Preparing Your Own Taxes

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
Eagle123
Posts: 6
Joined: Thu Dec 27, 2018 10:46 am

Preparing Your Own Taxes

Post by Eagle123 »

Hi All,

For the past 3 years, I've prepared my taxes using Turbo tax. However, this year I would like to be more involved and actually fill out the forms to better understand all of the details and calculations. I have a pretty simple tax situation (single, no dependents, not a homeowner, 1 source of income etc.) so I feel confident that I can accurately report everything.

Eventually, I would like to start preparing taxes for others as a side hustle, so want to become more familiar with the entire process. Also, I'm an active CPA so I have a fairly strong base of knowledge regarding taxes.

Reaching out for any advice on how I can get started and what is the best way to actually proceed (I really have no idea where to begin).
Should I just use the IRS website, print out the forms and mail in the old fashioned way? Additionally, for state taxes, I live/work in NY.

Would really appreciate any advice, thank you!
barnaclebob
Posts: 4366
Joined: Thu Aug 09, 2012 10:54 am

Re: Preparing Your Own Taxes

Post by barnaclebob »

You could go to form view in turbotax on past years returns so you understand how the calcs are done on the actual forms. After looking at that I'm fine with paying $55 to have the program fill it all out.
barreg
Posts: 124
Joined: Wed Feb 27, 2013 1:49 pm

Re: Preparing Your Own Taxes

Post by barreg »

If you get the forms and associated instructions from the IRS and don't have super complicated tax situations (e.g. depreciation, etc.) it's not hard to do your taxes yourself.

I have a spreadsheet setup where I actually estimate my taxes in advance based on expected income and available tax forms (though the 2018 tax forms required a number of changes to my spreadsheet), so when I go to actually do my taxes, it's just tweaking a few things here and there. That also helps with getting my withholding as accurate as possible so that my taxed owed or rebate is almost always less than $100.
User avatar
Epsilon Delta
Posts: 8090
Joined: Thu Apr 28, 2011 7:00 pm

Re: Preparing Your Own Taxes

Post by Epsilon Delta »

Eagle123 wrote: Tue Feb 12, 2019 3:10 pm
Should I just use the IRS website, print out the forms and mail in the old fashioned way? Additionally, for state taxes, I live/work in NY.
I'm not sure that's the best way, but it's a pretty good way. It would probably be worth running any returns you generate (real or dummy) through one or more pieces of tax software and understanding why the results differ. I find NY state publications are far less useful than IRS ones, so there's more room for a better place to start, I can't say that anybody has occupied that room.

You may or may not be interested in looking at the actual US Code at say Cornell.
User avatar
danielrhall
Posts: 53
Joined: Wed Apr 18, 2018 2:20 pm
Location: Raymond, NH USA

Re: Preparing Your Own Taxes

Post by danielrhall »

I really appreciate the free Excel-based tax forms/calculator available here:

https://sites.google.com/site/excel1040/home/

The workbook includes not just the forms and schedules but also many of the associated IRS worksheets so you can see the calculations behind the numbers. It's very simple to do what if scenario analysis using either the various schedules or the override cells. It helps me see and better understand some of my tax planning decisions. Check it out.
User avatar
verbose
Posts: 564
Joined: Thu Aug 28, 2008 10:05 am

Re: Preparing Your Own Taxes

Post by verbose »

Free Fillable Forms allows you to e-file federal for free regardless of your AGI. These forms only do simple math, you otherwise fill them in like paper forms.

I’m a control freak about my taxes and I’ve been using Free Fillable Forms for several years.

States are all different, of course.
kaneohe
Posts: 6786
Joined: Mon Sep 22, 2008 12:38 pm

Re: Preparing Your Own Taxes

Post by kaneohe »

In some cases it helps to understand what you are doing before you do it. Otherwise filling out a form is likely to just be an exercise in filling out a form......put this number there, is greater than that number, enter x, etc. A prime example is this
https://www.irs.gov/pub/irs-prior/i1040 ... df#page=40
You could fill that out a million times and not really understand what you are doing.
edudumb
Posts: 129
Joined: Thu Jun 21, 2018 1:48 pm

Re: Preparing Your Own Taxes

Post by edudumb »

I have a similar question.

Over the past few years, I've been going to H&R Block branch to file tax. It was getting more expensive, and last year they charged about $900 for filing Sch C & E (I provided all the numbers).

When I looked at the 1040 they filed in the past few years, inconsistencies were noticed. Some years they got a wrong depreciation table, and some years they forgot to put the mileage reduction. But I wanted to save the hassle in case I got audited. I just am not convinced that H&R Block is acting at my best interests. Still unsure what to do this year.
User avatar
Stinky
Posts: 6939
Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: Preparing Your Own Taxes

Post by Stinky »

barreg wrote: Tue Feb 12, 2019 3:25 pm If you get the forms and associated instructions from the IRS and don't have super complicated tax situations (e.g. depreciation, etc.) it's not hard to do your taxes yourself.

I have a spreadsheet setup where I actually estimate my taxes in advance based on expected income and available tax forms (though the 2018 tax forms required a number of changes to my spreadsheet), so when I go to actually do my taxes, it's just tweaking a few things here and there. That also helps with getting my withholding as accurate as possible so that my taxed owed or rebate is almost always less than $100.
My experience too. All necessary forms can be downloaded from IRS website.
It's a GREAT day to be alive! - Travis Tritt
jebmke
Posts: 12294
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Preparing Your Own Taxes

Post by jebmke »

edudumb wrote: Wed Feb 13, 2019 1:41 pm I have a similar question.

Over the past few years, I've been going to H&R Block branch to file tax. It was getting more expensive, and last year they charged about $900 for filing Sch C & E (I provided all the numbers).

When I looked at the 1040 they filed in the past few years, inconsistencies were noticed. Some years they got a wrong depreciation table, and some years they forgot to put the mileage reduction. But I wanted to save the hassle in case I got audited. I just am not convinced that H&R Block is acting at my best interests. Still unsure what to do this year.
I see clients at TaxAide with prior returns done by Block. The quality varies. There have been instances of significant errors. One of our site leaders is a former Block preparer and he claims that they do not have an independent review of the return after it is complete. If true, this is a real weakness. Even the best preparers make mistakes and a fresh set of eyes are always good.
When you discover that you are riding a dead horse, the best strategy is to dismount.
User avatar
OAG
Posts: 1200
Joined: Sat Mar 03, 2007 11:54 am
Location: Currently Central Ohio, USA

Re: Preparing Your Own Taxes

Post by OAG »

Doing your own taxes as you explain it will be "simple" for you. However, if you want to study the "system" I suggest you get Publication 17 from the IRS and study it thoroughly as it should provide a background to complete returns for the "public". You are a CPA so you should have no problem working towards "enrolled" to offer professional services within the IRS system.

For Business Tax Preparation you may want to get and study IRS Publication 331 (Check that number as I have been away from the area for many years).

You may want to look into Commercial Tax Preparation Software beyond the usual personal tax preparation software.

Good Luck.
OAG=Old Army Guy. Retired CW4 USA (US Army) in 1979 21 years of service @ 38.
Random Poster
Posts: 2379
Joined: Wed Feb 03, 2010 10:17 am

Re: Preparing Your Own Taxes

Post by Random Poster »

Why don't you first print out the 2017 tax forms that were used when you filed your taxes in 2018 (along with the associated instructions), do those taxes by hand, and see if you come up with the same result that Turbo Tax did?

That way, you can manually see how everything fit together, while still having a road map (i.e., your 2017 tax return) to show you where everything goes.

Once you get comfortable with the 2017 taxes, then do your 2018 taxes solo.
SRenaeP
Posts: 1012
Joined: Tue Jan 19, 2010 9:05 pm

Re: Preparing Your Own Taxes

Post by SRenaeP »

edudumb wrote: Wed Feb 13, 2019 1:41 pm I have a similar question.

Over the past few years, I've been going to H&R Block branch to file tax. It was getting more expensive, and last year they charged about $900 for filing Sch C & E (I provided all the numbers).

When I looked at the 1040 they filed in the past few years, inconsistencies were noticed. Some years they got a wrong depreciation table, and some years they forgot to put the mileage reduction. But I wanted to save the hassle in case I got audited. I just am not convinced that H&R Block is acting at my best interests. Still unsure what to do this year.
If you're providing all the numbers, why not do your own tax prep? If you're unsure if you'd do it correctly, try (without filing) various online programs like TurboTax and TaxAct to see if you get the same result each time.
scrabbler1
Posts: 2544
Joined: Fri Nov 20, 2009 2:39 pm

Re: Preparing Your Own Taxes

Post by scrabbler1 »

Eagle123 wrote: Tue Feb 12, 2019 3:10 pm Hi All,

For the past 3 years, I've prepared my taxes using Turbo tax. However, this year I would like to be more involved and actually fill out the forms to better understand all of the details and calculations. I have a pretty simple tax situation (single, no dependents, not a homeowner, 1 source of income etc.) so I feel confident that I can accurately report everything.

Eventually, I would like to start preparing taxes for others as a side hustle, so want to become more familiar with the entire process. Also, I'm an active CPA so I have a fairly strong base of knowledge regarding taxes.

Reaching out for any advice on how I can get started and what is the best way to actually proceed (I really have no idea where to begin).
Should I just use the IRS website, print out the forms and mail in the old fashioned way? Additionally, for state taxes, I live/work in NY.

Would really appreciate any advice, thank you!
For more than 20 years, I have been using a homemade spreadsheet which mimics the tax forms. For the last 5 years, I have been using the free fillable forms downloaded from the IRS website. As a check against my spreadsheet, I still go through completed forms by hand in case I missed something in the spreadsheet. It also gives me a saved electronic version of the form.

Like you, I live in New York and am single with no dependents but I have had some added items such as itemizing my deductions, cap gains, and the ACA premium subsidy. But it appears to me you have been using one of the short forms such as 1040EZ or 1040A. Even though the IRS split up the data on Form 1040 into several schedules, it doesn't appear that will affect you much, if at all.

I have also been using New York's free fillable forms. New York's forms, unlike the IRS's, have automatic calculations which cuts your work in half. It automatically adds up groups of numbers and determines such things as your standard deduction and taxes due. I still check it against my spreadsheet, but it is nice having several of the numbers already figured out.
Post Reply