POLL: Do you do your own taxes?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills

Do you do your own taxes?

I do my own taxes
285
82%
I have a CPA do my taxes
54
16%
Other
8
2%
 
Total votes: 347

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Longtimelurker
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POLL: Do you do your own taxes?

Post by Longtimelurker »

Given the obvious complexity of a typical boglehead's taxes (backdoor Roth's etc), I am curious how many of you do you own taxes. Please add any commentary you think is valuable.
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G-Money
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Re: POLL: Do you do you own taxes?

Post by G-Money »

If I didn't have a CPA who did my taxes for free (perk of being on the friends and family plan), I'd do it myself. As it is, I review my returns pretty thoroughly.
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jasc15
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Re: POLL: Do you do you own taxes?

Post by jasc15 »

My situation has been pretty simple thus far in my working career. I have had only W2 income and a few 1099's. However, when I changed jobs a few years ago, I had a complicated situation where I had 3 W2's; Job 1 and living in New York, Job 2 living in NY and working in NJ, and then moving to NJ. I handed everything to a family friend CPA since I knew I was taxed by both NY and NJ for a period of time and I wanted that sorted out.

This year I have my first capital gains to consider, but I will still be doing it all myself.
Dandy
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Re: POLL: Do you do you own taxes?

Post by Dandy »

my returns are not complex and Turbo tax seems to do them fine. I do wonder what a professional CPA would add to the process. Sometimes there are things you can do that will avoid taxes that don't come out in just doing your current taxes correctly.
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Toons
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Re: POLL: Do you do you own taxes?

Post by Toons »

Longtimelurker wrote:Given the obvious complexity of a typical boglehead's taxes (backdoor Roth's etc), I am curious how many of you do you own taxes. Please add any commentary you think is valuable.
I have been doing my own taxes about 20 years.
"Obvious Complexity™. I don't see it that way. As long as you have your tax reporting information, it is a matter of carefully following the interview process and entering the data in the proper blanks.That is what is done if you take your taxes to a preparer :happy
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Stonebr
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Re: POLL: Do you do you own taxes?

Post by Stonebr »

Longtimelurker wrote:Given the obvious complexity of a typical boglehead's taxes (backdoor Roth's etc), I am curious how many of you do you own taxes. Please add any commentary you think is valuable.
I disagree with your premise. A Boglehead's taxes should be really simple.
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Andyrunner
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Re: POLL: Do you do you own taxes?

Post by Andyrunner »

Used Turbo Tax for the first time this year. Sister-in-law always helped us in the past.

I was shocked on how simple it was. Now lets hope the software or I didn't make a mistake...
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Re: POLL: Do you do you own taxes?

Post by nisiprius »

The incremental changes year to year haven't been too bad. Like Milo of Croton lifting a calf every day until he could lift a full-grown bull, I have gradually "lifted" 1040-EZ, then 1040A, then 1040, schedules A and B, then, woo hoo! investment profits! and schedule D. I was pretty scared when I started doing consulting work because I thought Schedule C was the dividing point between "do it yourself" and "don't be silly," but I can use C-EZ and I can hack C-EZ. And Schedule SE.

It's all just following directions. Maybe I should put "just" in quotation marks.

Of course, I started doing it in the days when you used pencil and paper--and every year, just as I thought I was almost done, I'd find some small error that propagated to change numbers on almost every page, and pretty soon the eraser had worn a hole in the paper and I needed to get a fresh set of forms and copy everything over. And then a trip somewhere to buy a photocopy, as I did not really want to photocopy my tax returns at work. Tax software is one of the relatively few cases of a true technological fantasy come true. I dreamed that someday I could do my taxes on a computer. And I can!
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rustymutt
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Re: POLL: Do you do you own taxes?

Post by rustymutt »

In this age of computers, it's so simple to it yourself. Next year forms auto fill from database for 2013, making everything so easy. Turbo-Tax rocks.
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frugaltype
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Re: POLL: Do you do you own taxes?

Post by frugaltype »

It would have been interesting to expand the poll to differentiate between do it yourself with software or by hand. The former isn't really do it yourself.
travellight
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Re: POLL: Do you do you own taxes?

Post by travellight »

I wish I could do my own taxes but with 6 rental properties and relatively low proficiency and tax savvy, I rely on a CPA to do it for me.
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Re: POLL: Do you do you own taxes?

Post by Jack FFR1846 »

My dad and grandfather made their living doing tax work. Dad was an enrolled agent. He sold the business and I have the new business (and same person) do my taxes. I should probably consider turbo tax, but I don't think I pay much more to have them do it and Dad used to be a tester for them and Drake and every year found many mistakes. He got free software for his input all the way back to when Drake had a machine and a card you plugged in. He wasn't a CPA.....had only a high school education but worked in the business since his sophmore year in high school. Come to think of it, when the first Drake machine came out, it would not accept a "0" as the first number in a social security number. I found that problem on the very first version when my dad asked me what I thought about this computerized thing and I put in my best shot for my own taxes. My ss starts with a "0". :greedy

I'm an engineer with 3 degrees and almost 30 years practicing. I find the tax stuff illogical and too hard to figure out.
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cheese_breath
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Re: POLL: Do you do you own taxes?

Post by cheese_breath »

I used to do them by hand long, long ago, but when I remarried I inherited three step-children in the deal. I started using a tax preparer because I didn't want to bother with the forms necessary to prove my right to claim them as dependents rather than their father. I stayed with her after the kids were grown out of convenience. We had an arrangement where I would summarize my data onto a few pages, and she would make sure it got put on the right lines on the right forms for a reasonable charge. But as she aged she started making mistakes so I finally decided to take it back and do it myself again, first with Tax Cut for a couple years and now with Turbo Tax.
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Random Poster
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Re: POLL: Do you do you own taxes?

Post by Random Poster »

I do my mother's by hand, and I used to do mine by hand when I lived in the US.

Now, as an expat, my employer engages the services of a few accounting firms to do my US and host country taxes. I still do my own "what if I was still in the US" tax return by hand every year though, just to make sure that the accountants are doing things correctly and to stay on top of the tax laws.
carolinaman
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Re: POLL: Do you do you own taxes?

Post by carolinaman »

I did my taxes manually for many years but have used TT in past few years for federal. State is so simple I still do manually.
stoptothink
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Re: POLL: Do you do you own taxes?

Post by stoptothink »

Have since I was 16. The only time I have ever used a CPA was in '12 when I was audited. Had him look over my work; no issues, and after 9-months of correspondence the IRS agreed.

Mine are very simply, probably never taken me more than an hour.
sls239
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Re: POLL: Do you do you own taxes?

Post by sls239 »

The more complex my returns are, the less likely I am to trust anyone else to do it for me. Even if I had a CPA, I'd be going over it line by line.
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Ged
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Re: POLL: Do you do you own taxes?

Post by Ged »

I have always done my own taxes, starting in the mid '70s before I bought my first computer. As time has gone on my taxes have become more complex, but progress in computer technology and software availability has counterbalanced that complexity. Only once did the IRS complain, when I missed a 1099.

Now that I've recently retired some new parts of tax law are coming into play for the first time, so I think this year is going to be more challenging. On the other hand since I have retired I have more time to think about it.
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serbeer
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Re: POLL: Do you do you own taxes?

Post by serbeer »

The first year I had income, I did it myself with pencil and paper at the time, 1040-EZ was nothing special really. By the time I had to use 1040, Turbo Tax was around, so I've done my first 1040 with pencil and paper the first time to learn the form, and in Turbo Tax every year thereafter.

Much easier since most info can be transfered from previous year, and validation is easy due to year-by-year numbers comparison TT provides--detailed with the past year, and less detailed for the past 5 years. Every change must be explained/understood, and then I know I am OK.

Federal return is then filed through TT, and State return is filed through the state's own website using TT state numbers, so that I don't have to pay for State filing, takes minutes.
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Go Blue 99
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Re: POLL: Do you do you own taxes?

Post by Go Blue 99 »

I did my own for about 15 years. Then we started to get a Schedule K-1 from my wife's family business and hired a CPA last year to do the taxes. We will probably use him again this year.
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ofcmetz
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Re: POLL: Do you do you own taxes?

Post by ofcmetz »

I've used Turbo Tax for about 14 years in a row. Have itemized our deductions each of the last 14 years as well.
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Re: POLL: Do you do you own taxes?

Post by peppers »

We're on the [Free Family CPA File Plan].
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Re: POLL: Do you do you own taxes?

Post by placeholder »

What's complex about backdoor Roth?
Alan S.
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Re: POLL: Do you do you own taxes?

Post by Alan S. »

How come the survey options do not include tax prep by other than the taxpayer and a CPA? Of all prepared returns, CPAs normally concentrate on business and more complex returns. Non CPA preparers can do just as good a job as CPAs on medium and lower complexity returns and they charge a lot less. The tax code is a nightmare of complexity and CPAs also have a hard time dealing with certain issues. In fact, even the IRS has a fairly inconsistent record and often has trouble simplifying the code into a tax publication. In summary, for many people a non CPA preparer should be the first option if they cannot file the return themselves.
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pennstater2005
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Re: POLL: Do you do you own taxes?

Post by pennstater2005 »

I do my own and they are really simple.
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madbrain
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Re: POLL: Do you do you own taxes?

Post by madbrain »

I have always done my own taxes, with the help of software for all years except the first year I worked when I did it on paper and had a 1040 EZ.

Some years, the taxes have been awfully difficult, due to the conflict between federal and state laws for same-sex couples.
For a couple in a California domestic partnership, it involved creating 1 "mock" federal joint return, 2 individual federal returns for filing, and 1 joint California return for filing.
The 2 federal returns for filing were the worst, requiring accounting of separate assets and income, essentially like divorcing every year.
This resulted in about 500 pages of returns and worksheets for the tax years 2011 and 2012.
Since DOMA fell last year, we are now married at both state and federal level, and will only have one joint state and one joint federal return, and no more mock returns thankfully.
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Van-Guard23
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Re: POLL: Do you do you own taxes?

Post by Van-Guard23 »

I have done my taxes ever since I was an Army 1st Lieutenant, after being "voluntold" to go thru training and work at the post VITA site during the tax season...that was 17 years ago. For the past 6 or 7 years, I have used the free H&R Block Basic software available thru www.militaryonesource.mil. Once I am done with my income tax return (and carefully going over Pub 17 in case I missed something), I take it to the military post VITA site for a "second set of eyes" before I file it.
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scrabbler1
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Re: POLL: Do you do your own taxes?

Post by scrabbler1 »

I have done my own taxes since 1985, the first year I filed a tax return. I use pencil and paper although since 1995 (when I bought my first PC), I have used a homemade spreadsheet to aid in the calculations. I have always been good at math so this puts my math skills to good use.

In the 1980s, I filed form 1040, 1040A, and 1040EZ until I bought my co-op apartment. Then it was 1040 with Schedule A every year until a year or two ago. I had paid off my mortgage in 1998 so my itemized deduction took a big drop. Starting in 1990 I filed Schedule D because I had bought my first mutual fund outside of my 401k that year and made at least one redemption per year.

On the state side, I had filed the New York long form some years, short form in others (until they discontinued the short form a few years ago). In 2001, after my company moved to New Jersey, I had to file a NJ non-resident form along with a NY resident credit form, making my taxes more complicated. However, because I already had my PC spreadsheet by then, it was not such a bear.

The toughest year was in 2008 when I left my job and cashed out my company stock worth about $300k. I had to work up lots of little worksheets as well as the AMT for the first and only time. Since then, it has become easier. For 2013, in fact, I can return to 1040A for the first time since 1988 because I won't be itemizing and had no mutual fund redemptions (no Schedule D). It's nice to have it so easy.

I have also been preparing the tax forms for my best friend and my ladyfriend for about 10 years. His were tough in 2012 when he received a large inheritance that year and had his first full year owning a co-op apartment with its deductions. My ladyfriend's have been pretty easy after her first one when she moved to NY from another state, requiring part-year state returns for both states.
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Re: POLL: Do you do your own taxes?

Post by fsrph »

I do my own taxes for as long as I can remember. They aren't all that hard to do and I use TurboTax.

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Billionaire
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Re: POLL: Do you do your own taxes?

Post by Billionaire »

I've done my own taxes for forty years. My degree is in accounting, although I have been employed in the computer field for 24 years. Started using Turbo Tax about 13 years ago and have no plans to stop. What I find really burdensome these days are all the worksheets that need to be filled out in order to see if you qualify for a deduction, credit or whatever. My tax return is pretty basic, W-2's, Schedule A, Schedule B, Schedule D, ESPP, plus some songwriting royalties.
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BolderBoy
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Re: POLL: Do you do your own taxes?

Post by BolderBoy »

Started doing my own taxes in 1968 when my father (an accounting professor) taught me how. Did them by hand until around 2008 then started using TT. Prior to using TT I would usually hear from the IRS every year about some math mistake I'd made. Not since using TT.
NorCalDad
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Re: POLL: Do you do your own taxes?

Post by NorCalDad »

I did them by hand in the simpler days and now use TT and review the PDF forms. I like doing them myself because it's instructive in trying to understand how different deductions and investing decisions affect our tax situation.
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GerryL
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Re: POLL: Do you do your own taxes?

Post by GerryL »

I've always done my own taxes, beginning way back when the short form was literally 2 sides of a half sheet of paper. It's a matter of principle. I'm perfectly willing to pay my fair share (the price of living in a civilized society) but we should not have to pay to pay our taxes.

I've been using TT for at least a dozen year now and tell myself that it's only for the convenience of not having to fill out all the forms by hand and do my own calculations, but it still irritates me that the tax code is so complicated. I do wonder about the years ahead when I might lose some of my mental sharpness and won't be able to manage the task.
Bungo
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Re: POLL: Do you do your own taxes?

Post by Bungo »

TurboTax, for the past ~15 years and for the foreseeable future.
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Sheepdog
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Re: POLL: Do you do your own taxes?

Post by Sheepdog »

In 60+ years of tax preparation, I paid a tax preparer once, and quit after one time because I found a major mistake (moving expenses) where I owed money instead of getting a refund. That was my 1972 return. Even before software, I enjoyed searching the tax codes to prepare my own even with up to 12 schedules required (tax shelter), but that's just me.

For historical perspective, back in the late 40s and perhaps early 50s, the short form for the average worker taking standard deduction was just a large postcard with about 10 lines or less. And taxes were due by March 15 (changed to April 15 in the mid 50s, I think).
Taxes then? The tax rate schedule in 1950 shows that if your taxable income was $6,000 your tax was $1,360, $10,000 it was $2,640, $20,000 it was was $7.260 $50,000, your tax due was $26,820. $100,000 your tax due was $67,320. If you made $150,000 your tax was $111,820. (I found that thru Google)
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likegarden
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Re: POLL: Do you do your own taxes?

Post by likegarden »

I just did mine in half a day, first with paper and pencil, then with TurboTax. Doing it by hand I thought I needed to pay $500 AMT, but Turbotax came up without that. It is all filed, actually was able to pay the IRS $1k via credit card.
My taxes are not difficult, I have only with Vanguard and one bank, not with many financial places as some have here. I am retired, do not own a business, so its simple.
Dulocracy
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Re: POLL: Do you do your own taxes?

Post by Dulocracy »

If I did not share ownership in a law firm, I would do my own taxes. Because of the complexity, it is worth it to me to have a CPA.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.
chaz
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Re: POLL: Do you do your own taxes?

Post by chaz »

Yes, with TurboTax.
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mapleosb
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Re: POLL: Do you do your own taxes?

Post by mapleosb »

Have always done my own with TurboTax. Actually e-filed Federal last Thursday and the refund was deposited today, which was the quickest I have ever seen before. In our state you can file online, so I just copy the figures from TT and save the $20. :D
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Sally
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Re: POLL: Do you do your own taxes?

Post by Sally »

Used a "prominent" CPA (who did taxes for most of the county's judges, etc.) one year and found so many errors (maybe because we were still in school and not yet judges????) that I took over doing them….that was 34 years ago and have done them ever since.

Read the tax regs etc. (before mac-in-tax which morphed into turbo tax existed) and completed the forms--not easy and a pain in the arse but, I learned A LOT….among other things to read the regs each year (albeit while lying on beaches in various wonderful locales) and though we were subjected to couple of "full audits"…we were not cheating and kept RECORDS!! so while scary, those were okay too.

Now a'days it easier with turbotax…review tax law changes and then rely on turbotax…have had to call intuit a couple of times over the years, but they are better than any tax preparer we encountered!!

So, while I don't want to do taxes forever….it is advantageous to keep up with this are of data so…..

I have strongly recommended to all young relatives that they do their own taxes--not because of the cost--rather because they need to understand tax implications of their decisions!
lexie2000
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Re: POLL: Do you do your own taxes?

Post by lexie2000 »

Longtimelurker wrote:Given the obvious complexity of a typical boglehead's taxes (backdoor Roth's etc), I am curious how many of you do you own taxes. Please add any commentary you think is valuable.

Okay, I do our taxes. I will be opening a backdoor Roth this year and converting money from a 401k into it. I know that when it comes to taxes, nothing seems to be easy but is it really a PITA?
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Re: POLL: Do you do your own taxes?

Post by tfb »

IRS statistics show 41% do their own taxes ("59% of individual taxpayers pay professionals to prepare their tax returns for them"). Here's this poll shows 85% of Bogleheads do their own taxes. Meanwhile we know Bogleheads skew higher income and higher net worth and therefore are better able to afford professionals. Something wrong with this picture?

http://www.taxpayeradvocate.irs.gov/201 ... fographics
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aquifer
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Re: POLL: Do you do your own taxes?

Post by aquifer »

I started doing my own taxes in 2011. I have used H&R Block's website each year, never tried Turbo Tax. From what I gather, there's probably not much difference and I get along ok with H&R Block's interface. The CPA I used charged $225, so it's like getting an extra $200 back by doing my own. My taxes will be slightly more complicated for the 2014 year but this forum is extremely helpful so I have no plans to go back to a CPA.
Toefuzz
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Re: POLL: Do you do your own taxes?

Post by Toefuzz »

Mine are simple so I do them myself in 30-50 minutes using TT.

I had a funny professor in college… one of the good ones who had been successful and retired only to find he was bored so he taught a few night classes for fun. He viewed taxes as a game and read the tax code for fun. Did his own taxes "for fun" and was audited every few years. Best part was that he knew the tax code better than the auditor and often times ended up with more money back after the audit :) At least that's how the story went.
JohnF
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Re: POLL: Do you do your own taxes?

Post by JohnF »

I do my own manually to educate myself and then verify with TurboTax.
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Re: POLL: Do you do you own taxes?

Post by jebmke »

Alan S. wrote:How come the survey options do not include tax prep by other than the taxpayer and a CPA? Of all prepared returns, CPAs normally concentrate on business and more complex returns. Non CPA preparers can do just as good a job as CPAs on medium and lower complexity returns and they charge a lot less.
In fact, non-CPAs may out number CPAs in terms of volume if you count all the returns prepared by certified volunteers (VITA, TCE) and non-CPAs who do returns at the tax mills like HR Block and Jackson.

In fact, when I was an ex-pat my company paid PriceWaterHouseCoopers to prepare my US and Belgian taxes but most of the work was done by specialists who were not CPAs. When I spoke with the partner who reviewed and signed off on the returns, she said that the specialists lived and breathed the intricacies of doing returns every day and were more thorough and made fewer mistakes than any of the "accountants" in the office.
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Re: POLL: Do you do your own taxes?

Post by technovelist »

I usually do my own personal taxes with H&R Block At Home, but will engage the tax attorney who does my corporate taxes if I have an unusually complex situation in a given year.
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gkaplan
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Re: POLL: Do you do your own taxes?

Post by gkaplan »

How does using tax preparation software constitute doing one's own taxes?
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telemark
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Re: POLL: Do you do your own taxes?

Post by telemark »

tfb wrote:IRS statistics show 41% do their own taxes ("59% of individual taxpayers pay professionals to prepare their tax returns for them"). Here's this poll shows 85% of Bogleheads do their own taxes. Meanwhile we know Bogleheads skew higher income and higher net worth and therefore are better able to afford professionals. Something wrong with this picture?

http://www.taxpayeradvocate.irs.gov/201 ... fographics
The only people I know personally who pay professionals are the ones who don't own a computer and refuse to learn how to use one. Obviously that doesn't apply to anyone in this forum.
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pennstater2005
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Re: POLL: Do you do your own taxes?

Post by pennstater2005 »

gkaplan wrote:How does using tax preparation software constitute doing one's own taxes?
You still have to enter all your own data just as if you filled out a paper form.
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