The Tax Man Cometh....
And I am afraid that he is going to be beating our family into submission this year. When you are self-employed, there is no employer to take the taxes from you, thus we end up getting physically beaten at the end of the year. We do save for tax time throughout the year, but somehow handing the money over in one lump sum hurts so much more than the nickle and diming they do throughout the year on other people's checks.
TaxAct.com is a great place to do your taxes for free or for really cheap, depending upon the plan you opt for. You can download their program or do the whole process over the web. Considering the most expensive plan on TaxAct is a mere $19.95, this is definitely one of the cheapest options out there.
When we were first married, we used H&R Block for our taxes. My parents had always used H&R Block, so naturally that was where we went to when it was time to do our own taxes. We were newly married, had nothing to claim on our taxes and were bringing in the big bucks. I about fell out of my chair when the agent told me how much we owed. Then he told us how much we owed him and a repeat performance of me falling out of my chair ensued. What a rip off! We vowed never to return there again, as it was almost like getting robbed from twice in one night. Say what you will about me, but I find H&R Block to be extremely expensive, especially with all of the wonderful programs they offer today.
I do want to direct your attention to
this link where they are offering an exclusive offer to American Express Card Members. You can save 25% on TurboTax Online federal products which includes free e-filing. They also offer a complimentary TurboTax Tax Estimator. If you have an American Express Card, you should definitely take advantage of this offer.
TurboTax also offers a great tool for those of us who are guessing how much our donations are worth. It is a software program called,
"It's Deductible!" and the cost on it is $19.95. You can access thousands of values for the items you donate, track your donations throughout the entire year, auto-fills tax donation forms, and it all comes out in a printable report. We are going to purchase this program as we make many donations throughout the year. A quick picture with your digital camera and you will have all the paperwork you need to make the tax deductions.
I am wondering how you do your taxes? Do you hire a private accountant? Do you do them yourself? What programs do you use?
Labels: Budget, Taxes
10Comments:
kelly jeanie
"My husband works for a big corporation, but I'm technically self-employed. We have an accountant who takes care of things. She makes sure we get as many deductions as possible and it's just so much easier to hand over all of the paperwork. Before I was self-employed we just used Turbo Tax, which worked great for a couple with no kids, just plug in the information and wait for your refund!
I know what you mean about a big bill, but I look at it the other way...whatever is left over in the account after we've paid the tax man is like a refund!"
"Last year we splurged and had someone do our taxes, this year we're doing the same. I say "splurge", but it really isn't if you sit down and figure out a) how much time my husband was putting into doing the taxes, double checking his work, triple checking his work, etc., b) the cost of the software every year, and c) the family togetherness time we were losing while my husband was holed up in his office performing step a.
We were very lucky to find someone who charges based on how much actual time she has to spend on your return. In our case, her fee is nominal. We keep everything very organized and only bother her with the questions. Every year there are questions, though, and having her answer them is worth the small amount we pay.
I think it's also worth mentioning that last few years have been a time of major transition for us we sold a house and moved from PA to CT, husband took work as a contractor at a major pharmaceutical company requiring him to do all his own withholding and taxes and keep track of all our health benefits and payouts himself, sold a rental property, maintained and rented out another rental property we still own, paid to COBRA health insurance for four months, bought a house, and finally, in 2006, had a baby.
In our case, I think paying to have our taxes done is money well spent."
Amy
"Kelly Jeanie- You have a very positive way of looking at it. I would not have thought of the money lying in the account as our refund money, but that is a lovely (and more positive way) of looking at it.
JB- I would have hired someone too, given the financial situations you are in. We had a hard time one year filing because we had to split between two states and a lot of our time was spent on the taxes that year. That time might have been better spent with each other rather than saving the money we did.
This a wonderful discussion!!"
"First of all, the exact same thing happened to my husband and me when we went to H&R block. We didn’t owe money, but I was astounded at how much these trained monkeys were charging me when I had to explain to them how my relocation expenses worked. Never again.
Years after that we used Turbo Tax, but I was very angry one year to find out my severance pay was tax free in my state (NC) and Turbo Tax never caught that. I found out through and old coworker that the Microsoft Tax Software found it. I did an amendment and printed the Tax code for the state IRS office. You thought I would have learned.
When we moved to Texas, we lived in NC for only three months. Turbo tax literally through its hand up in the air and gave me the electronic version of the form so I could fill it out. It had no idea how to handle living in the state for only a few months! So I pro rated our income for the year. Wrong! We got an $80 bill from the NC IRS. That was when I learned.
My husband and I sold some stocks his Grandmother purchased for him in the 80’s for a down payment on our house? Tax Basis – yea right. We printed as much information as we could; detailing all of the splits the stock did over the years and complied it in a notebook. I researched how to find the right CPA, and meet with two with their free initial consultations. I love my CPA - he doesn’t charge for quick phone calls and has tons of knowledge in small business. The money we gave him to figure the cost basis and to do our tax return was well worth it. When I handed over the check, I was smiling. He said we saved a bundle because we had everything organized.
The tax code is too complicated, working with a professional ensures you are doing everything legally and getting the most money back. I bet if you researched, you could find someone in your price range. Perhaps you could barter for their services. Also, try local colleges, some have their students provide tax return services. I know in NC, a local community center had a CPA that volunteered their time to do tax returns. All walks of life used that free service."
snarflemarfle
"My mother-in-law happens to do taxes. She does our each year. We usually "pay" her with a gift certificate for dinners or a few manicures! And the 2006 taxes are going to be interesting with a baby and my contract work since I quit my full-time job."
The Thrifty Blogger
"If you have an income below 52k a year, you just link through to the IRS website for free file and you can go there and do it for free. At least check it out, it doesn't hurt to find out.
If you click on my profile and then on my blog, you will see the link for the IRS free file. I've done it the last couple years and it's not too hard. There are different companies who let you do it for free depending on where you live, your income, and your deductions and filing status.
Also be sure to check the state you live in, as if you can match up the same company for free filing in your state and federal, you get it all for free, along with electronic filing and direct deposit. Great deal, especially for easy returns. Just DON'T go do those RAL's, (refund anticipation loans) they are a big waste of money. Yikes! :)"
Vicki
"We used HR Block for years and got smart this year after last year paying 238.00 I used taxact.com and did just fine even with my disability pay, and transfering 401k to ira and etc.
Wheezymom"
Christina
"We use the same man at H&R Block every year. I just don't trust us to do them right ourselves LOL The one year we tried, our numbers and H&R Block's numbers were WAY different. We got hundreds more back using H&R Block."
"Amy- My husband is a pastor so there are special "rules" for our taxes. We go to an accountant who specializes in pastors and missionaries. It's well worth the price ($100) to have her do our taxes for us. She gets us every single deduction possible and she's available to us anytime we need her throughout the year for free. Honestly we call her about 4 or 5 times a year with tax questions and she gives the best answers! I'm more than willing to pay for her wisdom! Also, she's great with ethical questions since her husband is a pastor, too!"
Angie
"Hi Amy,
My husband and I are both self employed. We do estimated payments throughout the year and file our returns by Jan. 31. At least we get to get it over with early!
I use HRBlock.com and like it well enough. Here's a website I recently discovered that seems to have some creative tax ideas for us "indies."
http://junewalkeronline.blogspot.com/index.html"
I know what you mean about a big bill, but I look at it the other way...whatever is left over in the account after we've paid the tax man is like a refund!"