Income Taxes

[srblanco7]

Officially kicked off income tax season yesterday with the upload of tax documents to our accountant's client interface portal. Prior years had been a face to face meeting with me handing off a folder full of paper copies of documents.

I don't consider our financial lives to be all that complicated and was a bit surprised by the sheer number of document. I know I could do our taxes - but the hassle factor that comes with that many documents (as well as a prior IRS inquiry) - leaves me convinced that the money I pay for accounting services is worthwhile.

Do others use an accountant? I haven't yet seen what our effective tax rate is (relative to AGI) - will update later - but we're typically around 20% (-ish) for federal.

[Jluke]

DIY. Used the free fillable forms on IRS. Filed late Monday night. Deposit for refund will be happen this coming week.

[disneysteve]

I have always used an accountant. To be fair, my father was an accountant, so he did my taxes when I was younger. His brother and two sons were also part of the family firm. After my father's death, my one cousin took over our account and he did our taxes until he retired about 9 or 10 years ago. At that point, we started using a good friend of ours from our synagogue. And he just announced his retirement a couple of weeks ago. We are now using the firm that he sold his practice to. He's staying on in a limited capacity this year to review each return and educate the new folks about everyone's situation to make for a smooth transition.

Could I do it myself? I'm quite sure I could, but tax laws are always changing and keeping up with them is a full time job best left to professionals. I do help my daughter with her return, which is far simpler than ours. A W-2 and a few 1099s and that's it. Our return is far more complicated with our personal return, two business returns, self-employment taxes, various deductions, RMDs, and all of that. I'm quite happy to pay someone else to juggle all of that for us.

[ua_guy]

We've typically used an accountant. Last year ended up being super simple, so we're filing our own this year. Writing a big fat check as always, but that's how we plan it.

[kork13]

Except for a couple years in college, I've always just done my own taxes. Only time I've used an accountant was my first year or two in college, after my Dad & I both claimed my exemption ... so we got nasty-grams from the IRS, I had to re-file a correction, and I used an accountant friend of my mother's who lived nearby. I think she did it for me through the rest of college for me. Then in my first year after college & starting a proper job, I used one of those Volunteer Tax Assistance programs at my base ... but discussing it with the person & watching him basically just fill everything into the software, I became more confident with my simple returns, and started doing it all myself again. Been doing it myself (with software/free-fill forms) for the last 15+ years.

That said ... My taxes are definitely getting more complicated. We have to file returns for each child due to Alaska PFD & UTMA income. We've got our rental property, and this year the sale of our previous home. Next year, I should have my first set of K-1's to deal with from the RELPs I recently invested in ... So depending on how tricky the K-1 stuff is, I may have to get some help. We'll see... But I'm not eager to fork out hundreds of dollars for what I can typically do myself with a few hours of focused work. How much do people actually pay for hiring a tax preparer?

I'm still waiting for some 1099s, so I probably won't file until late Feb at the earliest. But I expect (as with the last couple years) that I'll owe some additional amount of taxes. I'm just grateful that as an Alaska resident, I don't have to pay state taxes. I do still have to file a return with OK (where our rental is at), but it's always a zero-due non-resident return.

[disneysteve]

How much do people actually pay for hiring a tax preparer?

We pay about $800 for our personal return and two small business returns for my wife and I. That also includes having tax and business questions answered throughout the year by email or phone and one or two tax planning conversations (how much to withhold from my RMD, an income projection for ACA, etc.) so it's not purely for preparing the returns.

[Fishindude77]

We use an accountant. Although retired, we are still involved with several businesses, have multiple income sources, etc.
All of our income comes in pre tax so there's almost always some tax to pay. Quit doing quarterly's a few years ago and just pay a lump sum at beginning of year based on projected income.
I believe the accountant cost around $1200 last year. It's worth it to me.

[srblanco7]

How much do people actually pay for hiring a tax preparer?

We paid $450 last year for our return as well as tax returns for each of our kids. I could easily do the kids returns - and may start doing - with their assistance so that they start to gain some insight into how the tax system works.

Expanding on my original post, we had an IRS inquiry related to settling my father's estate - and the accountant we use was able to quickly clear up the matter. That event convinced me that hiring a professional is a worthwhile expenditure.

[EasyMoney00]

I always run ours through two different tax software just to make sure I didn't screw anything up. If both come out similar then I consider it good.

Only ran it through one so far. Getting back $4700 in federal. Not sure about state yet. Not sure why we're getting so much so I consider that a fail on our part.

[GoodLiving]

I use a CPA who is also an attorney less than $200 and I'm so grateful. I just gather the documents.

[riverwed070707]

I pay $1200/yr. Last time I tried to file on my own it said I owed $5k+ - went to my CPA and she concluded I got a $200 refund. Haven't batted an eye at her fee since. I have a W2, an investment account that sits in a trust, 2 businesses and a real estate portfolio. I tried shopping around for a cheaper option a couple years ago and quickly went crawling back. Each year I schedule an in person, it takes us 1-1.5 hours and she submits my filing before I leave.