We feel at this stage of retirement we would like to tackle our own taxes and quarterlies next year instead of using an accountant. We do not have a business. Income is annuities, SS, capital gains and K1 and stocks, etc. Our accountant seems excessive and this year they went to all digital. I am requesting paper to keep. I think it is time for us to do them again. We used to do them when life was simple…BC.
Thinking Turbo Tax, or? Any thoughts on this?
If everything is established, you usually can just follow what you did last year. TurboTax is easy (as are any of the rest of them).
You can do it. If it looks way off, call in the experts.
We’ve used Turbo Tax for decades. You can use Interview method (especially good first time through) and/or Forms method. One habit we like is to put a pencil checkmark on each W2, 1099 etc as we enter into Turbo Tax.
This year we did have our Financial Advisor’s assistant take a peek, and he did find an error on the way we entered HSA info (inadvertently double dipped). He also alerted us to some Capitol Loss carryover which for some reason Turbo Tax automation did not handle as expected. Interestingly they 2 issues almost cancelled each other out, but obviously we are happier to have the correct entries.
I’ve been doing our own taxes for years using the same software company. Originally it was called TaxCut then it became H&R Block. When husband had an S Corporation, he had an accountant do those forms but I incorporated his income into our personal taxes. We consulted an accountant when we moved to California because it involved two partial year state returns and I wasn’t sure how complicated the CA return was. But he took a look at my preliminary work, made one small suggestion, and said we were fine on our own.
Full disclosure- I spent 15 years working for Social Security and a few years later took a certificate course in accounting, which included taxes. So I am comfortable with government forms and senseless rules and regs.
I will say that if you have a unique tax credit it helps to know how to apply it or what to expect. Sometimes Turbotax or the others are behind in that update.
When I adopted, I got a credit. I couldn’t use it all in one year and it was to carry over, and Turbo tax didn’t do it. This was a while ago so I just did it on a paper form. It was chatter on many of the adoption boards on the internet so I knew about it. I think there was an issue of Turbotax also taking the credits in the wrong order and it did matter.
I’ve done our taxes using TurboTax for many years. The only time I’ve run into problems was using the online version (as opposed to the desktop version) which appears to not support overrides for certain situations that aren’t handled by the software (in that case they hadn’t implemented the non-conforming 529 treatment of withdrawals for K-12 education in CA after the 2017 tax changes). So I went back to the desktop version which allows you to input overrides like that and have been fine ever since.
We do our own, but they really aren’t complicated.
No, there is no way.
H does ours and has for decades. Since online help became available he chose TaxAct telling me he liked it better than TurboTax. He probably told me reasons eons ago, but I’ve long since forgotten them. He buys the business version since he’s self-employed and it comes with options for doing more than just one, so he does/did our adult kids’ taxes too until they got married. He did my mom’s both before and after she passed away.
He tells me as long as he keeps all the tax stuff in one pile (and one folder online) it’s super easy. I smile and nod, then sign where he tells me (though electronically he has my signature so I can even skip that now).
With Turbo tax can you start and stop along the way, when you get more info available?
I also noticed online that Fidelity has turbo tax, H&R Block, tax chat, and tax act listed at a discount. I wonder if it will self populate our info?
Never thought about online help. That would be great.
We do our own, using TurboTax. I did them for years (and did the bills too). Then we purchased a new house and moved, and husband decided he was going to handle all that. Works great for me. I did tell him I want to follow along occasionally.
Our situation is very easy.
I did my own (and later our) taxes from 1970 to 2019. Fifty years give or take. Then I retired. Time for an accountant to share in the fun.
We can’t since we have an incorporated business. It’s too complicated. Maybe when DH retires in the next few years.
I did ours with paper/pencil/excel until older S went to college. Then I didn’t like what I was reading, so gave it to an $$$ accountant. After that year, I started using TurboTax. Mine/H’s are super easy. W2s and a couple of 1099s, standard deductions. The kids’ are harder because of their investments and self employment and the scholarships and the kiddie tax stuff. I was very happy to have older S be an independent for 2020 and now he does his own!!!
I have been using TurboTax for at least 15 years. It gets easier as time goes by, more employers and brokerage companies can be imported directly by the program which saves some tedious typing. I also buy the $40 or so Audit Defense. I only needed it once, ironically due to a bug in Turbotax.
edit: Two tips. First, I pay and then review the return before I file. They don’t let you see the entire return before paying (or else people could just copy it onto the paper form). I check to make sure I didn’t forget anything (what, no itemized deductions?) and that numbers are roughly what I expect. Second, they give you the option to save a copy of your return or your return with all worksheets. Always choose the latter, so if need be you can see what your inputs were to the program.
Interestingly, turbo tax has a way now to hand over the taxes to an accountant there. It looks like the best bet for us for the 2021 is to do our own with Live Premier and if needed go to full service.
@rockymtnhigh2 , yes you can. My first year in retirement, I even set up a dummy file to track how my tax liability would change given the changes in my sources of income. Allowed me to make estimated payments throughout the year so as to avoid a penalty for owing them too much. Has also helped me adjust how much of my pension is withheld for federal taxes.
“With Turbo tax (TT) can you start and stop along the way, when you get more info available?” - Yes. We tend to wait til we have received all (or almost all) tax forms in the mail.
In TT, the Interview method is especially helpful if you don’t know where to start. You will have to answer a lot of “No”/“Not Applicable”, but still helpful to cover all the bases. For Interview method, it is better to wait until you have all (or almost all) tax forms.
We continue to use TT for continuity. However if we were starting from scratch there are more choice now, possibly cheaper alternatives. We definitely like the online approach, which enables better husband/wife collaboration of the tax chore process.
This year we were pleasantly surprised that Surplus money that did not come by check last summer appeared as credit on the tax forms. (I think this had to do with higher income and taxable inheritance in pre-retirement years)
Yes. I actually do this even when I have all the info. I work until my eyes glaze over, then stop and resume the next night. Breaking the return into a few nights reduces the stress significantly!
I do the opposite, enter the big simple things first (income and major deductions) to get an idea of what we’ll owe or receive back and then finish off the smaller and more complex things (eg 529s) later on. That way my incentive to finish it quickly is determined by the expected size of the refund!