Tax Tips: Can I do my taxes myself?
Filed under: Tax
Whether someone can do their own taxes is an interesting question. The U.S. tax code gets more and more complicated with each passing year. Another year, another set of rules added to the previous set of rules.
If you have a very simple and straightforward tax situation, with a job, a house, and a family, it might be fairly easy for you to fill out your forms online with the help of TurboTax or one of the free filing programs offered by various companies. But once you add things like self-employment income, distributions from retirement funds, capital gains taxes, and any of a zillion of other items that must go on your tax returns, it's probably too complicated for the average person.
When in doubt, get some help. If you can't afford to hire a tax preparer, many cities have volunteer tax assistance programs offered through local colleges or non-profit organizations. See if there is one available near you.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
If you have a very simple and straightforward tax situation, with a job, a house, and a family, it might be fairly easy for you to fill out your forms online with the help of TurboTax or one of the free filing programs offered by various companies. But once you add things like self-employment income, distributions from retirement funds, capital gains taxes, and any of a zillion of other items that must go on your tax returns, it's probably too complicated for the average person.
When in doubt, get some help. If you can't afford to hire a tax preparer, many cities have volunteer tax assistance programs offered through local colleges or non-profit organizations. See if there is one available near you.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
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Reader Comments (Page 1 of 1)
2-11-2008 @ 5:31PM
DanDMan said...
Come on Ms Coenen...TurboTax handles self-employment income (Schedule C), capital gains and even retirement distribution masterfully.
Being a CPA, and probably invested in people seeking the help of a professional at tax time, I don't think your opinion is objective. Sort of like the Jiffy Lube guy telling me I shouldn't change my own oil...
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2-11-2008 @ 5:37PM
Tracy Coenen said...
No, Dan, I have no interest in doing anyone's taxes. Have you ever done taxes professionally? Have you ever seen how badly many people screw up their taxes? They simply don't know enough about the tax code to get the correct deductions. The software is good at handling data entry, but it is no substitute for knowledge of the tax code and the rules.
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2-16-2008 @ 9:30AM
Kelly Stroud said...
The reality is that online tax programs are only as good as the people inputting the numbers. A good accountant, while not always cheap, has always more than paid for himself/herself in my experience. I recall the first time I used a tax software program to file my taxes. Although it may have been user error on my part, it said I would need to pay the IRS. I went to an accountant, and they were able to ask questions about things that I had no idea could be deducted, which resulted in a refund I never would have received from the computerized system. If you don't itemize.... use the tax software programs. If you are have things that you could itemize for.... be smart and use an accountant who knows the 18,000+ page tax code.
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2-27-2008 @ 8:10AM
Rena said...
Yea, if you have a straight forward tax return it may be easy enough to do yourself. But, dont even try to itemize. This still doesnt give these jerks like Jackson-hewitt, and H&R Block to charge an arm and a leg to prepare them. Their computer does all the work for them. I had to pay $300+ to prepare a simple 1040A. It took the guy about 30 minutes to do it and it wouldnt have taken that long had I not talked to him and distracted him. Then, in the end, had I not ask questions I would have lost out on over $200 on my state refund. So, you tell me why is it legal for them to charge so much? Back in Texas a lady did our taxes, and even had to do it several times one year, only charged us $50.oo. $50.00 compared to $300+. Now you tell me, they deserve this amount. I DONT THINK SO. But, what choice do we have when "an average" person cant do it?
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3-11-2008 @ 12:35AM
Bubbles said...
i don't find taxes all that hard to do so never understand why people need to pay big bucks to have someone else do them. is it just really laziness, or what? or, is everyone saying that they're really dumber than a rock, or what? the forms are easy to read and understand and if you're too dumb to do the math in your head, or on paper, use a darn calculator. i worked in banking and suggest that you go over your math at least 4 times to make sure it's right, however. believe it or not, number's can play tricks on your eyes and your brain. you see a 7 and your brain sees a 4. uncanny but true but don't be afraid, just have another person do the math twice and you do it twice and when both are sure your tally's are correct, put them all down on the irs forms. i think tax companies just like people to think they can't do their own taxes, afterall, this is how they make big bucks off of you.
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3-11-2008 @ 4:15PM
Danabzz said...
I agree Turbo Tax is a good program for a straight forward tax return. But as life situations change you can also outgrow the program. My husband started his own business a couple of years ago and as a result, we now rely on an experienced accountant to file our returns.
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