Ask HN: Do you prepare your own taxes?
2 comments
I did my own taxes from when I started earning enough money to report it (age 19) to when I moved out of my parents house (age 27), because my dad was always distrustful of tax programs or advisors. I switched to TurboTax for the past 2 years.
I've found that TurboTax cut down on the time required to do my taxes from "a weekend" to "about 3 hours", and saves me roughly $300/year in deductions that I didn't know I could take. It's been well worth the $50 or so I pay for it.
I've found that TurboTax cut down on the time required to do my taxes from "a weekend" to "about 3 hours", and saves me roughly $300/year in deductions that I didn't know I could take. It's been well worth the $50 or so I pay for it.
What kinds of deductions did TurboTax reveal?
Things like:
Certain moving expenses are tax deductible if you're moving for work, from a location that is more than 50 miles away from your new job to a location that is less than 50 miles away.
Money received from paid family leave is tax-deductible on state taxes in California, but not on federal taxes. This can be a big chunk, since PFL is basically a replacement of income for the duration, and having your income be non-taxed is a pretty big refund.
Charitable contributions are tax-deductible. I think everyone knows this, but the wording on form 1040 can be somewhat confusing as to when you can take itemized charitable deductions and when you should take the standard deduction.
Certain moving expenses are tax deductible if you're moving for work, from a location that is more than 50 miles away from your new job to a location that is less than 50 miles away.
Money received from paid family leave is tax-deductible on state taxes in California, but not on federal taxes. This can be a big chunk, since PFL is basically a replacement of income for the duration, and having your income be non-taxed is a pretty big refund.
Charitable contributions are tax-deductible. I think everyone knows this, but the wording on form 1040 can be somewhat confusing as to when you can take itemized charitable deductions and when you should take the standard deduction.
Your question phrasing is a little odd; I would consider using software (rather than paid help) as "preparing my own taxes".
TurboTax and similar are barely $30, for federal + state. Plus they're tax-deductible!
What's the value of your time? They don't need to save that much time to pay for themselves, much less if they catch an error or opportunity that you would miss (unless devoting a lot more reading and care to the paper forms/instructions).
Sure, if you've only got one W-2, no or very simple retirement accounts, no or very simple deductions, you can probably do without any software. But even then, I think there are then free online forms to help avoid simple mistakes or tallying errors.
(In my platonic-ideal digital republic, the tax code and the tax preparation software would be one and the same, and subject to a capped complexity budget in kB.)
TurboTax and similar are barely $30, for federal + state. Plus they're tax-deductible!
What's the value of your time? They don't need to save that much time to pay for themselves, much less if they catch an error or opportunity that you would miss (unless devoting a lot more reading and care to the paper forms/instructions).
Sure, if you've only got one W-2, no or very simple retirement accounts, no or very simple deductions, you can probably do without any software. But even then, I think there are then free online forms to help avoid simple mistakes or tallying errors.
(In my platonic-ideal digital republic, the tax code and the tax preparation software would be one and the same, and subject to a capped complexity budget in kB.)
"TurboTax and similar are barely $30, for federal + state. Plus they're tax-deductible!"
I think they're only tax-deductible up to certain income limits or something. I remember seeing that section, saying "Sweet, I can deduct the cost of TurboTax on my taxes!", then having it come back with "Sorry, your income is too high to take the deduction for tax preparation services". Bummer. Why'd it even ask, since it knew my income before the deduction section?
"(In my platonic-ideal digital republic, the tax code and the tax preparation software would be one and the same, and subject to a capped complexity budget in kB.)"
The way we handle taxes is kinda absurd anyway. Almost all the input data we feed into TurboTax is information that's reported to the government anyway, and they crunch the numbers too to figure out if you should be audited (ever noticed that if you make an arithmetic mistake on your taxes, they'll just fix it for you and deduct the appropriate amount from your refund?) Since the government is doing the numbers anyway, why can't they just do our taxes for us, and either send us a bill for the difference or cut us a check for the refund.
I think they're only tax-deductible up to certain income limits or something. I remember seeing that section, saying "Sweet, I can deduct the cost of TurboTax on my taxes!", then having it come back with "Sorry, your income is too high to take the deduction for tax preparation services". Bummer. Why'd it even ask, since it knew my income before the deduction section?
"(In my platonic-ideal digital republic, the tax code and the tax preparation software would be one and the same, and subject to a capped complexity budget in kB.)"
The way we handle taxes is kinda absurd anyway. Almost all the input data we feed into TurboTax is information that's reported to the government anyway, and they crunch the numbers too to figure out if you should be audited (ever noticed that if you make an arithmetic mistake on your taxes, they'll just fix it for you and deduct the appropriate amount from your refund?) Since the government is doing the numbers anyway, why can't they just do our taxes for us, and either send us a bill for the difference or cut us a check for the refund.
I could definitely see the advantage of using a program or going to a professional for a small business, but for one person it just doesn't seem that hard.
Am I just being naive?