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Old 12-31-2008, 06:44 PM
 
124 posts, read 346,972 times
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I am ignorant when it comes to taxes. This year, I want to make sure I do it right because my wife and I doubled out income this year. We also have a more complex financial situation. We've paid a lot of education, student loan interest, and mortgage interest. I don't know if I should just go through turbo tax, or if there are significant advantages to paying a knowledgeable human to do the job.

Any thoughts on this?
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Old 01-01-2009, 10:06 AM
 
3,553 posts, read 7,064,198 times
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Well, there's "complex" and then there's COMPLEX. Congratulation on doubling your income, but nice as it is that's not complex. I'm not sure if student loan interest is deductible or not, don't think it is. But mortgage interest and property taxes are deductible.

Before I'd spend the money on turbo tax I'd sit down with the PAPER FORMS. I don't know why everyone thinks the tax forms are so confusing, if you can READ, and follow instructions they're not!

OTOH, if your situation is really complex a CPA is the only way to go. But nothing in your post makes it sound like that's what you need! I can recommend that you DON'T use any of the "quickie" tax prepartation guys, H&R Block, Jackson-Hewitt etc. Those people get a quick course on how to fill out the papers. If you're smart enough to double your income, you're smart enough to figure out a 1040 and schedule A and B!

We've used CPAs for the past 25 years, but our situation is really complex. A lot of rental houses, some mortages that we COLLECT INTEREST ON, I'm self-employed, my wife was self employed and we have a fair amount of capital gains income, both short and long term each year. Even with that I think I "could" do ours (without Turbo Tax), but the $500-$600 I pay a CPA lets me sleep better at night!

golfgod
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Old 01-01-2009, 10:24 AM
 
7,100 posts, read 24,962,622 times
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There's a very good chance that a CPA will remember things that you might have forgotten. For anything other than the simple returns, they are worth the cost. Plus, you can count their fee as a deduction on the 2009 return.

Good luck!
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Old 01-01-2009, 10:56 AM
 
Location: Jollyville, TX
3,998 posts, read 9,730,614 times
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I've done it all. Paper forms, CPA, tax preparer, and Turbo-Tax. Turbo Tax does a really good job of asking the right questions to prompt you to put in the appropriate data. I think it's as good as an HR Block or Jackson Hewitt, but not as good as a CPA.

What I'd recommend is buy the basic Turbo Tax and see if it gives you what you need. CPAs aren't cheap, but if it looks like you're going to have to pay, it might be worth paying a CPA to help you minimize your tax liability.

Here's a little side note: The year my mom's estate was settled, we all received a K-1 form with a loss from the trust based on the settlements of her rental property. My portion of the loss was $11000. Turbo Tax prompted me to plug that in and as a result, I was able to deduct the loss and received a refund. I tried telling my other siblings that they could deduct the loss and no one wanted to listen! Their loss (literally!).
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Old 01-01-2009, 11:31 AM
 
Location: Wouldn't you like to know?
9,114 posts, read 15,967,950 times
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I actually work for one of those "quickie" tax preparer guys as a poster described. Not everyone who works for them are cut out of the same mold. I can and have done complex returns.... So no need to paint a broad brush.


The return that the OP described is really not difficult. (to me at least). As long as you have all your 1099's & w-2's (and you are forthright and honest if you lack detailed records) its not a big deal.


If I were the OP I'd shell out the $50 and go with Turbo Tax. Why not? you might be surprised how easy it is to do. Just give yourself and hr or so of quiet time and it shouldn't be a problem.


If your not comfortable during the process, then I would talk to a friend to find some local recommendations...(word of mouth usually works very well).


good luck!
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Old 01-01-2009, 02:13 PM
 
124 posts, read 346,972 times
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Well thanks everyone. I think I'm just going to shell out $50 and use turbo tax. That's what we've done in the past, and they already have our information saved. I just wasn't sure if I was a sucker for using turbo tax or not. I know that I felt like a sucker the year I went to my local H&R block and had to pay $140 for the service, especially since my wife and I had only made $15k that year. What a rip off that was.

I'm just getting nervous about having to pay the IRS a chunk of money. I'm not sure what's going to happen.
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Old 01-01-2009, 07:45 PM
 
Location: Wouldn't you like to know?
9,114 posts, read 15,967,950 times
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Quote:
Originally Posted by mtb83201 View Post
Well thanks everyone. I think I'm just going to shell out $50 and use turbo tax. That's what we've done in the past, and they already have our information saved. I just wasn't sure if I was a sucker for using turbo tax or not. I know that I felt like a sucker the year I went to my local H&R block and had to pay $140 for the service, especially since my wife and I had only made $15k that year. What a rip off that was.

I'm just getting nervous about having to pay the IRS a chunk of money. I'm not sure what's going to happen.
Your welcome. Telling you to use TT actually hurts my business, but its the right thing for you to do (or at least try first).

Some people use JH, H&R, Liberty etc...for various reasons (right or wrong, that's not for me to decide). They provide a valuable service and many people I've dealt w/walked out quite happy. No one is forcing them to walk through the doors.

before I even do my taxes "officially", I print out the forms on irs.gov and do it in pen..(just to see how much I'm getting back)..which I know already for 2009.

g/l and let us know how it turns out.
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Old 01-01-2009, 09:47 PM
 
Location: Los Angeles Area
3,306 posts, read 3,558,423 times
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Your situation isn't complex, you should be fine with a paper and pencil and/or turbo tax.

I'm always surprised at the large number of people that go to accountants. I'm not a CPA and I could do their taxes for them in 20~30 minutes. Often people seem to think they know these "trick deductions" or something. Anyhow, being knowledgeable about taxes can really help your bottom line over your life time. Knowing exactly how you are taxed etc will allow you to use that information in your financial plans.

Anyhow, I hate doing my taxes. Have to fill out around 40 forms for federal + state. Last year I owed $2,500 or so.
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Old 01-02-2009, 09:31 AM
 
28,453 posts, read 73,510,312 times
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CPA's are useful for a heck of lot more than tax preparation. For people that have the ability to schedule future event in terms of income / loses the advice of a skilled tax adviser / CPA can be invaluable. The best also have a solid understanding that EVERY bit of knowledge comes with certain "probability" of correctness. You don't simply want to know what is legal / required when it comes to planning for future events, you want to have degree of certainty that the actions you take will have a positive outcome.

It is not unlike chess or other strategic plans -- by structuring income and future events you increase the likelihood of positive outcomes AND give yourself increase flexibility to deal with unanticipated changes.

The best CPA's have a broad vision of not just tax regulation, but the whole picture of what parts of the income and tax collection picture are very unlikely to change and which are in flux.
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Old 01-02-2009, 09:42 AM
 
Location: Orlando, Florida
43,857 posts, read 45,533,815 times
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I've always done my own taxes and mailed them in as early as possible. I usually get a direct deposit return within 14-21 days of filing. However, if I had more deductions or could utilize the various schedules, I would get professional help. The laws change from year to year and usually only a CPA will be up to date on the newest forms and deductions available to you. Of course it will cost some money to hire a CPA, but in the long term I would think it is more than worth it.
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