What to tell your child about Bill for tax preparation

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Wildebeest
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What to tell your child about Bill for tax preparation

Post by Wildebeest » Tue Apr 26, 2016 11:23 am

My son ( 28 year ) and wife use our accountant to file their taxes. Their bill was last year was $300 and this year it was $575.

He asked why and they responded " X told me that you asked why the fee was higher for 2015. Even though you did not move in 2015, you did have items on your return in 2015 that you did not have in 2015. Such as: Form 8959 for additional medicare taxes; excess FICA withholdings because you worked for more than employer; and you converted to Roth’s for each of you. You did not have any of these items in 2014. All of these items take more time to prepare your returns". They also sent an itemized bill.

He asked us: "Do you think it is a reasonable charge ?".

My question to Bogleheads : What would you tell your child?

My response to my son:

"My guess it is fair price. I do not think your taxes are very complicated. Do you need a full service CPA to do your taxes? Could you do it cheaper?

I think it may give peace of mind to you use a full service but the cost is steep. H&R Block would cost you half and if you would use Turbo tax or one of it's equivalents ( cheaper and may work better) would cost you $ 80.

The best thing would be to do your own taxes on turbo tax and if you get stuck go to H& R Block or go to a local CPA firm. It is always good to have somebody who is used to your state's taxes.

One of my plans is to learn to do our own taxes ( personal only). However it is really the last thing I want to do and I do not want to know what the business CPA bills are. I do think that is money well spent since we have been through three accountants and some of them are not the brightest or just plain old lazy and do not have our best interests at heart. Having a good accountant can save you a lot of money.

If you want a more educated answer, I would suggest you start a thread on Bogleheads regarding your question. "

Since my son most likely will not post, I decided to go ahead and do it.
The Golden Rule: One should treat others as one would like others to treat oneself.

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FelixTheCat
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Re: What to tell your child about Bill for tax preparation

Post by FelixTheCat » Tue Apr 26, 2016 11:35 am

Unless your son has a complicated business, he's overpaying to have his taxes done. The online software Tax Act, Turbo Tax, H&R block work just fine.
Felix is a wonderful, wonderful cat.

Jack FFR1846
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Re: What to tell your child about Bill for tax preparation

Post by Jack FFR1846 » Tue Apr 26, 2016 11:44 am

My tax preparer sends an itemized receipt. Each form or schedule has a cost listed next to it. I didn't do Roth conversions but 2 jobs and AOTC and savings bonds credited towards educational expenses. We paid $200. This is a tax prep business. Not CPA and not high schoolers at H&R Block.

I once again attempted to do my son's taxes this year (2nd year in a row). Not enough income to pay tax. Both fed and state sent corrected returns. No difference in the number, just mistakes made. Taxes are overly complicated. I have 3 engineering degrees and cannot figure them out.
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mhc
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Re: What to tell your child about Bill for tax preparation

Post by mhc » Tue Apr 26, 2016 11:48 am

I would tell him that it is reasonable for full service. I would go on to explain that there are less expensive options. Only your child can determine if it is a good value or not.

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Re: What to tell your child about Bill for tax preparation

Post by Rodc » Tue Apr 26, 2016 11:52 am

FelixTheCat wrote:Unless your son has a complicated business, he's overpaying to have his taxes done. The online software Tax Act, Turbo Tax, H&R block work just fine.


This.

As to whether the charge is fair or not given he wants a full service outfit, he could check around. Here the charges do seem to vary even among seemingly fine outfits. I live in a HCOL area and of the two places I know I think neither would have charged this much for basic taxes for a basic 28 year old (ie employed in a basic W2 type job).
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

batpot
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Re: What to tell your child about Bill for tax preparation

Post by batpot » Tue Apr 26, 2016 11:58 am

What you should say is: That's egregious. Find a new accountant.

And his return sounds simple enough that tax SW should suffice.

magicrat
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Re: What to tell your child about Bill for tax preparation

Post by magicrat » Tue Apr 26, 2016 12:19 pm

i'd probably tell a 28 year old to deal with his own taxes, do his own research and make his own decision, but that's just me

GreenGrowTheDollars
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Re: What to tell your child about Bill for tax preparation

Post by GreenGrowTheDollars » Tue Apr 26, 2016 12:34 pm

TurboTax handles all of his stuff very nicely, and at a much, much lower price.

There is no price at which I would find H&R Block a good option. I've seen too many of my clients with bungled tax returns from those kinds of storefronts -- failure to claim college tax credits for qualified families, misspelled kids names, use of the 1040 when a 1040A was all that was needed, ... :annoyed

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Re: What to tell your child about Bill for tax preparation

Post by Grt2bOutdoors » Tue Apr 26, 2016 1:20 pm

GreenGrowTheDollars wrote:TurboTax handles all of his stuff very nicely, and at a much, much lower price.

There is no price at which I would find H&R Block a good option. I've seen too many of my clients with bungled tax returns from those kinds of storefronts -- failure to claim college tax credits for qualified families, misspelled kids names, use of the 1040 when a 1040A was all that was needed, ... :annoyed


+1 If your son can do a Roth conversion, if he can read and write, he too can easily spend a few hours and use Turbotax to do his taxes for much less.
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psystal
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Re: What to tell your child about Bill for tax preparation

Post by psystal » Tue Apr 26, 2016 1:26 pm

Not only will TurboTax handle this, but your son will learn a lot even using the software to guide him. I believe it's important to understand your taxes, at least on a basic level, and most individuals shouldn't be going to tax prep firms.

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Re: What to tell your child about Bill for tax preparation

Post by KlangFool » Tue Apr 26, 2016 1:34 pm

Wildebeest wrote:
He asked us: "Do you think it is a reasonable charge ?".



Wildebeest,

My answer to my son would be why are you asking me? Didn't you shop around to check whether this is a reasonable price?

A) If you believe $575 is a lot of money, then, you should shop around for a better deal.

B) If you do not care about $575, why are you asking me? This is YOUR MONEY.

KlangFool

dltnfs
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Re: What to tell your child about Bill for tax preparation

Post by dltnfs » Tue Apr 26, 2016 1:49 pm

My favorite is the charge for "excess FICA withholdings because you worked for more than employer". Shouldn't the tax software just do that, without even any extra data entry? I can't comment on whether the charge is fair, but the delta seems ridiculous.

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JonnyDVM
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Re: What to tell your child about Bill for tax preparation

Post by JonnyDVM » Tue Apr 26, 2016 1:51 pm

Hard to say without knowing the inner working of the return like the deductions, rental property ect. To me for your regular average return $300 sounds about right and $575 sounds steep. If it's possible for your son I would definitely try the DIY approach next year. I had to give that approach up when the taxes just got too darn complicated for me (S-corp and rental) but without something like that, it really is pretty strait forward and the modern tax software will walk you right through it.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

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Re: What to tell your child about Bill for tax preparation

Post by LarryAllen » Tue Apr 26, 2016 2:12 pm

It seems to be it depends on where you live. I am in California and $300 sounds cheap and $575 sounds reasonable. On the other hand if I lived in a lower cost place my view may be different. Also depends on the experience of the CPA. That is $575 and if a seasoned CPA is actually working on the return then great. However, if senior CPA doesn't really look at it then maybe not. Lastly, if the CPA raised it from $300 to $575 AFTER doing the taxes I would have a problem with that and would suggest your child ask them to honor the same $300 this year and raise it next year. That is a very large raise percentage wise. I do professional services and I would let someone know ahead of time if I were changing my charge by that much.

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unclescrooge
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Re: What to tell your child about Bill for tax preparation

Post by unclescrooge » Tue Apr 26, 2016 3:30 pm

Your son should learn to do his own taxes using TuboTax.

If his income is $100k, paying $500 is like 0.5%!

NMJack
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Re: What to tell your child about Bill for tax preparation

Post by NMJack » Tue Apr 26, 2016 3:58 pm

How about "Next year, why don't you trying doing them yourself?, I (Dad) will help you in any way I can." Might even open the door for Dad to pass on a bit of education regarding smart investing (tax efficiency via passive index funds, value of tax deferred retirement investing, etc.).

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Re: What to tell your child about Bill for tax preparation

Post by randomguy » Tue Apr 26, 2016 4:04 pm

batpot wrote:What you should say is: That's egregious. Find a new accountant.

And his return sounds simple enough that tax SW should suffice.


I doubt he will find a cheaper accountant. Yes that seems expensive for those couple of forms but I have a feeling that most companies will charge similiar money. You choices are go to a form filler (H&R block) or fill out the form yourself (buy turbo tax).

delamer
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Re: What to tell your child about Bill for tax preparation

Post by delamer » Tue Apr 26, 2016 4:06 pm

psystal wrote:Not only will TurboTax handle this, but your son will learn a lot even using the software to guide him. I believe it's important to understand your taxes, at least on a basic level, and most individuals shouldn't be going to tax prep firms.


Agreed. The worst case scenario is that your son and his wife find doing their own taxes so tortuous, even with TurboTax, that they go back to using a CPA. But at least they will have the information to make that decision, and will have determined that the CPA cost is worth it to them.

Morik
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Re: What to tell your child about Bill for tax preparation

Post by Morik » Tue Apr 26, 2016 4:22 pm

FelixTheCat wrote:Unless your son has a complicated business, he's overpaying to have his taxes done. The online software Tax Act, Turbo Tax, H&R block work just fine.


Yep--I use TaxAct for around $15. The first year I did it myself (2014 taxes) I had a variety of complications:
- moved my brokerage account from an advisor over to Betterment, realizing a bunch of cap gains
- mega-backdoor to Roth IRA
- AND a mega-backdoor to Roth 401k (I had done one of them accidentally, meaning to do the other, and it wasn't undoable)
- regular backdoor roth IRA (me + spouse)
- Multiple mortgage companies to enter for interest rate deduction, etc (refinanced during that year)

It took me maybe 10-15 hours of work, but I was extremely thorough and did a bunch of research as well (included in that time estimate).

This year I did my 2015 taxes and had a few similar things:
- moved my brokerage account from Betterment to Vanguard, realizing some cap gains (offset by TLH in vanguard account in late 2015).
- mega-backdoor to Roth 401k
- regular backdoor roth (me + spouse)
- multiple mortgage companies again (my loan was sold to Chase)

This year it took me maybe 2 hours total.

While I make a good amount of money, it is worth it to me to do my own taxes (our bill for 2013 taxes was around $500-$600 I believe). The combination of enjoying this sort of thing and spending 2 hours on it after the initial investment of learning the first time, is worth saving $500+. (I make less than $250/hour; if I made $250/hour, I'd probably still do them since I kinda enjoy it for some strange reason. Not to mention gathering the documents and driving to, meeting with, and driving home from the CPA takes nearly as long anyway.)

For someone who loathes this sort of things and who makes enough to be able to afford a $500 tax bill without much pain, I would say its fine.
For someone who doesn't find this to be loathsome work, I would say do it yourself. Once you learn what you need to do it shouldn't take very long each year, at least for not-super-complicated situations.

I can say that if I ever again work in 2 different states during one tax year, I will likely go to a CPA because I don't think I'd enjoy sorting out the state tax bit, and investing in learning how to do it wouldn't be worth it as it would be highly unlikely I'd be in the same situation again (between those 2 states, at least; I assume each pair of states has slightly different rules).

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BL
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Re: What to tell your child about Bill for tax preparation

Post by BL » Tue Apr 26, 2016 4:42 pm

I would suggest he watch for a sale on this year's TT or H&R Block (somehow I had trouble a few years ago with a cheap version of the other one- maybe my fault) and try to do this year's one just for practice. Then he could decide whether it is worth it or not for next year. I agree you can learn a lot about taxes and planning by doing it yourself (even more if you do it by hand).

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Re: What to tell your child about Bill for tax preparation

Post by Doom&Gloom » Tue Apr 26, 2016 5:00 pm

BL wrote:I would suggest he watch for a sale on this year's TT or H&R Block (somehow I had trouble a few years ago with a cheap version of the other one- maybe my fault) and try to do this year's one just for practice. Then he could decide whether it is worth it or not for next year. I agree you can learn a lot about taxes and planning by doing it yourself (even more if you do it by hand).


I like this suggestion!

But in OP's spot, with a 28 y/o "child," I'm afraid I would have just said, "It's too damn much for me. I do my own with TT (or whatever). If you think the CPA is too high, there are alternatives--including doing it yourself manually for nothing. It's your money."

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Wildebeest
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Re: What to tell your child about Bill for tax preparation

Post by Wildebeest » Tue Apr 26, 2016 5:50 pm

KlangFool wrote:
Wildebeest wrote:
He asked us: "Do you think it is a reasonable charge ?".



Wildebeest,

My answer to my son would be why are you asking me? Didn't you shop around to check whether this is a reasonable price?

A) If you believe $575 is a lot of money, then, you should shop around for a better deal.

B) If you do not care about $575, why are you asking me? This is YOUR MONEY.

KlangFool


Klangfool,

I am happy, that my son asked me. I like it, that he picked our accountant.

I think it is reasonable to ask somebody, who has a lot of experience and history with paying accountants and taxes.

I would like him to continue asking us questions ( it is already disappointing that after the first couple of times a job offers he would discuss if he should take them, but I clearly was not the fund of knowledge and now he will inform me what is up, but does not ask what I think)

Yes, he did google charges for tax for tax prep as a first step before asking us.


Wildebeest
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KlangFool
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Re: What to tell your child about Bill for tax preparation

Post by KlangFool » Tue Apr 26, 2016 6:14 pm

Wildebeest wrote:
KlangFool wrote:
Wildebeest wrote:
He asked us: "Do you think it is a reasonable charge ?".



Wildebeest,

My answer to my son would be why are you asking me? Didn't you shop around to check whether this is a reasonable price?

A) If you believe $575 is a lot of money, then, you should shop around for a better deal.

B) If you do not care about $575, why are you asking me? This is YOUR MONEY.

KlangFool


Klangfool,

I am happy, that my son asked me. I like it, that he picked our accountant.

I think it is reasonable to ask somebody, who has a lot of experience and history with paying accountants and taxes.

I would like him to continue asking us questions ( it is already disappointing that after the first couple of times a job offers he would discuss if he should take them, but I clearly was not the fund of knowledge and now he will inform me what is up, but does not ask what I think)

Yes, he did google charges for tax for tax prep as a first step before asking us.


Wildebeest


Wildebeest,

1) I had trained and coached my children to shop around for a long time. This is right from we give them $25 cash for X'mas and birthday since they were kids.

2) Starting last year, I am training my teenage son and daughter to file their own tax via H&R Block Taxcut.

KlangFool

delamer
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Re: What to tell your child about Bill for tax preparation

Post by delamer » Tue Apr 26, 2016 6:19 pm

Wildebeest -

I am interested in your comment above that you were disappointed when your son stopped consulting you about which job offer to accept.

I can understand why you felt that way, to an extent. But at some point adult children have to make their own decisions and own mistakes. I think that is especially true once they marry and are making these choices in conjunction with a spouse.

Adam11
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Re: What to tell your child about Bill for tax preparation

Post by Adam11 » Tue Apr 26, 2016 6:25 pm

magicrat wrote:i'd probably tell a 28 year old to deal with his own taxes, do his own research and make his own decision, but that's just me


Same here. Once I was no longer claimable as a dependent, I was on my own. Setting kids free helps them build character.

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Wildebeest
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Re: What to tell your child about Bill for tax preparation

Post by Wildebeest » Tue Apr 26, 2016 6:35 pm

delamer wrote:Wildebeest -

I am interested in your comment above that you were disappointed when your son stopped consulting you about which job offer to accept.

I can understand why you felt that way, to an extent. But at some point adult children have to make their own decisions and own mistakes. I think that is especially true once they marry and are making these choices in conjunction with a spouse.


delamer,

You are so right.

I want to help my son and I want him to do well and not suffer and especially not make the same mistakes, I made. I would hope that with age comes wisdom and that I learned something I can share.

On the other hand I am grateful that he is very accomplished and he may very well be better off without my advice regarding job offers.

Wildebeest
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delamer
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Re: What to tell your child about Bill for tax preparation

Post by delamer » Tue Apr 26, 2016 7:05 pm

Thanks for replying, Wildebeest.

One of the toughest parts of parenting is letting your kids make their own decisions and then stepping back as they deal with the consequences. It sounds like you have faith in your son and the way you raised him, which is the best gift you can give him (and your daughter-in-law).

MathWizard
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Re: What to tell your child about Bill for tax preparation

Post by MathWizard » Tue Apr 26, 2016 10:16 pm

I think that it is great that your son will come to you for advice in money matters. I hope that
my sons continue to do so as well. (My oldest is 26, so not much different form your situation.)

Next year, I suggest you purchase turbotax and do your taxes yourself as well as have the CPA firm do them,
and compare the results.
Your son can do the same, and use the same software (TT allows up to 5 returns.) My younger son does this
with me. So $50 to $60 for this experiment for the two of you.

Your son may find that he can do just as good a job on taxes as the CPA. If he does not, he can see the benefit of
having a professional doing the job, just like house or car maintenance or any other task for which you can DIY or hire a professional.

We compared doing our own taxes with the results from a CPA firm for the first year for each of the two businesses my wife had.
Both times, we arrived at the same answers as did the CPAs. Other than those two years, we have filed the returns
ourselves without a CPA.
Last edited by MathWizard on Tue Apr 26, 2016 10:24 pm, edited 1 time in total.

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Toons
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Re: What to tell your child about Bill for tax preparation

Post by Toons » Tue Apr 26, 2016 10:22 pm

"My question to Bogleheads : What would you tell your child?"

The following:
"You have a year to educate yourself."
Make a commitment to do your taxes yourself next year."
Save the 500 , :moneybag
TaxAct,TurboTax,,HR Block..many more to choose from.(Online)


:mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

OutInThirteen
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Re: What to tell your child about Bill for tax preparation

Post by OutInThirteen » Wed Apr 27, 2016 1:21 am

Encourge him to do his own taxes the old fashioned way - filling in paper forms by hand. It's worked for me for over 40 years. That's far and away the best way to understand taxes. It seems to me that a lot of unnecessary money is being spent on tax software these days - an apparent consumer marketing coup by those who sell the software. It baffles my mind. Oh well.

TerryDMillerMBA
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Re: What to tell your child about Bill for tax preparation

Post by TerryDMillerMBA » Wed Apr 27, 2016 2:21 am

Once I read that he used your accountant, I immediately thought that he probably uses/used your attorney(s). "Not that there's anything [inherently] wrong with that," but the pattern may need to be broken, putting my conjecture with other comments above mine.

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Rainier
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Re: What to tell your child about Bill for tax preparation

Post by Rainier » Wed Apr 27, 2016 5:00 am

We charge $50k to $100k for some tax returns. We don't charge by form.

If your son can use a computer he can figure out tax act or turbotax.
- Bill

psystal
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Re: What to tell your child about Bill for tax preparation

Post by psystal » Wed Apr 27, 2016 8:03 am

OutInThirteen wrote:Encourge him to do his own taxes the old fashioned way - filling in paper forms by hand. It's worked for me for over 40 years. That's far and away the best way to understand taxes. It seems to me that a lot of unnecessary money is being spent on tax software these days - an apparent consumer marketing coup by those who sell the software. It baffles my mind. Oh well.


I would strongly advise against most anyone doing their taxes by hand.

I can do my taxes by hand, and I agree there can be some value to doing this once or twice, but the software saves a lot of time, especially for someone with the same information/employer(s) each year. It's also far less error prone then I am, and I've never overlooked a deduction using it.

As Elizabeth Warren astutely pointed out recently, tax filings are complex behemoths now largely because of the efforts of these software companies. They've contributed to the growth of a system that's far more complex than it was 20 years ago, and it makes consumers need their product (which, fortunately, works). While I wish it were different, I recognize that for the time being my best option is to buy the software and let it navigate the process.

Frugal Bogleheads that we are, we split the cost of TT with my parents and sister, so it works out to less than $20 a piece.

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OAG
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Re: What to tell your child about Bill for tax preparation

Post by OAG » Wed Apr 27, 2016 9:04 pm

BL wrote:I would suggest he watch for a sale on this year's TT or H&R Block (somehow I had trouble a few years ago with a cheap version of the other one- maybe my fault) and try to do this year's one just for practice. Then he could decide whether it is worth it or not for next year. I agree you can learn a lot about taxes and planning by doing it yourself (even more if you do it by hand).


Just used a simple check box on Tax Act this year (2015 Tax Year) to order next years (2016 Tax Year) program for about $8. (There are higher cost versions but for me the $14.99 version was sufficient this year and should be next year (at about 1/2 price).
OAG=Old Army Guy. Retired CW4 USA (US Army) in 1979.

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daveatca
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choose your poison

Post by daveatca » Wed Apr 27, 2016 9:18 pm

Jack FFR1846 wrote:Taxes are overly complicated. I have 3 engineering degrees and cannot figure them out.

I filled out my daughter's 1040EZ one year when she was in college.
IRS said: you're an idiot and here is her refund.
But, I only have 2 engine degrees and a MBA.

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JonnyDVM
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Re: choose your poison

Post by JonnyDVM » Wed Apr 27, 2016 9:28 pm

daveatca wrote:
Jack FFR1846 wrote:Taxes are overly complicated. I have 3 engineering degrees and cannot figure them out.

I filled out my daughter's 1040EZ one year when she was in college.
IRS said: you're an idiot and here is her refund.
But, I only have 2 engine degrees and a MBA.


I still don't understand AMT. We really do need a tax policy overhaul in the USA. It shouldn't be that complicated. I don't need my return to be the size of a postcard but when highly educated people have issues it seems to me you really need to sit down and evaluate your system.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

HIinvestor
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Re: What to tell your child about Bill for tax preparation

Post by HIinvestor » Thu Apr 28, 2016 2:51 am

We pay the CPA under $1000 and have several streams of income including a partnership, investments, and real estate, and a tax return that is about 1/2 an inch thick, with lots of forms and attachments. We also pay another fee of under $1000 for the K-1 for the real estate partnership. We know we COULD do it (and in fact have done it one or two years), but prefer to have the CPA do it and feel it is worth it. The CPA suggested our kids do their own returns because. Their income sources are straightforward and they don't have property or depreciation to worry about.

Our 28 year old S does his own return with TurboTax. He is an employee and also runs his own business. He has no problem keeping track of his income and expenses from his business and doing his return on TurboTax. He has a better feel for what little tweaks to his income, 401K contributions and IRA contributions have on his income and net worth.

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Wildebeest
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Re: What to tell your child about Bill for tax preparation

Post by Wildebeest » Thu Apr 28, 2016 10:57 am

Jack FFR1846 wrote:I once again attempted to do my son's taxes this year (2nd year in a row). Not enough income to pay tax. Both fed and state sent corrected returns. No difference in the number, just mistakes made. Taxes are overly complicated. I have 3 engineering degrees and cannot figure them out.


Great response.

I have great difficulty following directions and I have no engineering degrees and while I like to go over the tax return and question as to with what the CPA does, I rather mulch, mow the lawn, cut down trees and split wood than do the taxes myself.
The Golden Rule: One should treat others as one would like others to treat oneself.

Miakis
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Re: What to tell your child about Bill for tax preparation

Post by Miakis » Thu Apr 28, 2016 11:55 am

I am a CPA with my own tax practice and also have previously worked as a TurboTax support agent.

Many people are willing to pay more for a CPA because that relationship is important to them.

If they receive tax advice as part of that price, or perhaps have a CPA who is willing to answer emails or pick up the phone and speak with them when they have immediate questions, or actually thinks about taxes (rather than just being a data-entry clerk), then it's possible that paying a premium is worthwhile.

Two things I would caution:

1) H&R Block is ridiculous. Not only do they routinely make mistakes and do sloppy work, but I find that their pricing escalates quickly when you add extra forms to the return. I would not expect H&R Block's bill to be much cheaper than the CPA's, and the chances are far greater that H&R Block will fail to ask the questions they need to ask.

2) Before using TurboTax, your son and his wife should ask themselves what value they place on their time. What is -their- hourly rate? If they spend 5-6 hours doing their tax return on TurboTax, plus pay for the software, have they really come out ahead? People frequently call TT support regarding backdoor ROTHs and I fielded a few calls about excess social security. Not because the software mishandles these issues, but because the user is not understanding something. And that's not an instant call - add another 1-2 hours on hold and 30 mins-1hr with the support agent if they run into problems.

3) Sometimes people cry when doing their own taxes. They curse, they swear, they fight with their spouse, they pull out their hair. And at the end of all of that frustration, they often miss a deduction or make an error. I have many clients who are happy to fork over $600 to someone they can trust rather than deal with all of that.

I just completed a return for a new client, and I noticed that their previous accountant had missed something. It's worth a $1,000 refund to them. I made some additional inquiries and suggestions that reduced their taxes owed this year. So did I end up being worth the $750 I'm charging them? They could have saved a lot of money going with TurboTax instead of me. But I went to school for this. I like to think those degrees and certificates that I hang on my office wall are worth something.

On the other hand, the old accountant charged more than me. He probably has some fancy certificates, too.

afan
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Re: What to tell your child about Bill for tax preparation

Post by afan » Thu Apr 28, 2016 1:55 pm

Agree with all of that. The vast majority of people in the country could very well do their own taxes, by hand and even more with retail tax software. But they don't want to. They want someone to deal with it, get it right and pay a figure to free up their time.

We have used an enrolled agent for a series of estate and trust returns. She has been great. Cheaper than a CPA and no hint of a problem. Very responsive. accurate returns, as far as we know, smart person, good tax advice. Stays pleasant in the midst of tax season. Who could ask for more?


(P.S. She works for H&R Block).
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

joeblow
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Re: What to tell your child about Bill for tax preparation

Post by joeblow » Thu Apr 28, 2016 3:20 pm

Miakis wrote:
Many people are willing to pay more for a CPA because that relationship is important to them.

If they receive tax advice as part of that price, or perhaps have a CPA who is willing to answer emails or pick up the phone and speak with them when they have immediate questions, or actually thinks about taxes (rather than just being a data-entry clerk), then it's possible that paying a premium is worthwhile.

...

3) Sometimes people cry when doing their own taxes. They curse, they swear, they fight with their spouse, they pull out their hair. And at the end of all of that frustration, they often miss a deduction or make an error. I have many clients who are happy to fork over $600 to someone they can trust rather than deal with all of that.

...

But I went to school for this. I like to think those degrees and certificates that I hang on my office wall are worth something.



^^This!

I happily write a check every year to my accountant for doing my taxes. I call/email/text him whenever I want throughout the year and get answers to my questions immediately. Every year I drop off a folder with all my tax related documents, pet his dog, talk about life for a bit, and then in a few weeks sign the necessary forms and write the IRS a check. Minimal time spent...zero time spent worrying about it. A few times a year we get together for drinks or a BBQ and otherwise enjoy life. I would rather spend my little free time doing the things I like. YMMV

OP: only your kid can answer whether the money was worth it to him.

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celia
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Re: What to tell your child about Bill for tax preparation

Post by celia » Thu Apr 28, 2016 3:33 pm

I insisted my kids learn to do their own taxes so that they will understand the tax consequences of their future financial decisions.

Daughters and sons are both capable of doing it.

Why didn't your son ask his wife if she was interested in doing it to save them some money? Between the two of them, they should be able to figure it out.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

wrongfunds
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Re: What to tell your child about Bill for tax preparation

Post by wrongfunds » Thu Apr 28, 2016 6:53 pm

Do you still consider him as "child" or does he considers himself as "child"? When I saw the title of your post, I was wondering if your 5 yearold wanted to know about your tax preparation bill! It is not as if you wanted to hide the gender of your son. It was not even important if the person asking was your son or somebody you work with.

Did you intentionally selected the title to get more eyeballs? Isn't your title more like "What to tell your child about Birds and Bees"

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Wildebeest
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Re: choose your poison

Post by Wildebeest » Thu Apr 28, 2016 7:16 pm

daveatca wrote:
Jack FFR1846 wrote:Taxes are overly complicated. I have 3 engineering degrees and cannot figure them out.

I filled out my daughter's 1040EZ one year when she was in college.
IRS said: you're an idiot and here is her refund.
But, I only have 2 engine degrees and a MBA.


You are so far ahead of me in attempting this. I happily pay my accountant.
The Golden Rule: One should treat others as one would like others to treat oneself.

johnubc
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Re: What to tell your child about Bill for tax preparation

Post by johnubc » Thu Apr 28, 2016 7:37 pm

If I had to fill out Form 8959, I would not be too worried about $575 - although I think it is a bit pricey, with an income that high, he probably has a few other items that make his tax return complex.

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Wildebeest
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Re: What to tell your child about Bill for tax preparation

Post by Wildebeest » Thu Apr 28, 2016 9:06 pm

wrongfunds wrote:Do you still consider him as "child" or does he considers himself as "child"? When I saw the title of your post, I was wondering if your 5 yearold wanted to know about your tax preparation bill! It is not as if you wanted to hide the gender of your son. It was not even important if the person asking was your son or somebody you work with.

Did you intentionally selected the title to get more eyeballs? Isn't your title more like "What to tell your child about Birds and Bees"


I consider him a full grown male with a mind of his own. He is my wife's and my son and he is definitely our child (an apt description)and to be more inclusive I thought child over son would be more appropriate .

Did you read the post? If you did, I am surprised you feel mislead.
The Golden Rule: One should treat others as one would like others to treat oneself.

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daveatca
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Professional driver on closed course

Post by daveatca » Thu Apr 28, 2016 9:33 pm

Wildebeest wrote:You are so far ahead of me in attempting this. I happily pay my accountant.

I do not attempt this at home.
Since 1981 I have used the same family-owned tax-prep firm to do my taxes.
$295 last year for: tiny ($80K revenue) business + W2 + pension. Me happy.

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JonnyDVM
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Re: What to tell your child about Bill for tax preparation

Post by JonnyDVM » Thu Apr 28, 2016 10:20 pm

Wildebeest wrote:
wrongfunds wrote:Do you still consider him as "child" or does he considers himself as "child"? When I saw the title of your post, I was wondering if your 5 yearold wanted to know about your tax preparation bill! It is not as if you wanted to hide the gender of your son. It was not even important if the person asking was your son or somebody you work with.

Did you intentionally selected the title to get more eyeballs? Isn't your title more like "What to tell your child about Birds and Bees"


I consider him a full grown male with a mind of his own. He is my wife's and my son and he is definitely our child (an apt description)and to be more inclusive I thought child over son would be more appropriate .

Did you read the post? If you did, I am surprised you feel mislead.


I don't see why people think it's weird that a 28 year old would ask their dad for advice. I asked my dad for advice many times in my 20s. Didn't always follow it and sometimes did the opposite, but never thought it was weird to ask for it :happy

Initially out of school I paid an accountant. Then I realized my return was easy (standard deduction) and I did my taxes myself for a few years. Eventually things got complicated and now I'm back with an accountant. I think there's a lot of value in being at least vaguely familiar with the tax code. Everyone should try doing their own taxes at least once IMO.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

wrongfunds
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Re: What to tell your child about Bill for tax preparation

Post by wrongfunds » Fri Apr 29, 2016 9:14 am

I don't know; "child" just does not denote a grown up son.

When I realize that my son's 401K was handled by Vanguard, I told him to max his 401K and IRA in the indexed fund and forget about it. Initially, he used to check his balance every day and used to rag me when the numbers went down but eventually he wised up!

We used to share tax software to prepare the returns but this time he went with another brand.

afan
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Re: What to tell your child about Bill for tax preparation

Post by afan » Fri Apr 29, 2016 11:04 am

daveatca wrote:
Jack FFR1846 wrote:
Taxes are overly complicated. I have 3 engineering degrees and cannot figure them out.

I filled out my daughter's 1040EZ one year when she was in college.
IRS said: you're an idiot and here is her refund.
But, I only have 2 engine degrees and a MBA.


The problem is that, as engineers, you expect the rules to make sense. You have to let go of your analytical skills and just do what you are told. Let the program run the calculations and hope whoever did the programming got it right. If standard retail software can handle your return, you can certainly do it yourself.

Whether you want to is another matter.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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