Should I Do My Own Taxes Or Pay A CPA $500?

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midareff
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by midareff » Wed Jan 31, 2018 12:57 pm

I share the cost of Turbo Premier with a friend. He keeps the software and does some tax work for some of his law clients and for my half I give him all the data that needs input and he inputs it when he has time. Already e filed and confirmed.

Countermoon
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by Countermoon » Wed Jan 31, 2018 1:12 pm

I used FreeTaxUSA this year for the first time. Federal is free if you're filing a 1040 with itemized deductions. State is something like $12. It's the best deal out there and should get you the exact same result as the more expensive alternatives (TT, H&R Block).

If you use the search function you'll see that a lot of other BH posters have switched to FreeTaxUSA.

bloom2708
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by bloom2708 » Wed Jan 31, 2018 1:17 pm

Afty wrote:
Wed Jan 31, 2018 12:53 pm
bloom2708 wrote:
Wed Jan 31, 2018 12:38 pm
For those that pay $300 or $500 or more to have someone else do your taxes, how do you ensure it is done correctly?

One year I paid a very highly recommended firm $350 to do our taxes. I had to gather all the information. Get it in order.

Then I had to double check everything. They made glaring mistakes. Left items out. Consolidated and took shortcuts that made it harder to verify.

I felt like an idiot who had been take for $350. Several co-workers use this same company. They handed over $350 and went out to eat. I have no idea how some company with some papers can understand your situation unless it is very very simple.

Meh. I'll keep doing it myself until something super complex comes along. At that point I'll ask this wise group for sage advice. :wink:
I've had the same experience -- I had to double check the CPAs work, and usually I would find at least one thing wrong, sometimes seriously wrong. Another reason I started doing it myself.
That tax year was by far the most stressful I've had and it cost me $350 which was just a kick to the shin. Ha ha. :annoyed

I know some have very complex, multi-state, multiple corp, K-1 nightmares that require a good CPA. For the average "normal" return, try to do it yourself.
Where to spend your time: | 1. You completely control <--spend your time here! | 2. You partially control <--spend your time here! | 3. You have no control <--spend no time here!

seamonkey
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by seamonkey » Wed Jan 31, 2018 1:20 pm

IRS Free Fillable Forms... cheaper than Turbo Tax and after a year of doing it this way, each successive year gets quicker and quicker. And I understand tax implications of everything as a result.

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sleepysurf
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by sleepysurf » Wed Jan 31, 2018 1:51 pm

seamonkey wrote:
Wed Jan 31, 2018 1:20 pm
IRS Free Fillable Forms...
Hah! Never even knew the IRS offered that! FYI, here's the link... https://www.irs.gov/e-file-providers/be ... able-forms

However, there are some limitations, so check the Read Before Starting links.
Retired 2018 | ~50/45/5 (partially sliced and diced)

Chuck
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by Chuck » Wed Jan 31, 2018 2:13 pm

Unless the CPA comes over at 9PM (after the kids go to bed) and takes all my facts and figures while I'm sipping whiskey in my pajamas, tax software wins in my book.

tibbitts
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by tibbitts » Wed Jan 31, 2018 10:21 pm

seamonkey wrote:
Wed Jan 31, 2018 1:20 pm
IRS Free Fillable Forms... cheaper than Turbo Tax and after a year of doing it this way, each successive year gets quicker and quicker. And I understand tax implications of everything as a result.
The limitation is that the fillable forms don't, as far as I know, do the math for you, making errors dramatically more likely.

Nutmeg
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by Nutmeg » Wed Jan 31, 2018 11:35 pm

I have used a CPA (paid for and chosen by an employer) some years and done my own taxes some years.

The CPA firms were both nationally-known. With both firms, it took me more time to explain why they had made mistakes than it would have to do my taxes correctly in the first place. One firm made the same mistake two years in a row: failing to account on state tax forms for the fact that some income came from federal obligations (and therefore was not subject to state tax), even though I had provided that information. Completing one CPA's 20-page information form by hand was more time-consuming than typing the info into the computer software would have been.

I work with a different CPA in another state on behalf of someone else, and he is attentive and conscientious, so I recognize that my experience on my own taxes isn't universal.

If you have the time and interest to prepare your own taxes, I recommend saving the $500.

MandyT
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by MandyT » Thu Feb 01, 2018 4:57 pm

tibbitts wrote:
Wed Jan 31, 2018 10:21 pm
seamonkey wrote:
Wed Jan 31, 2018 1:20 pm
IRS Free Fillable Forms... cheaper than Turbo Tax and after a year of doing it this way, each successive year gets quicker and quicker. And I understand tax implications of everything as a result.
The limitation is that the fillable forms don't, as far as I know, do the math for you, making errors dramatically more likely.
Free Fillable Forms does at least some of the math for you. For example, I entered my interest amounts on Schedule B; the total was calculated and transferred to the 1040. Line 8a is programmed to pull the total from Schedule B if there is one, otherwise to let you enter the amount directly.

The main things you need to do correctly are enter your numbers and look up the tax amount in the tax table. I just filed on Tuesday.

DeerRunner
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by DeerRunner » Thu Feb 01, 2018 7:48 pm

I use the desktop version of TurboTax because it lets me jump around and fill things out how I want. TurboTax imports and automatically input statements from places like vanguard. Last, by doing them yourself you’ll learn more about deductions, which will save you $.

tesuzuki2002
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by tesuzuki2002 » Fri Feb 02, 2018 4:05 pm

Reubin wrote:
Sun Jan 28, 2018 3:51 pm
I've always had my tax returns done by an accountant but that person passed away 2 years ago. I went to a CPA who I know and he did a good job but charged me $500. He charged me the same the following year. I have some Vanguard investments with a few capital gains and the usual deductions. Am I wasting my money? Should I do the job myself? I'm retired now, live in NYC and the $500 seems a little bit high for what is being done for me.
I am an employee and have 3 separate businesses I own and operate... I do my own taxes still... It take about 20 hours.. but I'd rather do it than pay someone what it would cost.

Reubin
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by Reubin » Sun Feb 11, 2018 3:44 pm

I just started my TurboTax Deluxe 2017 taxes however I can't figure out how to import my Vanguard information. What should I do now?

I guess that the tax forms haven't come out as of yet. Can I just put the project on hold until I get them?

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FiveK
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by FiveK » Sun Feb 11, 2018 4:21 pm

Reubin wrote:
Sun Feb 11, 2018 3:44 pm
I guess that the tax forms haven't come out as of yet. Can I just put the project on hold until I get them?
Yes.

obgraham
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by obgraham » Sun Feb 11, 2018 4:54 pm

Reubin wrote:
Sun Feb 11, 2018 3:44 pm
I can't figure out how to import my Vanguard information. What should I do now?

I guess that the tax forms haven't come out as of yet.
Odd. I have all my tax forms from Vanguard. Put the data into TurdoTax, filed the return. All done.

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FiveK
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by FiveK » Sun Feb 11, 2018 5:56 pm

obgraham wrote:
Sun Feb 11, 2018 4:54 pm
Odd. I have all my tax forms from Vanguard. Put the data into TurdoTax, filed the return. All done.
Vanguard says:
Most forms for mutual fund accounts are available online now. You can expect your forms for your brokerage accounts in mid-February.

KATNYC
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Re: Should I Do My Own Taxes Or Pay A CPA $500?

Post by KATNYC » Mon Apr 09, 2018 11:17 am

We used a CPA after being audited a few years ago. We had to pay the IRS a substantial amount, but not nearly as much as they initially said we owed during the audit. We had several rental properties at the time, which have long since been sold.

We are changing CPA's for 2018 or doing the taxes on our own. I ran the numbers myself and was less than $10 off from the CPA's final number.
I used http://www.moneychimp.com/features/tax_calculator.htm, not 2017 tax software that generates forms.

Not only did they make several mistakes on the 2017 taxes (they always make a couple of mistakes) but they also attempted to retroactively raise the fees. We pay $500 for personal and $500 for business. This year the owner of the firm called to discuss the 2017 taxes and his error in not sending an updated engagement letter with the new pricing: $2,300 total. Needless to say, we were invoiced $1,000 and told him that we will not use him going forward. Oddly enough, about 2 weeks prior, I saved a NY Times article with the name of another CPA had given advice about business entity formation. I reached out to him for pricing.

The current CPA said our returns are complicated since we have a business and K-1's.
With all the 2018 changes, I think using a CPA would be our best bet until the kinks are worked out in the new tax law. I am also not sure how section 199A will apply since the IRS hasn't issued guidance.

2017 FEDERAL FORMS used for the business:
Form 1065 2017 U.S. Return of Partnership Income
Schedule B-1 Information on Partners Owning 50% or More
Schedule K-1 Partner's Share of Income, Deductions, Credits
Form 8879-PE IRS e-file Signature Authorization

NEW YORK FORMS used for the business:
Form IT-204 2017 New York State Partnership Return
Form IT-204-IP New York Partner's Schedule K-1
Form TR-579-PT Signature Authorization Efile Certification Efile Certification
Form NYC-204 2017 New York City Unincorporated Business Tax Ret
Form NYC-NOLD-UBTP New York City Net Operating Loss Deduction
NYC 579-UBTP NYC Signature Authorization Form

For our personal returns we used:
2017 FEDERAL FORMS
Form 1040 2017 U.S. Individual Income Tax Return
Schedule A Itemized Deductions
Schedule B Interest and Dividend Income
Schedule C Profit or Loss From Business
Schedule D Capital Gains and Losses
Schedule E p2 Supplemental Income and Loss
Form 2106-EZ Unreimbursed Employee Business Expenses
Form 4952 Investment Interest Expense Deduction
Form 5329 Additional Taxes on Retirement Plans
Form 8606 Nondeductible IRAs
Form 8829 Expenses for Business Use of Your Home
Form 8879 IRS e-file Signature Authorization
Form 8889 Health Savings Accounts Depreciation Schedules

NEW YORK FORMS for personal returns:
Form IT-201 2017 New York Resident Income Tax Return
Form IT-2 Summary of W-2 Statements
e-file Sign. Auth. NYS e-file Signature Authorization Depreciation Schedules

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