrong).

Anyway, this meant that I had to pay $1,200 or so to the US. I grumbled to the preparer and asked if there wasn’t something that could be done. He told me to stop bitching “since you make a lot of money.” I really didn’t make a lot of money, but that’s besides the point.

On my own, I found out that we could apply for a TIN for my wife and then file an amended return. I did get my money back but the prepared charged me additional money to file that.

Screw that. I took the form and build an Excel file to make all of the calculations since the lines don’t really change from year to year. Once I had that, it didn’t take much to do the taxes. However, I got the shock of my life one year when I got a notice from the IRS that I owed something like $6,000 in taxes and penalties.

It seemed that the alternative minimum tax calculation was added or changed and I hadn’t noticed. They calculated my taxes with that, and showed that I owed a lot. Going over it carefully, I found that the IRS was only redoing the 1040 and not redoing the 1116 for foreign tax credit. The 1116 does not allow you to take more tax credit than you owe US taxes so any additional amount goes to zero. With the ALT, I would owe more US taxes so my 1116 amount would be increased. In the end, I didn’t owe any additional taxes or fines.

Japanese taxes are easy to file. If you work for a company, they file for you. There are fewer allowable deductions, so it’s a piece of cake. It’s really easy to file if you are self employed. They now have an online program which calculates your taxes.

My wife files my Taiwanese tax returns for me, since I don’t read Chinese.

78

I work on hundreds of people’s taxes every year. Well, this year and last year so far. I do the taxes for me and my mother using the firm’s software. They take a very short amount of time. Before I joined the firm and after I had started my accounting education, I used the Free Fillable Forms for Federal and typed into PDFs for the State. When I was doing it, FFF had a few restrictions that made it possible that you weren’t able to use it, but they were fairly arcane things like having 5 W-2 Box 12 amounts. I see maybe 3 of those a year. And if you weren’t high income there was a version that would hold your hand more. I didn’t use it to do mine because I needed the practice to do my mother’s the harder way. The second year I goofed up and forgot to put on the personal exemption for my mother. It was a pleasant surprise for her to get a check from the IRS for $1,000 a few months later.

The first year (last year) I did hers on the firm’s software, I forgot about her large capital loss carryover. This time the IRS wasn’t going to rescue us themselves, but I at least figured out the mistake fairly quickly. The problem was that we couldn’t find the previous year’s return to know the exact amount, nor even any of the supporting documentation to try to prove that the carryover should be $3,000 less than the year before by seeing no capital gain distributions on any of her 1099-DIVs (I think she only has cash in money markets outside of her retirement accounts, but I just take the forms and don’t ask). It wasn’t until 6 months later, after the October 15 deadline when things really quiet down at work, that I took the time to look through every single tax document I could in the closet and found them, right in a folder with the appropriate name, that we somehow overlooked probably it was inside another folder labeled with a different year. Anyway, by the time I file the amendment, it was over 6 months, so the IRS paid her a significant amount of interest on the money she was getting back - more than she earned in any other interest-bearing account. The IRS is quite generous with their interest rates, such that I began to wonder if we could pull the same “trick” again and get more interest than it would earn in a private bank account. Probably not going to do it though; seems a bit shady to do on purpose.

I’ll agree with many of the posters that accountants tend to charge way too much. I’d much rather not be working on simple 1040s most of the day during tax season, but those are big money-makers for the firm - not necessarily in dollar value, but in profit margin. We still probably make most of our money on returns of people have a legitimate reason to be coming to a CPA firm (I don’t know for sure; I’m just guessing), but certainly getting $300 for 15 minutes of my work, 5 minutes of the reviewer, and 5 minutes of the secretary is a pretty good deal, and people come back year after year. They just have absolutely no desire to do it themselves, and have enough money that what they pay us is irrelevant. I do feel for the people that could have gone to the VITA program I volunteered for one year I was in school, where we did for free simple (and a few not so simple) returns of lower-income people, and if we were their business advisers, we’d advise them to do so, but they intentionally engage us to do their taxes and that’s it. Our business clients we do actively advise to use a real payroll company instead of us, as it’s a bit of a pain for us, and we don’t take any new payroll clients, but continuing businesses that used us for payroll from prior years (I assumed they needed the volume of work more then) still insist on using us and pay more than they would with someone else. We even had to special order a W-2c form because the boss forgot he told a business owner who made a 401(k) contribution for himself that he’d take care of it on the W-2. Our software didn’t even handle printing on the right (pre-printed with red scannable ink) forms, so I had to fiddle with mostly blank Word documents to get the numbers to print in the right places, and since it was impossible to get perfect in the amount of time I had available, it ended up looking rather unprofessional. But at least those are only for the copies going to the IRS - we could print client copies on blank paper as normal.

79

I actually have no idea how long the other people in my office spend working on the returns that I do all the input for. Some of them, particularly ones that I point out incomplete information for, they probably spend significantly more time than others. But some of the ones we get multiple hundreds of dollars for just seem to require so little from us I have no idea why these people keep paying for it other than they’re just used to coming here and have no idea how easy it would be to do themselves or how much less expensive it would be at a more mass-market place than an office with a few CPAs who mostly deal with people who run businesses.

80

Did them myself until 1998 and from 2008-2016. Starting in 1999 I had to file self-employment and estimated taxes and claiming expenses but by 08 was back to single-source income and able to retake doing them myself. Other than gathering the documentation I usually could dedicate a few hours to filling the forms. In 2017 I began having interstate-source incomes again and I’ve gone back to handing it to a professional this season if only to make sure I have an example of how they’re done right under the new set-up.

1980s-1992 resident in a US state with local income tax
1993-2017 resident in Puerto Rico where if all my earned income is from a local source I only have to file the Federal forms when I’m self-employed