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^ Why would I want to set up a fake corporation then have to go thru all the work of showing receipts, transactions and details of the company? My coworker did it and it was a part time job. Then the IRS got suspicious then audited him then that was that.
Someone help me understand, why do people in this country think it's a good idea to try and play against the IRS on their own? I work with numbers every day and I can't back out how it works. There is no logic to it. Unless you're an Accounting major or Financial Analyst please don't try to play the game....You will lose every single time.
I've been doing our taxes for 43 years. It is logical to me and it is just numbers. TurboTax has made my life easier than when I had to fill out forms in the old days. We don't need to play games to set up corporations to take losses. We're both self employed so our return is fairly complicated, but it's really no different than doing basic bookkeeping.
Those are bad Pros...Reporting depreciation against W-2 is like Accounting 101...Even I know that. Fire them get a new one. I must be really lucky because I have heard bad stories like this. However, that does not mean that Turbo Tax or DIY is the solution....
How complicated is your return?
In terms of the bolded...Not exactly. My grandfather knew all kinds of loopholes before he passed he studied the tax code as a hobby. When my CPA saw his past tax returns he was impressed. My grandmother was stubborn the year he passed and went to H&R Block - They f__cked everything up so bad the IRS asked for $11k until they realized he was deceased. So my CPA cleaned it up to the best of his ability to where she owed $0 from the estate. Prior to that he had been getting $5k back annually if not more.
My accountant charges $500 and we make about $200k gross combined in NYC and get back $1k from Fed and get back $2.5k from NY State. Most people in our income bracket get $0 back from Fed at best, owe at the worst. I have looked at some of the stuff my accountant does and I just don't think Turbo Tax can hack it. We'd probably end up owing if we did it through that. I understand the K-1 schedule but there are nuances which get factored in. I just don't have the time to understand it. I have my own day job.
There are "secret" formulas because my CPA manages people with net worth 10x more than me. His strategy changes year to year based on what happens with his 100+ clients. They take big risks (by their own volition, not his) and when they get audited or inquiries those learnings get passed down so then he knows what will and will not work for the average Joe like me. That's what you fail to realize it's like any other trade. He knows what will fly under the radar he has been doing this for 30+ years. It's not about cheating the system it's about leveraging the IRS's own rules. Turbo Tax is giving you like 10 simplified versions when in reality there are over 10,000+ customizations available. It's the difference between a standard browser and developer mode....Don't open the box if you don't know what you're doing or you might break something.
If you are a recent grad unmarried no dependents a regular full time job with one W-2 then Credit Karma tax return can work for you. Add 4 conditions to that and they can't handle the complexity.
There are 10,000 legal ways to minimize taxable income and the only difference between you and me is that I enlist the services of a professional who spends all day researching the tax code changes and strategizing on how to maximize his client's returns.
People need to respect specialization. Tax law is just like any other. It requires an expert. Not something Uncle Bobby should be handling.
Have you been audited since you started using this preparer?
I did them quickly just to see and suffice it to say, as an upper middle class income status filer I'm going to have to pay MUCH more than before. I think many in similar situations are in for a real shock.
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Those are bad Pros...Reporting depreciation against W-2 is like Accounting 101...Even I know that. Fire them get a new one. I must be really lucky because I have heard bad stories like this. However, that does not mean that Turbo Tax or DIY is the solution....
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You are absolutely correct. In that instance it was my insistence to not blindly trust the professional that saved me quite a bit ($23K was depreciated as a special 179 full depreciation which he thought should've been spread over 5 years. That specific year had a special exemption for the equipment I'd purchased). Keep in mind this was a Pro that came highly recommended.
In another example I had completed my numbers in TT and the professional firm had me getting $500 more than what I had figured on my own. I had to dig through the numbers to find out how I could've possibly messed something up. Come to find out, they had skipped repaying the 2008 home buyers loan payback thing which I'd told them to include.
I guess my only point here is even if one would use a professional, I think each person should dig through what is being filed for them and understand what is going on.
I am going to be hurt by the new tax law. I had a lot of itemized deductions that I won't be able to take. And the increase in the child tax credit doesn't help offset that because I had a child turn 17 last year, so she no longer gets it. I haven't entered it into Turbo Tax yet, though since we're still waiting for forms, and I've been busy selling Girl Scout cookies for my GS troop.
Sell a LOT more cookies!!...I'm in the same boat as you..also, the personal exemption is gone for you/spouse and the dependent has decreased from $4050 deduction per dependent (non child) to $500 !!!
My wife is working on them now. Last year we owed ~900 in federal tax and got a state refund. It looks like we will owe just under $5k this year!? Ouch. I hope that’s not right.
If you are a recent grad unmarried no dependents a regular full time job with one W-2 then Credit Karma tax return can work for you. Add 4 conditions to that and they can't handle the complexity.
The mistakes I encountered in both 1040.com and Credit Karma seemed pretty glaring to me. I think if you are going to roll out some tax software, it should be able to handle a 1099-R and a rental house with no problems, as those are very common items and not at all complicated.
Everyone I know who lives in New Jersey or California is crying on their facebook about paying a significantly more than last year because of the changes to the property tax deduction.
The tax plan was horribly punitive to certain people.
My accountant charges $500 and we make about $200k gross combined in NYC and get back $1k from Fed and get back $2.5k from NY State. Most people in our income bracket get $0 back from Fed at best, owe at the worst. I have looked at some of the stuff my accountant does and I just don't think Turbo Tax can hack it. We'd probably end up owing if we did it through that. I understand the K-1 schedule but there are nuances which get factored in. I just don't have the time to understand it. I have my own day job.
Your balance due or refund has nothing to do with the expertise of your preparer. That's like paying with a $100 bill and getting more change than someone who paid with a $50 bill, and thinking it must be because your cashier knew some secret that the other guy's cashier did not.
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