By Dr. Margaret Curtis, WCI Columnist
As I write this, we are in the middle of hockey season, the sun is setting a little before 5pm in Maine, and the 2022 tax forms are arriving in my mailbox. By the time you read this in April, both the backyard hockey rink and the tax returns will be done for the year, and we will be well into mud season. My husband builds and maintains the rink and I do our taxes, and we both agree that his job is a lot harder and more time-consuming than mine. We also agree that keeping our tax returns in-house has had benefits for our financial life. If you have been intimidated by the idea of doing your own taxes or are trying to figure out where to start, this is for you.
My husband and I used to have a CPA who did our personal taxes and the business accounting for my husband’s solo practice. We paid about $1,200 yearly for the service—which, back then, was itself a tax-deductible expense—and we were glad to do it. At the time we owned that practice, we had three kids under the age of 7 and no extra bandwidth. We both thought that while you can DIY a lot of stuff, taxes are best left to the experts. I didn’t even question when our CPA suggested that we could lower our taxes by refinancing our mortgage and deducting the interest (this is wacky, I know that now).
About 10 years ago, I decided to do our taxes myself. I hadn’t done them since I was 25 and my annual gross income was $23,000, but I was trying to whip our family finances into shape and I wanted to understand where all the money was going. I also wanted that $1,200 for myself. I’ve done them every year since then, and I’ve even helped my friends with their taxes. Nothing in this article should be taken as criticism of CPAs as a whole, and I would love to hear from CPAs in the comments. I’m going to tell you how I do them, why it isn’t that hard, and why I think everyone should do their own taxes at least once.
#1 How to Get Started on Your Own Taxes
First, I start a new tax file at the beginning of every year, and when I get a document related to taxes, I print it and file it away. This could just as easily be done by scanning documents into a computer file. I don’t sort or label them until it’s tax time, and then I put them into categories: employment income (W2s and 1099s), rental income and expenses, investment income, property taxes, and charitable donations. Now that I have a kid in college, I also have 529 account statements for his return. I put categories together with a paper clip and a sticky note. See? Not hard.
If you use a CPA, you will need to have at least this level of organization because they won’t come to your house and go through your files for you.
Which brings me to the first reason you should do your own taxes:
You Will Keep Better Records
If what I have described sounds worlds removed from what you are doing right now and if what you are doing right now involves shoeboxes full of receipts, I am here to tell you that you can do this. Your financial life will be better for it. You will know which documents are important and where they are located. You will have less digital and actual clutter: no more shoeboxes.
More information here:
12 Things I Learned From Doing My Own Taxes as a Kid
How Do Rich People Avoid Taxes?
#2 Entering Your Tax Information
Next, when I have all my documents organized, I enter all the information into TurboTax. In the first year, using an online service is a little more labor-intensive because you have to enter all the information for everyone in your household (Social Security numbers, employers, etc). Subsequent years are easier because the system saves your basic info, and you just update and edit.
I use TurboTax, but there are other online tax programs out there and they all provide a similar service. All offer a free version that is fine for basic returns, and all have additional levels of service (such as audit protection) for a fee. I have paid anything from zero to $70 to do my return online. I have paid extra to get advice from a CPA, although what they can offer is limited by the level of service. This is fair enough: I don’t offer advice on complex medical problems via a portal message, and I don’t expect guidance on complex tax topics for $70.
The second reason to do your own taxes:
You Will Save Money
CPA fees are a lot higher now (I was quoted $4,000 for a package that didn’t include any planning), and they are no longer tax-deductible (the deduction for tax preparation fees for personal returns was eliminated in the 2018 Tax Cuts and Jobs Act, which also capped mortgage interest and state tax deductions). Even if I spend 10 hours doing my taxes, I get a pretty good hourly wage for my effort (It actually takes me less than 10. Not bragging or anything). Of course, there is a tipping point at which the deductions I miss are worth more than the cost of a tax plan and a professionally prepared return.
One of the peculiarities of the tax code is that if you aren’t aware of a deduction, you can’t take it. This is the government saying, “Guess what I’m thinking.” Our taxes are a little more complicated than average (two W2 incomes, two side gigs, and one rental property), but I still feel confident in the returns I’m filing. How will we know when we have reached the tipping point? If we ever open another practice or get serious about real estate investing, we will hire a professional to make sure we get all the complexities right. Your tipping point might be sooner—or later.
More information here:
Is TurboTax MAX and Audit Defense Worth It?
#3 Should You Itemize or Take the Standard Deduction?
The tax program guides you through entering your data and advises you whether to take the standard or the itemized deduction. A deduction allows you to subtract from your income before you calculate the tax. The standard deduction, which anyone can take, has been rising in recent years ($12,950 in 2022 for a single person; $25,900 married filing jointly). An itemized deduction is the sum of every tax-deductible expense you incurred, such as charitable donations, mortgage interest, and state taxes paid (up to a limit). You can use whichever is larger.
Another reason to do your own tax return:
You Will Understand Our Tax Code
Just kidding, you won’t really. The US tax code is notoriously complex, and tax software actually obscures a lot of the math for you. You could still miss some of the most important features of our tax system if you don’t spend some time figuring out what the numbers mean. Some of the concepts I think are most important (from least to most obvious):
1) Our federal tax system is progressive. Income is divided into aliquots (brackets), and each aliquot is taxed at a different percentage. Everyone pays the same tax rate on the first aliquot (10% on the first $10,275 for a single payer in 2022, and $20,500 for MFJ). Higher brackets have higher tax rates (37% on any money over $539,900 for that same single payer and $647,850 for MFJ).
If you are a single payer who earned a resident salary of $65,753 in 2022 (without taking deductions):
- Every dollar up to $10,275 is taxed at 10% ($1,027.50).
- Every dollar from $10,276 to $41,775 is taxed at 12% (31,500 x 0.12 = $3,780)
- Every dollar from $41,776 to $65,753 is taxed at 22% (23,978 x .22 = $5,275.16)
- You would pay a total of $10,083 (without any deductions).
In mathematics, this is called a “piecewise function,” or a function that has different formulas for different intervals. If you’ve ever calculated the maintenance fluid rate for a pediatric patient using the 4/2/1 rule, you’ve used a piecewise function. (Pediatricians do this stuff in our sleep. I’m explaining this for the rest of you.) The piecewise function for this taxpayer is: f(x) = 1027.5 + 3780 + (x-41775)*.22.
2) There is a difference between your marginal tax rate (the rate at the highest bracket you reached) and your effective tax rate (the percentage of your income you pay in taxes). Your effective tax rate will be lower than your marginal tax rate, because it is an average of all the tax rates across all the brackets your income falls into. The single payer earning $65,753 has a marginal tax rate of 22% and an effective tax rate of 15.3%.
3) Deductions are good, but credits are better. Deductions are subtracted from your income before taxes are calculated. If your marginal tax rate is 32%, a deduction of $1,000 will save you $320 (0.32 x $1,000) on your taxes. A credit is subtracted from the tax you owe. No matter your marginal tax rate, a tax credit of $1,000 will save you $1,000.
If you just handed all your forms off to a CPA, you might never understand these. You might think that deducting your mortgage interest is actually saving you money when actually it’s just giving you a discount on the money you are giving to the bank. You might embarrass yourself at the next WCICON by saying things like “no point in getting a raise, it’s just going to increase my taxes!” (if you don’t understand why that’s incorrect, reread the section above about marginal and effective tax rates). I wouldn’t want that for you.
#4 Review It and Hit Send
Now, I review my inputs a few times and the final return before I hit send. This is the point in the process when I see how much we have paid in combined federal, state, and property taxes. You would think after all these years I wouldn’t be surprised, but somehow I am. I will spend the next month in high dudgeon, which will gradually wear off until the next tax season when the cycle will repeat itself.
Reason number next to do your own taxes:
You Will See Where the Money Goes
My family doesn’t have a budget in the sense of “this is how we will spend for the next month.” What we do have is a retrospective of how we have spent money over the past year that we refer to so we can track our progress and plan for big expenditures. This information comes from two sources: our credit card statement (and more specifically, the end-of-year credit card summary) and our tax return. Our incomes, property taxes, rental property expenses— all items that show up on a tax return—vary year to year, some a little and some a lot. I use the tax-time reckoning to make sure I am operating with the correct numbers. This also serves as a reality check.
There is really nothing like cold hard numbers to make your financial situation clear. If you have an inflated sense of your own income, seeing all the money that gets taken out before it even hits your bank account will bring you back down to earth. You will also appreciate your pretax retirement contributions in a whole new way.
More information here:
You Should Invest Like a 50-Year-Old Woman
#5 Finally Done
Once my taxes are submitted, dudgeon blends with pride for a job well done. I have never been audited, and I don’t really worry about the prospect. I report all our income and have receipts for every deduction I claim. Fear of an audit is one of the biggest reasons people use CPAs, but this fear is probably overblown if your return doesn’t contain any common audit triggers: wild deductions, crypto transactions, foreign assets, sketchy tax shelters that a good CPA would warn you away from anyway. Business taxes are more complicated, and they may be more likely to trigger an audit, which is why starting a business would be a reason we would use a CPA. Tax programs offer audit protection for a fee if that is important to you.
Which brings me to the last reason to do your own taxes:
You Will Be Empowered
Doing your own taxes is like learning any new skill: once you figure it out, you start thinking about other things that once seemed hard. Maybe you wonder if those are within reach as well. You might take on doing your own financial planning. You will definitely be able to engage intelligently with anyone you might consult with about your taxes in the future. You might decide that you would really rather do something else with your time (like build a backyard hockey rink), but it won’t be because you’re intimidated.
Do you do your own taxes, or do you offload it onto somebody else? Is working through your own tax return a worthwhile investment? Or is it not worth the stress? Comment below!
Your example for the resident could be improved.
“If you are a single payer who earned a resident salary of $65,753 in 2022 (without taking deductions):”
Gross to net pay is important to understand the W-2. Pretax deductions are valuable.
“ If you have an inflated sense of your own income, seeing all the money that gets taken out before it even hits your bank account will bring you back down to earth. ”
This not on your tax return or W-2 or your credit card statement.
•Everyone should reconcile the YTD last paycheck to the W-2.
•Everyone should read and understand
Itemized deductions is where the frustration and “boxes of receipts” come in. Schedule A is pretty simple by category and easy to understand. The standard deduction is now a pretty high hurdle. I hate to see my wife struggling for hours sorting and adding up copayments on prescriptions and office visits to be so disappointed that Standard Deduction is $29,500 and the screwy percentage of gross.
If you understand Schedule A and can reconcile your YE paycheck to the W-2 that’s good enough for most.
Real estate is another world. Seek advice.
Thank you for reading and commenting. I think we are saying the same thing (or I’m not understanding how the example given could be improved): there is a big difference between pre-tax and post-tax earnings, and it is important to understand how those pre- and post-tax deductions work.
And I just use Turbo Tax to tell me whether to itemize or use the standard deduction. Eliminates hours of arithmetic and potential errors.
Turbotax can be hard and glitchy at times.
Also sometimes when you call for help, the people you reach don’t know about more complex topics like Backdoor Roth, or even how to enter HSA for the family.
Any tips on how to ask for more experienced and helpful tax advisors when you ask for a call back?
Yesterday after I entered one of our rental properties, it asked me if I wanted to see if I was eligible for QBI deduction, and I clicked yes, and then rather than pulling in our other rental property info from last year, it made me enter the info in de novo.
Agree TurboTax is less than intuitive on HSA’s abs backdoor Roth, but it actually has a pretty useful search function that will take you through step-by-step guides on how to document your backdoor Roth and HSA’s. You can find the search function on the top right. Eg search “backdoor roth” will bring up first result “how do I enter a Backdoor IRA conversion?”
It’s also important you understand how these forms actually work (this blog helps) to make sure you’re filing correctly. If you look at IRS form 8606 for backdoor Roth and form 8889 for HSA’s it should help you answer the TurboTax questions. For the most part TT walks you through each line of those forms, though not always in the order they appear in the form.
Like the OP I have previously worked with a CPA and still do my own taxes. Even if you use a CPA it’s good to understand your taxes so you know what’s going into your filing and you can catch errors. One year I caught a CPA’s error on form 8606 that would have cost us thousands by incorrect documentation on the Backdoor Roth. Over the years I’ve found the biggest time suck is getting all the documentation together and can’t agree more with tip #1 – start a file and archive tax documents as you go through the year.
I agree with Dual Physician Family (same here, hi!) about the search function. Sometimes I find myself in a Turbo Tax mini-loop and I use the search function to get out of it. A few years of doing my own taxes has helped, so I know what I need to enter. I also rely on my document file: I have a K1 form here, it must go somewhere, let’s enter it in the search bar.
I have also had the experience of getting less-than-ideal live help from Turbo Tax. In my case it was about an obscure inheritance (shares in a land trust that had closed), and the advisor basically didn’t want to commit to anything. But they absolutely should be able to guide you in entering HSA and Backdoor Roth info! If you can’t get anyone there to help, you can google your question or ask in the WCI forums – people there are super helpful and knowledgeable in my experience (and I prefer the forum on the WCI website to the social media accounts).
I completely agree, especially with the point about empowerment! I teach people DIY tax prep in my small side business and so far- no repeat customers 🙂
That’s so cool! what is your side business?
Thank you! It is called Frequently Taxed Questions and I do sessions for learning DIY tax prep and other finance-related coaching, like gaining a better understanding of retirement plan menu options. My own financial empowerment began when I did my own taxes as a college student and after doing volunteer taxes with VITA for several tax seasons, I do believe most people are fully capable of doing their own – many could just use a holding hand the first time to provide some reassurance along the way.
I think another key concept is that the U.S. federal tax system is pay as you go. Thus, your tax refund / what you owe in April is a settling up of the difference between your tax liability for the year vs what you’ve already paid along the way.
That is such a cool business!
Stephanie,
Do you know how I can find someone in my area that does what you do? My very experienced tax person has made some mistakes on my 2022 returns and hasn’t fixed them yet. I muddled through TurboTax on my own, but still not sure if it is correct.
Hi Greg – I’m sorry you’re dealing with this. For your return filed last year, it seems totally unacceptable for your preparer to not have addressed this with you by now. I think you should check out today’s blog post that discusses this exact topic: https://www.whitecoatinvestor.com/taxes-309/ (the transcript from the podcast)
It has a link to several tax firms WCI recommends. If you are interested in a pro who does things for you, that seems like a good starting point. For my approach, I work with people on Zoom calls so location is not important. If you want to message me and give some info about the nature of your issue, I will tell you if I think it is something within my knowledge or not (if I think it is not, I will tell you.) I’m at [email protected]
Thank you Stephanie for replying! I called the office that did our taxes for an update. They said they would get back to us by Friday, April 7. I know they are busy, but this was three weeks ago and it really should only take them a few minutes to verify the errors. Our taxes are not complex. We are retired, so no earned income. Just pensions; social security and dividends/interest. If I understood the tax system enough I would send, I believe, a 1040X. Thanks again!
Having a backyard hockey rink is seriously one of the best decisions we’ve ever made! My family and I absolutely love it. We’re always out there, skating around, having a blast, and it’s such an amazing way to stay active during those chilly months. My kids? They’re on it all the time, playing with their friends, and it’s great to see them building lifelong memories. Plus, it’s a perfect spot for the whole neighborhood to come together and have some friendly competition. And, you know what? My kids have gotten so much better at hockey since we built the rink, it’s unreal! It’s been a game-changer for us!
Could not agree more! I can’t even count the hours the kids and their friends (including neighborhood kids who just show up) have spent out there under the lights. Some times they play real hockey, sometimes they just noodle around, and whatever they do they are outside, together, and having fun. My husband and I can watch the goings-on without intruding so we know what the teenagers are up to. We are lucky enough to have neighbors who enjoy the scene too, and don’t mind all the pucks that inevitably end up in their back yards. Thank you for reading and commenting!
Thank you for the excellent article! I think it’s great advice that I hope to follow at some point. It’s always a tricky calculus of what activities should be outsourced for convenience. Sometimes that saves me time in the short run but then my skills and knowledge atrophy in the long run.
Since I stopped doing my taxes I feel like my understanding of the mechanics has declined as I lazily send the source documents to my accountant. Each year I delude myself into thinking I’ll independently do part of it as a cross check of the accountant and to aid my understanding. But it’s very hard for me to motivate myself to do that without actually doing the taxes myself.
I think your advice is great, and one of these years (hopefully next year’s filing!) I will try to conjure up the motivation to follow it. Thanks again for the great column!
Thank you for the kind words! I agree that we all have to pick and choose what we do with our limited time and bandwidth, so I was hoping to show that DIY taxes has a greater return-on-time-spent than just the money saved on accountant’s fees. I don’t mind doing ours, but if it was keeping me from doing things that are more important to me – like hanging out with my kids by the rink 🙂 – then I would outsource.
Oh, two more important reason to know how to do your own taxes!
1. If your income varies significantly from year to year, it’s very helpful to start filing in late January/ early February so you know in advance if you’ll have to make a large tax payment in April. Alternatively, try not to increase your income or give it all to charity in December so you can avoid large tax payments the following year.
2. Additionally, families with multiple income streams really need to pay attention to taxes. W2 withholding will not keep up with your tax liabilities if you / your spouse have various streams of income from multiple W2’s or 1099’s. This can substantially effect the taxes you owe at the end of the year, even if your total income doesn’t change much, because each employer will only withhold taxes for their portion of your income. You’ll either need to to keep track of everything to submit estimated taxes as you go, or cough up some big bucks in April with risk of late penalty if you’re not in the safe harbor. You can pay a CPA to help you keep track of estimated taxes and file quarterly 1040-ES if you wish, though it’s really not that complicated and you’ll have to provide all the records anyway.
Great points! And if you change jobs mid-year, or have big taxable events, your withholdings could end up way off.
Main reason I make sure to watch our income and make estimated tax payments in a timely manner: I sure as heaven don’t want to have IRS required tax withholding on all my various income streams such as interest, dividends, or IRA withdrawals. Since I never know what the mutual fund distributions will be in December I often end up doing the annualized estimated tax form and some years still pay a small late penalty. But ensure I can catch up for the most part by January 15 (last estimated tax payment for the prior year), or make $0 payment then since I have over paid. As our income settles out post retirement/ post Roth conversions that may even out but not so far.
I could not agree with you more, Dr. Curtis. As a first-year attending, I just asked an associate in the practice what CPA he used for tax prep. I did the same. This experienced professional made a fairly costly mistake of not noticing that I was eligible for a retirement plan, but instead did a SEP-IRA. The IRS balked, charging me interest and penalty for the oversight. The CPA said he was sorry, and would do better next year, paying the interest but not the penalty. That was the start of my doing my own taxes, on paper, for the last 35 years. It has been just as you say, a huge boon to understanding the tax code as well as budgeting, planning, saving, estimated tax, etc. I have a much better handle on yearly income, expenses, and taxes. Have I made mistakes? Undoubtedly, but no audits and nothing huge. I follow the instructions and take what is legal, nothing more and nothing less. Even my elderly CPA father-in-law asked me to look at his taxes one year (he died of Alzheimer’s in 2021), as he thought I would know where he had made a mistake. I promptly reassured him that his Schedule D looked great and that there was no problem! His failing mind was fooling him, but he still did it correctly. Thanks again for the endorsement and encouragement to keep doing these. I tell my wife that it is just a big jigsaw puzzle where I have to fill in the numbers to get the answer. It almost makes it fun, almost!
Thank you Dr Kettinger! and well done on 35 years of self-sufficiency. That is a sweet story about your father-in-law – both that he asked for your help, and that he was still able to do his taxes later in life – I suppose for a CPA filling out a schedule D becomes almost a reflex!
You’re lucky the CPA paid the interest for the mistake. The norm is that most won’t pay penalties or interest
I make occasional errors- think IRS has corrected my math twice already in 40 years even once in their personnel deficient recent years- but often the IRS is in error but happily accepts my explanation (eg incorrect 1099s due to mutual fund company’s records not tracking back far enough). Weirdest years: both US and UK income. British accountant (I won it in a kid’s school fundraiser) didn’t make me confident re the British taxes so ignored her advice (and paid England more than she said). Did my US taxes three times one of those years with 3 different results and picked the middle one. Maybe it baffled IRS enough that year they had no objection.
Turbo tax has often disappointed me so I hadn’t used it for decades until saw it on sale for 2022 tax year. That saved me $60 (so $10 net over buying it). But will probably do my own next year again.
Now I want to hear how you lived in the UK.
In 2021 I forgot to take a required minimum distribution from an inherited IRA (it would have been for less than a hundred bucks, because there wasn’t much left in the account). I took the advice of the internet and wrote a letter to the IRS apologizing for the oversight, and included proof that I had taken my 2022 distribution and had set up an automatic yearly withdrawal so it wouldn’t happen again. The IRS’ response was basically “okey doke”. I think they have bigger and more interesting fish to fry.
Here’s an article I wrote then (2002-2006!) https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1821407/
I’ll see if I still have notes from a talk I gave at work about my time there.
That article is actually for a British audience- only the last 2 paragraphs are (possibly) news to Americans.
That was very interesting, thank you for that. I have family (in-laws) in Switzerland and find their health care/health insurance system interesting: similar to US in that everyone has private insurance, different in that there are strict limits to how much drug companies, insurance companies, etc can charge.
I think taxes are a lot like investing in that by the time you know enough to know whether you’re getting good advice from a professional, you likely know enough to do them yourself. My family has W2, s-corp, and rental property income. I find that by them time I have quickbooks in order I am about 90% of the way there to doing my taxes, including the s-corp return. I somewhat enjoy doing them and like you Margaret, find I gain valuable insights into our overall financial health. I also use TurboTax. I’ve tried hiring a tax planner a couple of times and have been overall underwhelmed. Perhaps it’s because I like personal finance enough to already be implementing their suggestions before they even suggest them. In the future the only reason I could see off-loading my tax work is because I want the time back. Thank you for encouraging others to tackle this part of their annual personal financial obligations.
Very well said. There is a bit of a learning curve but once you’ve got it, you’ve got it. And I’m very impressed that you do your own S-corp taxes! Wooo-hooo! Do you mind if I ask what your S corp is?
The s-corp is for my clinical work. My husband has a W2 job. I probably wouldn’t attempt the s-corp return if I had a more complex business but I’m an anesthesiologist who works 1099 so I’m the only employee. My deductions are simple. It’s really straightforward. I followed along with Jim’s excellent blog post on how to do the s-corp return. That was invaluable. I was using a CPA for my quarterly filings until recently because of the hassle factor but I just switched to surepayroll. I started using that for our nanny a couple of months back and it is way easier than the system I had in place the last time I had a nanny when I was filling out and filing 941s, etc by hand. I do often waiver on the subject of getting help for these tasks because I recognize how valuable my time is. Every time I do get help though, I find it’s not worth, to me, the price I’m paying.
That is very cool.
Year after year I blindly trusted my CPA to do my taxes until they made mistakes, that I overlooked, on two separate years and caused a correspondence audit by the IRS. I promptly paid the difference and the issue was resolved. Additionally, I usually turned in my tax documents to my CPA by March 1st and they took their sweet time to complete my taxes the first week April. I finally decided to do my own taxes and now wonder why I waited so long. Because I have an LLC, multiple investments and rental properties I thought a CPA would do a great job and protect me from an audit. I now realize that because they have so many accounts to deal with, they only have time to recheck my taxes twice, if I’m lucky. I now use TurboTax (with Audit Defense) and can’t believe how easy it is to do my own data inputs. The first time you use it, your personal information inputs take time, but subsequent years you only have to update new data. I recheck my documents at least three to five times. My numbers are more accurate as I know I will have to defend my data inputs if I’m audited. I am no longer fearful of an audit as I resolved an IRS correspondence audit on my own, without the help of a CPA.
Thank you for reading. I’m glad to hear that you find your taxes manageable even with rental properties and an LLC. I’ll check in with you this time next year if I’m in the same boat. Or maybe you can write a column about it, for the rest of us to learn from!
I started doing my taxes 3 years ago after my accountant “fired” me. She said once-a-year clients during the tax season rush wasn’t worth the stress. Very few establish and experienced accountants around here want this work and I don’t trust the newbies at firms who advertise via spinning sidewalk signs. Doing my own taxes this year took me around 6 hours (triple checking stuff). Established accountants want to charge me around $1200 to do my taxes (they claim the compliance/security overhead makes it so expensive) so I’ll do the work to “earn” $200/hr plus get an education on my taxes.
I must have checked my first DIY return ten times. I couldn’t believe I wasn’t missing something, like: a professional has been doing this for years so it can’t actually be this easy. In fact, it was that (relatively) easy.
I have always done my own taxes except one year when I moved states. I hired a CPA, paid $400, and he did a fine job. But I found I really didn’t like not knowing where all the money was coming and going. Went back to DIY and have been much happier. I use FreeTaxUSA. Less expensive than the bigger guys and, arguably, contribute less to politicians who intentionally make the tax code complex to prop up the tax preparer industry.
I look forward to the day when I can do my own again! That probably would require both selling WCI and changing my portfolio significantly though. It’s pretty amazing how much work I still have to put in even with a pro in my corner.
I’m going to have to check out FreeTaxUSA!
I’m going to have to check out FreeTaxUSA! thank you
Love it! Shout out to freetaxusa. Filed for $30 with two states, including multiple rentals and 1099 income.
Woohoo!
Margaret great article! question- do you take the QBI deduction on your 1099 income side gig? one of the main reasons I don’t do my own taxes if for dedutions like these, which seems incredibly complex and my CPA says I don’t qualify for the surveys and talks that I do.
Hi Rikki – thanks for reading. I don’t take the QBI because we are over the income limit. And actually, once of my two side gigs (summer camp physician) is paid as a W2, so I am covered under the camp’s liability insurance. My only self-employed job is this one.
I am W2 physician with rental income, LLC income, and Self Employment Income. I have been doing my taxes for about 12 years on Taxslayer and I just want to note that it has alot of great features and has never let me down.
I used CPAs prior, and got audited for three separate years all at once, and never went back. I won the audits, but the CPA did a poor job documenting.
I agree with everything above, and I think the most important thing about doing your taxes (expecially prior to newest standard deduction), is that it made me more conscious of my decisions and possible deduction all year, which adjust my behaviors and which receipts I held onto.
Good article.
Thank you for reading. The educational and behavioral benefits of doing your own taxes are, to my mind, greater than just what you save on CPA fees. And if I got audited while using a CPA, even once, I would have gone DIY too.