I Detest Tax Preparation

[Rich Riddle]

I absolutely detest tax preparation. I have to give my accountant over 50 pages of a completed form so she can do taxes. This last year we repaired property, staged it, and sold it. Then we purchased another property within 90 days and financed that. We also refinanced the home. The joys of tax season preparation. Literally hundreds if not over a thousand receipts do go through and get in the correct slot.

[Frederick Skelly]

I feel your pain Rich. I surely do.
Fred

[Dan Hintz]

Finished my taxes week before last, but before I could get SWMBO to sign them, she took off on a week-long cruise. Got them mailed today... not great, but at least it's out of my head. Looks like I need to rejigger some finances, too... refund was $18k+. Gov is holding way too much of my hard-earned money throughout the year.

[Jim Becker]

I've been doing my own for years using TurboTax. I put tax related things in a file folder throughout the year as well as code things like donations in Quicken so I can just run a report to check that I didn't miss anything. The only thing arduous about it is not forgetting something.

And Dan...yea...you need to adjust your withholding. Not only are you not having that money available to you, you're also making what is essentially an interest-free loan to the government. ;) Quite frankly, I always plan to actually owe a small amount which insures maximum take-home pay throughout the year. I know you know this, but I'll state it anyway for posterity since there are way too many folks who might read this who don't seem to know it...a tax refund is just that...a refund of overpayment. It's not a windfall. It's not found money. It's your money. :)

[Wade Lippman]

I actually find it easier to do it myself than deal with an accountant. The software asks all the right questions and probably picks up things I wouldn't think to ask an accountant.

Sadly, though Congress is totally paralyzed when it comes to reforming the tax code, they have no trouble making it more complicated.

[Greg R Bradley]

My bills for my CPA for last year are about $23,000 including an Audit for which I owe nothing. Do you feel better now?

[Ed Aumiller]

About 16 years ago our accountant for over 20 years made a mistake on the state portion of our taxes...
He paid the difference (just under $200) but the next year he decided he did not want our business due to HIS mistake.

It normally would take me about two weeks preparing the papers for him every February plus the record keeping through out the year..

So I bought TurboTax and used it with the papers I always prepared for the accountant... Been using it ever since as it is so easy
since 99% of the work is already done and basically just have to type it into the computer..

We find ItsDeductible by TurboTax is great for donations and Quicken is good for the rentals..
I also love that TurboTax will import direct from the banks and Fidelity all the interest, stock info, etc directly without having to enter it manually.
Also imports directly from ItsDeductible & Quicken.

The accountant's dropping us due to his mistake turned into a good thing for us..

[Ken Fitzgerald]

I quit doing personal taxes some 10 years ago.

[Kev Williams]

Just bought and sold a boat from the same place. This same place changed the oil in the outdrive in the boat they sold for us and left the upper plug/dipstick loose. The guy who bought our boat now needs the drive rebuilt...
And the same guys winterized the boat we bought by removing quick-drain lines from the engine blocks. Uh, that's why there's quick-drain lines! --And these same guys will likely rebuild my old outdrive...

Back in the 80's I bought a semi to enter the trucking business. It didn't work out, and had to file bankruptcy. Most people leave court with no bills to pay. Thanks to my lawyer, the court ordered me to sell my share of our engraving business and present them a check for the amount-- which was more than half the amount I filed bankruptcy on--

And because of the paperwork involved with the trucking business and losing it, I hired an accountant to help me. It was 3 years later he finally presented me with the good news: Somehow he determined that the truck actually made $22000 profit, and now I had back taxes and penalties to pay....


For these reasons-- Unless I simply can't fix it, no mechanic will ever repair anything of mine--

Even if I'm totally innocent and get charged with murder in the 1st degree, I will have a fool for a lawyer before I let a real one defend me--

And since my fiasco with the accountant who took 3 years to prove he couldn't count, no one but me will ever touch my books or do my taxes...

And yes, I HATE doing taxes. (I just barely got started too)

[Howard Garner]

I quit doing personal taxes some 10 years ago.



I quit seeing the professionals when they made a mistake on my non-resident return that cost me money.
Started doing them by hand and then transitioned to computers over the years.

Howard

[Brian Tymchak]

I switched this year from TurboTax to HR Block's software. It was $15 cheaper and I thought the UI was easier to use. I also thought its donation software (comparable to ItsDeductible) was easier to use. My taxes aren't all that complicated though.

[Phil Stone]

I switched from TurboTax to TaxAct when I got tired of TurboTax's rather predatory pricing model. TaxAct is great, and about a third of the cost (and they don't jack the rate if you file later in the season).

I resent the fact that it takes me almost a full Saturday to get my records together and fill out three forms (federal and two states). Why is our tax code so complicated that one either has to hire a pro, or else lose 1/365th of a lifetime to file? That doesn't seem right.

[Steve Peterson]

I know what you mean. I have done my own taxes by hand for years. The thing that bugs me the most is how they can make relatively simple equations so complicated.

For example, you add your long term capital gains to your income to come up with a total taxable income. But then every single calculation requires you to subtract away the long term capital gains so it can be multiplied by a different tax rate.

I am all for a flat tax, but suspect that TurboTax and H&R block lobbyists would prevent it from happening.

Steve

[Larry Browning]

I quit doing personal taxes some 10 years ago.


So, Ken you are saying you haven't filed your taxes in 10 years? I wouldn't be making that public knowledge.

[Chris Padilla]

Avid Turbo Tax user. My taxes aren't complicated enough for me to pay someone else to do it however we sold a lot of stock last year and have the opposite problem of Hintz up there: we owe Fed $19k! :eek: We also owe California $3k. I ended up needing to sell MORE stock to cover that payment so you can guess that it'll be high again next year!! LOL! It won't be as bad and I'll adjust my withholding a bit so the bite isn't as large. I do like Becker does and always TRY to owe and boy did I crush that one out of the park. :rolleyes:

[Lee Schierer]

I switched from TurboTax to TaxAct when I got tired of TurboTax's rather predatory pricing model.

If you buy Turbotax from Amazon rather than direct from them it is sometimes cheaper. The same applies to Quicken. If you buy it direct it costs more than buying it from Amazon.

[Phil Stone]

If you buy Turbotax from Amazon rather than direct from them it is sometimes cheaper. The same applies to Quicken. If you buy it direct it costs more than buying it from Amazon.


Honestly, I haven't missed TurboTax at all. TaxAct is every bit as good (for me, I imagine if one were a Quicken user, TT would be more valuable).

[Wade Lippman]

Avid Turbo Tax user. My taxes aren't complicated enough for me to pay someone else to do it however we sold a lot of stock last year and have the opposite problem of Hintz up there: we owe Fed $19k! :eek: We also owe California $3k. I ended up needing to sell MORE stock to cover that payment so you can guess that it'll be high again next year!! LOL! It won't be as bad and I'll adjust my withholding a bit so the bite isn't as large. I do like Becker does and always TRY to owe and boy did I crush that one out of the park. :rolleyes:

Try to sell some stock that is up, and some stock that is down; that way there is no tax. It can be worthwhile to invest so you can do that.

[glenn bradley]

Finished my taxes week before last, but before I could get SWMBO to sign them, she took off on a week-long cruise. Got them mailed today... not great, but at least it's out of my head. Looks like I need to rejigger some finances, too... refund was $18k+. Gov is holding way too much of my hard-earned money throughout the year.

No, that's really OK. They are paying you prime rate on it all year, right??? I try to get back as little as possible but, it does take some "rejiggering" now and again as the "let's keep changing it so they can never get a decent footing" department is working overtime lately.

[Chris Padilla]

Try to sell some stock that is up, and some stock that is down; that way there is no tax. It can be worthwhile to invest so you can do that.


Everything was up! :D

[Phil Stone]

Everything was up! :D


Sympathy withdrawn! :)

[Bruce Wrenn]

Being self employed and outright owning our house, our taxes are simple once I get the business ones done. I do them myself, as I have to get everything in order for someone else to do them. Heck, when you got the figures right in front of you, why not write them on the forms. As for "nationally" known tax software, friend, who is also self employed used one of the better knowns (which has been mentioned in this thread.) Program didn't figure any social security for three years. IRS caught it though, and with interest and penalties it was VERY EXPENSIVE, to the tune of several thousand dollars. Software program offered him his purchase price back- BIG DEAL!

[Dan Hintz]

Everything was up! :D


Sympathy withdrawn! :)


This made me chuckle...

[Al Launier]

I've been doing my own for years using TurboTax. I put tax related things in a file folder throughout the year as well as code things like donations in Quicken so I can just run a report to check that I didn't miss anything. The only thing arduous about it is not forgetting something.

And Dan...yea...you need to adjust your withholding. Not only are you not having that money available to you, you're also making what is essentially an interest-free loan to the government. ;) Quite frankly, I always plan to actually owe a small amount which insures maximum take-home pay throughout the year. I know you know this, but I'll state it anyway for posterity since there are way too many folks who might read this who don't seem to know it...a tax refund is just that...a refund of overpayment. It's not a windfall. It's not found money. It's your money. :)

Ditto & Ditto

[John Meyer]

I have used Turbo Tax for years, and it seems to work for me. But then I get a letter that some of the retirement plan members of which I am a part got incorrect 1099-R tax forms. I had already filed my taxes and now they tell me I will probably have to file an amended return when I get the correct form. Never have had to do that before. Always something new to learn.
John

[Howard Garner]

I have used Turbo Tax for years, and it seems to work for me. But then I get a letter that some of the retirement plan members of which I am a part got incorrect 1099-R tax forms. I had already filed my taxes and now they tell me I will probably have to file an amended return when I get the correct form. Never have had to do that before. Always something new to learn.
John

Turbo Tax can handle that

[Larry Browning]

I had used Turbo Tax for many years. I would always get an email from them informing me when the current year's version was available. It usually came bundled with both federal and state versions. Now I don't remember the exact cost numbers, but the general jest of it was that the previous year's version was $39 for both versions. I get the email, saying "Great news! The price of Turbo Tax has dropped to $29. That's a savings of $10 over last year!" Upon reading the fine print, it turns out that the federal version was $29, and the state version was $15 for a total of $44. So, they were pushing a price increase of $5 as a price drop. This marketing strategy did not sit well with me, and I have refused to purchase Turbo Tax ever since. I switched to Tax Act, and used that for several years, until my taxes got to be pretty complicated and started using a tax accountant.

[Wade Lippman]

Being self employed and outright owning our house, our taxes are simple once I get the business ones done. I do them myself, as I have to get everything in order for someone else to do them. Heck, when you got the figures right in front of you, why not write them on the forms. As for "nationally" known tax software, friend, who is also self employed used one of the better knowns (which has been mentioned in this thread.) Program didn't figure any social security for three years. IRS caught it though, and with interest and penalties it was VERY EXPENSIVE, to the tune of several thousand dollars. Software program offered him his purchase price back- BIG DEAL!

I have serious trouble believing that tax software didn't figure your friend's SS for 3 years. Millions of people with SS use them; somebody (probably many thousands) would have noticed the first year and it would have made the national news. Surely the error wouldn't have persisted for the 2nd year.

Two years ago my federal taxes on H&RBlock were much lower than I expected. I certainly got to the bottom of it before filing. Turns out Congress failed to renew the tax on qualified dividends and the software was correct. (Thank you Congressional gridlock!)

[Rich Riddle]

I am not certain what happened in the circumstance discussed. What I have noted in the past while using tax software for folks with much simpler taxes was that the software remembers from year-to-year what you input and didn't input in every box. Consequently, if a person didn't input an item in a specific box on the initial year, it becomes very easy to gloss over in subsequent years. It's even that way with the taxes I get ready for the accountant. I had to call to ask for answers concerning a house refinance today. She didn't include that in the packet because it was never done in the past. That is just one possibility. It's more than likely, an accidental omission on the initial year.
I have serious trouble believing that tax software didn't figure your friend's SS for 3 years. Millions of people with SS use them; somebody (probably many thousands) would have noticed the first year and it would have made the national news. Surely the error wouldn't have persisted for the 2nd year.

Two years ago my federal taxes on H&RBlock were much lower than I expected. I certainly got to the bottom of it before filing. Turns out Congress failed to renew the tax on qualified dividends and the software was correct. (Thank you Congressional gridlock!)

[John Sanford]

I actually find it easier to do it myself than deal with an accountant. The software asks all the right questions and probably picks up things I wouldn't think to ask an accountant.

Sadly, though Congress is totally paralyzed when it comes to reforming the tax code, they have no trouble making it more complicated.

Wade, you are such a comedian!! Whatever in the world would lead you to believe that "reform" means "simplify"? Heck, "health care reform", whatever one may think of the merits of such an undertaking, certainly didn't simplify things. "reform" can mean "simplify", but such is rarely the case whenever City Hall, the State House, or Congress get's involved.

Finally, with regards to the thread title. EVERYBODY detests tax preparation. Including accountants. Accountants simply detest it less because they at least get to make some money off it.

[Rich Riddle]

Well I finished the taxes last night and drove them to the accountant today. It's over.

[Wade Lippman]

Well I finished the taxes last night and drove them to the accountant today. It's over.

I bet he was thrilled to see you at the last moment.

[Clint Baxter]

Wade, you are such a comedian!! Whatever in the world would lead you to believe that "reform" means "simplify"? Heck, "health care reform", whatever one may think of the merits of such an undertaking, certainly didn't simplify things. "reform" can mean "simplify", but such is rarely the case whenever City Hall, the State House, or Congress get's involved.

Finally, with regards to the thread title. EVERYBODY detests tax preparation. Including accountants. Accountants simply detest it less because they at least get to make some money off it.

Actually, I don't detest Tax Preparation. I run a Volunteer Income Tax Assistance site at the local Air Force Base. We end up doing returns for our clientele for free. The IRS certifies us and we are limited as to what returns we are allowed to prepare for our clients, but we are able to do the majority of the individuals that come to us. We had nearly 1000 clients this year and I turned away less than 10 customers.

What I detest is how many returns there are that are done wrong. By companies/individuals that are being paid to perform that service. Many times I need to review our clients returns from previous years and I regularly find errors in how they were done. The majority of the errors I've seen have resulted in the taxpayers paying too much tax. I find it abhorrent that these people are paying the amounts charged by these tax preparation sites and sometimes by accountants as well, and they are not getting a correct product.

From what I've seen, the majority, if not the vast majority, of individuals out there go to a preparation service out there, pay their fee and expect that it is done correctly. And they typically have no idea whether they get it or not.

Self preparation using software is a viable option, but I've found many, many errors occurring there as well. Individuals either don't understand the questions, provide the wrong answer(s) or often input incomplete or incorrect data.

I'm glad to hear that so many of you out there seem to be doing okay on your own tax preparation, be it through software, accountant or other method. I do agree fully that unless you have a sound grasp of what needs to be on your return, and where it is reported, that you're more than likely to do yourself a disservice. Thankfully the IRS has less resources to go after everybody who makes any type of mistake on their taxes, but as I'm sure many can attest, they still catch many errors. Usually seems to be about Christmas time that the dreaded letters seem to show.

Hopefully everyone got their taxes already done. If not, remember that we have until Monday to get them filed. :D

Clint

[John M Wilson]

Many times I need to review our clients returns from previous years and I regularly find errors in how they were done. The majority of the errors I've seen have resulted in the taxpayers paying too much tax.

Clint

Thanks for a thoughtful post (from the front lines)...

What are the typical errors that you see? (This might be a good way for us who only think we know what we're doing to find out if we are making the same mistakes as the paid professionals.)

[Clint Baxter]

Some of the most common errors i see are not claiming a dependent or not claiming education expenses paid for a dependent.

The time when a child who is away at school is considered a temporary absence and they are considered to still be living in the household.

Any tuition that is paid for is considered having been paid for by the individual who claims the dependent. Whether paid from student loans, out of pocket but the taxpayer or the dependent, or even if paid for by a grandparent or other family member. Can't use anything paid for by scholarships,grants or government assistance such as tuition assistance or GI Bill.
If an individual qualifies for American Opportunity Credit, education expenses include amounts paid for books and supplies. Books usually are not able to be claimed as an education expense. (Can be claimed only if they are purchased form the institution s a condition of acceptance or enrollment.)

Earned Income Credit still is often unclaimed. A child who is under age 24, a full time student, and lives with you over half the year, (remember temporary absence listed above), qualifies for Earned Income Credit.

The other most common error I've seen involves depreciation when someone is renting out homes/buildings. (This primarily happens with new rentals by individuals having never rented out properties before.)

Clint

[Chris Padilla]

Both the Fed and CA took their payments out today from my account. Figures when money is due, they are right on time!! :rolleyes:

[Rich Riddle]

Both the Fed and CA took their payments out today from my account. Figures when money is due, they are right on time!! :rolleyes:
I contract with the feds. In the billing process, when they find the first error or omission, they return the paperwork and don't pay for a minimum of 90 days. You resubmit and they wait. They find another error, it starts the process over again. You get the idea. I finally went to a billing company that guarantees to correctly check all the boxes. Some folks can wait over a year for payment. Now if you are late they charge a penalty, interest, and fees. And don't make an error on the paperwork when you owe them money either.

[Bruce Wrenn]

I detest spending a half hour on a form to find out that I didn't need to do it in the first place. Now that I'm drawing my SS, it frosts me to have to pay in money (self employment tax) that will never do my benefits any good. Friend retired a second time at 92 because of this issue. Wrote the check and mailed them today. What's a refund? Don't believe we have ever had one of those. When they did that stimulus thing a few years back, we got a reduced amount.