When I was sixteen, I got a part-time job as a cashier at Target to pay for my car insurance and gas. I was lucky enough to have been given an old 1987 Plymouth Horizon by my parents, but if I wanted to drive it, I had to cover the costs. That year, I earned $2,364 and had to file my taxes for the first time.
How I Used to Do My Taxes
That year, 2001, was my first interaction with the IRS. I was sixteen and didn’t know anything about my taxes. My parents had used the same accountant for years for their small business and personal taxes, so they sent my information over as well.
All through high school, my accountant did my taxes for free. Since I didn’t have to pay, it seemed like a great deal. In college, he charged $50 per year, a total bargain for a professional tax preparer, so I stuck with him.
In 2007, I graduated from college and got my first “grown-up job” as a banker. I had never done my taxes on my own, so I stuck with what I knew. As my income grew and I started working on my first side income projects, my taxes became more complicated and I felt attached to the accountant.
One year, I did my taxes on my own and compared them to the accountant, and found that he saved me about as much as I paid him, so it all came out in the wash. But then some things changed.
Accountants are Not Perfect
Here’s something important to understand about your personal finances. No one knows what’s going on with your money better than you, and no one cares about it as much as you.
A few years ago, I was reviewing my taxes before my accountant submitted them to the IRS. I noticed that my accountant had listed some mutual fund sales from my IRA as taxable. That was an error that would have cost me $600, and one I am very happy I caught before submitting it to the IRS. I figured it was a one-time mistake, so I let it slide.
All the while, my tax preparation bill kept going up each year. My taxes become more and more complicated, so I stayed with the accountant. I watched each year as my bill increased from $400 to $500 to $600+. Seeing as I cared about my money and wanted to keep as much as possible, I started seriously considering doing my own taxes for the first time.
When I got my bill and found several mistakes for my 2013 taxes, I decided that next year, I would give it a go on my own.
Online Tax Preparation
At the end of 2014, I was ready to do my own taxes. I patiently waited for my W-2, 1099s, and other tax forms to arrive. I already used Quickbooks for my business accounting and generated the reports I needed for tax time.
It definitely takes more time and work to do your taxes than paying someone else to do it, but I was thrilled with the overall experience. I followed the intuitive, easy-to-follow directions to input everything from all of my tax forms. Even my multiple small businesses were easy to enter.
Whether you have complicated investments, business earnings, student loan interest, mortgage interest, or donations, online tax preparation software can handle it. Oh yeah, and it saved me over $500 compared to my old accountant, and my taxes were error-free!
I’ve done my own taxes myself for the last two years, and don’t plan to go back to an accountant anytime soon. I have to file business earnings across multiple states for the four businesses we own and operate. I have to file W-2 earnings and a big stack of 1099s. I have investment gains and losses from stocks, mutual funds, and peer-to-peer lending. I moved to a new state and am about to do it again. Even with all of those complications, online tax software handles it with ease.
Do It Yourself Taxes is the Way to Go
If you have a good head on your shoulders and know how to use a computer, there is no reason you can’t do your own taxes. And, with the deadline to file coming up fast, you have no time to waste!
An excellent, well-priced tax prep option is Tax Slayer. If your taxes are simple, you may even qualify for their FREE tax filing option! You can prepare and e-file your taxes using their simple, easy-to-follow software at your favorite coffee shop or at home in your underwear. There is no need to pay some “expert” hundreds of dollars. You can save a bundle using convenient, at-home tax preparation.
Are your taxes done yet? If not, get started today!
This post was originally published on April 7, 2016, and updated on January 25, 2022.
4 thoughts on “Why I Started Doing My Own Taxes”
There are a lot of similarities in your tax story as mine. When I moved to Portland in 2014, my wife and I worked there, but there was also work in CA and our rental was in CA. I decided to use a professional, cost $500.
This year I changed jobs and due to that overpaid SS Tax, still have the rental, other investments and I just figured I would use him again as I definitely needed to be sure I recouped the overpaid SS Tax, but CA also withholds tax on my real estate profits to the sum of $2,500 so I need to make sure I get that back.
However, I also did my own taxes using Turbo Tax (the free online version–pay when you file) this year and so I generally knew my numbers going in. He charged $550 this year, so I decided I am going it alone next year.
Have you used Turbo Tax? Why do you prefer Tax Act? It is a bit of an intimidating process. I found what helped me was to enter the tax information as you get it. W2s, 1099s, rental stuff all kind of trickle in at different times after Jan so as soon as I got a tax document, I entered, saved and them came back later when something else came in.
That saved me the hassle of sitting down for hours at a time on a weekend and making myself crazy.
I am happy to endorse TaxACT as it is the least expensive of the big three online tax prep services. I used H&R Block the last two years and was not thrilled with the experience. I’m still up in the air for next April on which I will use.
Now that I have an S-Corp, an LLC partnership, another LLC, and personal income taxes to file, things have become increasingly complex!
I think I am going to do our taxes in 2017. I found several errors in ours as well, and it really does not seem all that difficult if you have all of your background info handy. I seem to have spent more time explaining things that if I just would have gone ahead and used TurboTax or something!
Totally relatable! You know more about your finances than anyone else and care more about them than anyone else. I bet you can handle it no problem!
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