Income Tax

[MDM4AU 337]

How many on here do your taxes yourself and how many use a professional?

I have always done my own taxes using Turbo Tax and the like and always been satisfied with it. But this year I used a CPA and, WOW! I did a quick run through on Turbo Tax this year to get an estimate of what I would get back and it was about 1/3 of what the CPA got me. I didn't realize there was that big of a difference. Of course, now I know I need to adjust my withholding more on my paychecks. Don't want the Government getting such a nice interest free loan.

[SLAG-91 1,578]

I do my own...mine are still pretty simple (no dependents, I rent, I don't benefit from itemizing, etc.) and take me about 45 minutes, if that long.

[TexasTiger 13,556]

How many on here do your taxes yourself and how many use a professional?

I have always done my own taxes using Turbo Tax and the like and always been satisfied with it. But this year I used a CPA and, WOW! I did a quick run through on Turbo Tax this year to get an estimate of what I would get back and it was about 1/3 of what the CPA got me. I didn't realize there was that big of a difference. Of course, now I know I need to adjust my withholding more on my paychecks. Don't want the Government getting such a nice interest free loan.

I do my own. What's the CPA charge?

[jumbo 0]

I do my own but next year Im going to use a CPA just to see if it can help me and Md your right I hate giving the Gov an intrest free loan all year when I could have it parked in a Roth Ira drawing 12%

[Tiger in Spain 0]

I do my own. I will look into the CPA next year though.

[MDM4AU 337]

I do my own. What's the CPA charge?

Some charge hourly, others charge differently depending on the amount of paperwork involved. We paid $106 and it only took an hour. Of course, always doing it myself I had everything in order when I took it to the CPA.

It would have cost us about $50 for Federal and another $20-$30 for State with Turbo Tax.

[TexasTiger 13,556]

I do my own. What's the CPA charge?

Some charge hourly, others charge differently depending on the amount of paperwork involved. We paid $106 and it only took an hour. Of course, always doing it myself I had everything in order when I took it to the CPA.

It would have cost us about $50 for Federal and another $20-$30 for State with Turbo Tax.

That's not bad. Are your taxes complicated or was the savings just in determining allowable deductions?

[TitanTiger 20,708]

I use TurboTax and have used TaxCut before as well. How did you get so much more back using the CPA? Were you leaving out massive amounts of deductions you should have been claiming or what?

[Boonan 0]

Or maybe his CPA used to work for Enron.

[Ranger12 46]

MD, just like you, a few years ago I found out the difference a CPA could make.

My dad was a certified tax preparer when I was growing up and he taught me alot in preparing them. He was not a CPA and mostly did them for family and friends and only charged them about 20 bucks. Most of theirs were pretty simple with no itemizing, so I never learned about all that stuff. But when I was married to my second wife and we bought a house, we had her brother who was a CPA do them for us. Even then he only used the typical deductions for the house to get us a little more money.

After we divorced, I went back to doing them myself. Then when I married Blonde Wasabi, her dad said he had an awesome CPA that knew how to get me all sorts of deductions. So, before I sent him my papers, I did it myself to see if there would be a difference. Well, this guy got me about $600 more back on my refund and it was all legit because of things I could itemize that I would never even thought off. Like medical bills, work clothes, computer purchases, etc. All I had to produce was receipts or any other documentation to support that stuff just in case I was audited.

So, we save all of our receipts for anything we think we can deduct. He charges $60 and files it electronically and the money he gets us is well worth the $60.

[MDM4AU 337]

Well, complicated for me after watching the accountant. I think the biggest thing is just her knowledge of little things I wasn't counting. We sold and bought a house and she claimed every expense possible by law some of which I was probably overlooking. She picked up every deduction we could claim with my wife being a teacher, plus some donations we didn't realize we could claim. As thorough as the TurboTax software appears to be, her knowledge and my admitted ignorance probably made up the difference. Again, what I would have paid for the software/filing compared to someone else doing it and saving me the time was rather worth it, imo. I've never completed my taxes (Federal and State) in an hour. It's usually a couple of hours a night for 2-3 nights making sure I have done everything right, and sorting through everything. And my wife just corrected me - it didn't even take a full hour for the accountant.

[otterinbham 0]

My dad once gave me good advice: Never scrimp on accountants or lawyers.

My wife's a CPA, but we always use a true tax accountant. I have my own business and we both own commercial property, so it's worth the 500 bucks we pay every year. Last year alone, he shaved about 8000 off my taxes.

At the same time, having an accountant do our taxes also means that if you ever get audited, you have a buffer between you and the IRS. We're big believers in taking advantage of the gray areas, so it's helpful to have a really good CPA interpret the law on your behalf.

[MDM4AU 337]

My dad once gave me good advice: Never scrimp on accountants or lawyers.

My wife's a CPA, but we always use a true tax accountant. I have my own business and we both own commercial property, so it's worth the 500 bucks we pay every year. Last year along, he shaved about 8000 off my taxes.

At the same time, having an accountant do our taxes also means that if you ever get audited, you have a buffer between you and the IRS. We're big believers in taking advantage of the gray areas, so it's helpful to have a really good CPA interpret the law on your behalf.

This was actually a Tax accountant. I thought about whether or not my terminology was accurate. And having the extra help if I'm ever audited (in my line of work with commissions paid on 1099s and such I understand I am more likely to get audited than many others) was a big factor.

[Ranger12 46]

Yeah, MD, the time alone is worth the price you pay. Since I know what he will need now and the fact that we save everything, it usually takes him about 30 minutes to do both federal and state taxes for us. I blows my mind all the things we can deduct.

Like Otter said, it is also nice to have that person there for you in case you get audited. Usually though, if you have a good preparer, you are more then likely never going to get audited because no "red flags" are going to pop up when your return is processed.

Similar to what otter was saying, my father-in-law makes around six figures a year and also has a ton of different types of investments in stocks, mutual funds, money markets, etc. The CPA that he uses, the one he has us using now, saves him a ton of money every year. He usually has to wind up paying because of his higher tax bracket and also because of the money he makes off his investments. When you are in a situation like that when you know you are going to have to pay in every year, then you really need somebody that knows how to shave off a few hundred bucks for you.

[otterinbham 0]

Some other things to realize that if you are self-employed like I am, it automatically raises big red flags, no matter how closely you adhere to the rules.

Last year alone, I got a pretty terse letter from the IRS informing that I owed them $11,000 in taxes plus penalties.

After hyperventilating, I handed the letter to my accountant who showed that several of my clients had given me a 1099 when, as a corporation, I wasn't supposed to get one. However, having an accountant knowing exactly how to word the letter and knowing the tax codes meant that the IRS basically said, "whoops, our mistake." That alone was worth the $500 bucks I paid him that year.

Here's something else I didn't realize. My tax accountant (who is a pretty conservative guy) says that you should never file until October 15th if you make six figures or own a business. That's because the IRS has much less time to evaluate your return for a possible audit. In addition you hold on to your money a lot longer.

[keoson7 28]

Gotta pay the tax guy, I can't even keep half arse records much less prepare a business return. Since I'm self employed, my existence is deductible. Every minute, I work....