<p>I’ve always done my own taxes without any problem, have had my refunds direct deposited by Valentine’s Day. Of course this year especially (applying for financial aid), I want to make sure they’re done exactly right. The only change this year is that I’ve earned interest on a normal high interest savings account. I assume I will receive a 1099 for this? </p>
<p>I called a couple of tax preparers and am getting an estimate of $250-$450 and a turnaround time of as much as a week to prepare and file my taxes. I’m not sure that its worth the longer time and cost for something that takes me an hour or two to complete, but like I said, I don’t want any mistakes. </p>
<p>It depends on the complexity of your taxes. If you’ve been doing your own with no problem, and there is only one change (and yes you’ll receive a year end statement for that) I’d keep doing them. If you want, you can hire a preparer on the lower end just to see if they catch something you would otherwise miss, but, my guess is you’re doing it right and there are no errors.</p>
<p>Obviously, you want to carefully read everything that may be new for this year, but you’ve probably been doing that all along anyway.</p>
<p>If you have a pretty straightforward situation then continue on. If you own a business or have multiple income sources with expenses it usually makes sense to work with a professional.</p>
<p>The first time I used an accountant back in the mid-80s, he saved me $5000 by refiling five years of back taxes to claim deductions I’d missed. A few years later I moved (from MA to WA) and the accountant saved me $17000 over the forms I’d done myself. After that I stopped doing them myself and just take my stuff to the accountant. A few deductions you may miss if you do them yourself: $250 for classroom supplies if you’re a teacher, the choice of sales tax vs. state taxes (which won’t be in the forms), back phone taxes…</p>
<p>Every single year I’ve made the effort to check my own tax forms against the accountant’s forms, I have found the accountant saved me a bucket of money. And that’s without the cost of my time and sanity factored in. Since the average person spends more than ten hours preparing their own taxes, don’t forget to factor in that cost, too.</p>
<p>Nah…If you have fairly simple taxes, and you use the computer programs, such as Turbotax, etc, the program will ask you for all the info, then figure it in the most beneficial way. You don’t need to figure out if the “hope” credit is better foryou to use than the “Lifetime learning” credit. You don’t have to modify the paper tax forms; the computer programs will be updated to reflect the $250 teacher supplies, back phone tax credit, choice of sales tax versus sales tax, etc. In your case, it doesn’t sound like you need a paid accountant - and sometimes those guys make MISTAKES. The computer program only makes a mistake if you incorrectly input the data.</p>
<p>Many people don’t know that the AARP trains volunteers who do free tax preparation for lower and middle income taxpayers, regardless of age or AARP membership status. The preparers are often retired accountants who really enjoy doing taxes, if you can believe it. Training is updated each year to reflect changes in the tax code.</p>
<p>Have you ever tried a tax program? If you have, then take your raw data to the preparer and see if they come up with the same numbers as your program does. The preparer may ask you questions that the program may not ask. </p>
<p>If you have not used a tax program, take the raw data that your preparer puts on the forms, follow the instructions of the program and discover if the final answer matches. The program may ask questions that the preparer does not ask. </p>
<p>I find that a tax program is good enough even with a business. Especially when the basic program is less than $25 and a deluxe just a bit more, and a professional a couple of hundred. I use the $25 model, I also get the program in Nov and start doing tax planning rather than wait till end of Dec when its too late to make any adjustments. Its good enough because I can come up with better questions than the preparer can. _What If Scenarios. </p>
<p>My kid is in a Canadian school this year and with income. I am fairly irritated to pay the accountant $500 bucks to tell me that he should file estimated tax for 2006 and expect another $500 to figure the Canadian ramification for 2006. I’ve already done 90% of the calculations but have not plugged in the final Canadian numbers yet. I have a very close handle on the filing numbers and will compare my results to the accountant’s numbers. His situation makes him a good candidate for an audit. Previous years the data was easily substantiated and not a good audit candidate.</p>
<p>I take my fairly uncomplicated stuff to a pro and have him do it because it gives me an extra level of comfort, but I swear he is just typing the numbers into a program that looks very similar to what I use at home. (Taxact online)</p>
<p>I don’t even think he’s even typing in the numbers. The large CPA firm ( accountant is friend of ours and the data input works out to $12.50/lb cherries) sends the info to India for data input. I already had the 2005 returns filed, and I just gave her the return for 2006 tax year planning. </p>
<p>I feel that its blackmail to have an CPA to keep the IRS off of my son. The tax code has gotten more complicated and thus more expensive under this administration.</p>
<p>We have also always had ours done professionally…never been audited…and we’ve gotten a fair amount of good tips from our accountants over the years, especially regarding college planning.</p>
<p>Unfortunately, we’re on our third accountant now since the first two have died prematurely (both in their 50s).</p>
Bingo … for example, I did not know I could deduct the mileage from and to volunteer coaching of youth sports. This is not a question TurboTax asks.</p>
<p>We’re the typical professional married couple … house, some basic equity transactions, IRAs, kid college planning, etc … on my own I would use an accountant at least every few years to make sure I’m not missing anything.</p>
<p>One way to find out if your taxes could have been done better is to take a few years of returns to an accountant (and I’d vote for an independent accountant who lives and works in your neighborhood) during the non-tax season. Have her (or him, I guess) review them; it should be cheaper than actually preparing them. You can refile your taxes and get a delayed refund if there was an error or if you missed deductions. </p>
<p>When my husband and I bought into a business a few years back, we had our accountant review three years of returns; unfortunately she discovered that the business hadn’t paid certain local (city) taxes and we had to pay those taxes (and some interest and penalties). The previous accountant who made the error (who was with a big firm in another state) charged 3x ($3K) what our local accountant charged ($1K) to correct the big company’s error.</p>
<p>We always use an accountant, but our taxes are complicated. He finds things that Turbotax doesn’t.</p>
<p>Now, hubby does spend as long “preparing” the tax information as the accountant probably spends doing the returns, but we still think it is worth it.</p>
<p>Any recommendations for college students filing taxes? I’m pretty sure my parents can help me with federal taxes, but I’m not quite sure what to do with state and city taxes (Pittsburgh, PA).</p>
<p>Learn to prepare your own taxes. Your tax preparation is probably very straight forward. Spend the 25 bucks for a program. If you are really cheap, do it thru the IRS website and then copy down the resulting numbers onto the 1040.</p>
<p>Once you learn how to do your taxes, you will understand how money is collected how it is spent, and how to avoid paying more than your fair share. A student from your type of school, without stock sells, with only wage and interest saving, should take about one hour or less on a tax program. The state tax process is even easier-the programs take your federal information, plugs it into the state form and asks you a few questions that the federal does not concern itself with and what may be unique to your state. </p>
<p>The tax form and questions yield an algorithmic answer, just like FAFSA and your final financial aid award.</p>
Of course this year especially (applying for financial aid), I want to make sure they’re done exactly right. The only change this year is that I’ve earned interest on a normal high interest savings account. I assume I will receive a 1099 for this? </p>