More Tax Questions...

abrewer5 · January 2015

'Tis the season...taxes

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I'm completely ignorant when it comes to anything tax related, other than I hate paying them, so I apologize in advance if my questions are really stupid. H and I typically take our taxes to a CPA and together we pay roughly $360 to have them done, which is a lot of money, but seems like the going rate from what I've heard from others and it gives us peace of mind. I'm thinking about possibly doing Turbo Tax or one of the other online programs to save money, so I'm wondering how easy is it for someone who barely knows anything about taxes? What type of program should we get?

We both work 1 full time job and will receive W-2s and we got married this year. Our current deductions are mortgage interest and student loan interest, possibly property taxes if those can be deducted as well. We do not have kids and did not have substantial charitable donations this year. We both have standard retirement accounts thru work that are not roth accounts (if that makes a difference). I'm not sure how much you have to claim in interest received from savings/retirement accounts... Will the program walk us thru this? We will be filing married/joint. Do the online programs do state taxes as well, or is that separate? We live in MD if that makes a difference.

WWMMD? Would you continue to go to a CPA just for the peace of mind or would you try our turbo tax to see if I can figure it out? My main concern is missing something whether it be a deduction we qualify for or missing something that we might owe and getting trouble with the IRS. I've never done my taxes myself, so I'm just a little leery on how the process works.

Any help/advice would be greatly appreciated!

ETA: I'm not sure where that link is coming from? Perhaps because I wrote it in another program before copying it into the discussion. I can't figure out how to remove it... Sorry!

Xstatic3333 · January 2015

I did Turbo Tax from college on, and it makes everything SO EASY. It walks you through things like you're 5. From what you wrote you don't sound that complicated and I think you'd be fine.

We are currently using a CPA for H's piece of mind. We're sort of complicated; we file in two states that are supposed to offset each other somehow, and I have a very questionable 1099 (think I probably should be counted as an employee at my diving job) that makes me scared of audits. Even with all that, though, though, we'd probably be ok with TurboTax also. Last year the CPA quoted us $300 but only charged $200. This year, we'll see!

simplyelise · January 2015

I've used TurboTax every year since I was 18 and it's always been really easy. We're going to do HR block online this time because DH likes it better and I don't care.

If you have all of the forms in front of you from all your accounts, it's pretty simple. Just follow every step and you'll be good.

formerlyGDaisy09 · January 2015

It sounds like you could do turbo tax pretty easily.

We pay someone to do ours but only because I have a job that pays with a 1099, and I get paid by an organization that is in a different state than where I live, and I have a direct sales business, and H works 2 jobs, and I've been in school and had my tuition paid for through my main employer. any one of those things we could figure out on our own, but with all those things together we choose to pay someone.

If it were just our 2 main jobs, mortgage interest, SL interest, and town taxes we would do them ourselves. When I used to file on my own I used Turbo Tax and it was really easy.

hoffse · January 2015

Yeah your situation is about as easy as it gets. TurboTax or HR Block will be fine for you. Just make sure you get the version with Schedule A included. Check the various versions of both programs on Amazon.com - there is a chart that tells you which one you need to buy to get Schedule A. Frankly, I would buy whichever program you can get cheaper because they are virtually identical. Shop around a little bit because lots of places offer sales on that software this time of year.

The program will walk you through the taxes with a Q&A format, and then the program fills out the return for you. There are a LOT of questions you will answer "no" to - sometimes the program even says, "Do you qualify for X? (This is not common)" So that you don't get confused. Super easy, and I can almost guarantee you that you will not use a CPA again unless your tax situation gets complicated in the future.

Set aside an hour or two to do it since it's your first time. It shouldn't take that long. Then next year the program will download a lot of the info you entered this year, and it will be even faster.

One other thing - if you actually bought a house in 2014, make sure to have your HUD-1 in the stack of documents for your taxes. You can deduct prepaid interest, points, sales taxes you reimbursed the seller for, etc. Your lender may or may not report all of it. Our lender did not have the prepaid interest or sales taxes reported on the docs they sent us because our mortgage was sold to them a week after closing.

vlagrl29 · January 2015

since you don't have crazy deductions like we do I think turbotax would be just fine.

I pay my CPA $150 to do my taxes - I get all the numbers ready for him and he files it for me. DH pays more because our CPA is also his book keeper. We file joint as well.

MissChanandlerBong · January 2015

Xstatic3333 said:

I did Turbo Tax from college on, and it makes everything SO EASY. It walks you through things like you're 5. From what you wrote you don't sound that complicated and I think you'd be fine. We are currently using a CPA for H's piece of mind. We're sort of complicated; we file in two states that are supposed to offset each other somehow, and I have a very questionable 1099 (think I probably should be counted as an employee at my diving job) that makes me scared of audits. Even with all that, though, though, we'd probably be ok with TurboTax also. Last year the CPA quoted us $300 but only charged $200. This year, we'll see!

I would think that as long as you're remitting your taxes quarterly, the risk of classifying you as an independent contractor vs. employee is borne by the employer. I have never heard of an individual getting audited for this, only the business.

Erikan73 · January 2015

I agree with others, your taxes aren't that complicated and the programs anymore make it so easy to make sure you get everything you should on credits with all the questions they ask you. Just take your time, make sure to read everything & not just fly through it & you'll be done in no time. Now before doing your state return, which is even easier then a federal, check your state tax site for doing your tax return. The reason I bring this up is that in Ohio, you just have to enter in your info for federal adjusted income, your w-2, answer a few questions & it figures it out for you (and it'a accurate, I've compared to the figures provided on H&R Block site which is what I use) and you can e-file for free. Not sure if all states offer this, but worth the quick look to see if they do.

kasi55 · January 2015

I second checking your state site. In the past in our state, you went to the state website and used a program they had created. Last year, the state contracted with select providers to prepare your state taxes for free. I just had to select a provider from that list.

Xstatic3333 · January 2015

MissChanandlerBong said:

Xstatic3333 said:

I did Turbo Tax from college on, and it makes everything SO EASY. It walks you through things like you're 5. From what you wrote you don't sound that complicated and I think you'd be fine.

We are currently using a CPA for H's piece of mind. We're sort of complicated; we file in two states that are supposed to offset each other somehow, and I have a very questionable 1099 (think I probably should be counted as an employee at my diving job) that makes me scared of audits. Even with all that, though, though, we'd probably be ok with TurboTax also. Last year the CPA quoted us $300 but only charged $200. This year, we'll see!

I would think that as long as you're remitting your taxes quarterly, the risk of classifying you as an independent contractor vs. employee is borne by the employer. I have never heard of an individual getting audited for this, only the business.

That's good to hear!

hoffse · January 2015

Erikan73 said:

I agree with others, your taxes aren't that complicated and the programs anymore make it so easy to make sure you get everything you should on credits with all the questions they ask you. Just take your time, make sure to read everything & not just fly through it & you'll be done in no time. Now before doing your state return, which is even easier then a federal, check your state tax site for doing your tax return. The reason I bring this up is that in Ohio, you just have to enter in your info for federal adjusted income, your w-2, answer a few questions & it figures it out for you (and it'a accurate, I've compared to the figures provided on H&R Block site which is what I use) and you can e-file for free. Not sure if all states offer this, but worth the quick look to see if they do.

Do check this but also be careful.... Alabama has a similar thing where you enter it online to "e-file" for free, and that's what I had done the first year. But when I reviewed my return, I discovered that we are eligible to deduct our federal taxes from our state taxes. Well Alabama's state website automatically enters $0 for that deduction, and there is no way to change it. That can cost the taxpayer a TON of money in lost deductions. It's a glitch, and I don't know whether it's intentional or not, but I will file by mail from now on so that we get that deduction. I check it every year, and it hasn't been fixed since I moved here. The "auto-fill" forms online also automatically enter $0 for that deduction, so you can't even use their own forms and have it be done properly.

I ultimately had to file an amended return because of that error. They owed me $450 from that mistake.

So do check it, but make sure that everything you are eligible for is being taken into account. State revenue websites are pretty low-budget, and many of them are very glitchy.

abrewer5 · January 2015

Thanks everyone for your advice! I think we're going to try it in an attempt to save some money.

So far H is on board with this idea. Now I just need to decide if we should use Turbo Tax or H&R block.

ab6704a · January 2015

I recommend Turbo Tax personally because I've used it for years. My situation is a little more complicated this year than in past years for me but nothing overwhelming - we own a home and sold a second home this year, got married, and I changed jobs from a state that had an income tax to one that didn't. So far I've been able to adequately address all the deductions and situations that have come up, in Turbo Tax. I think for the version I'm using that I'm going to end up paying around $70 or so.

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