Istartedusing TurboTax in the year 2000 and I’ve used it every year since then. Going to a tax preparer didn’t make sense – it was expensive and TurboTax made it easy enough to do my tax returns myself. All the TurboTax alternatives (H&R Block,TaxAct, TaxCut, etc.) are all similar in that can guide you through doing your taxes tomake life smoother when doing your returns.
Sure, sometimes I would stare at the screen for hours and try to figure out what the %^& they were asking me. And sometimes it seemed easy enough that I would go through everythingand submit my return pretty quickly because I was excited about my big juicy refund… only to receivea 1099-MISC about a day or two after I submitted the return.
But it just makes sense to do your own taxes to save a few bucks when possible, right?
Well, maybe it did when I first started and was a young kid living in an apartment with nothing complicated to do on my taxes. However, over the years, life’s started to get a little more complex with family and other “stuff” that grows over time. Now that I’m older, the simplicity has started to diminish. Some of the growthin my life now includes…
- A wife
- A house to live in
- A rental house
- A daughter
- A duplex
Every year, I noticed that my returns were becoming slightly more difficult and time-consuming to do. I’ve managed to muddle my way through them though every time, but I never finish them thinking “well, that was a slam dunk!” – it’s more of a “yeah… that shouldhopefully be good.” Because the complexity just increasedsubtly over the years,I really didn’t notice just each time I did my return. I’ve been like the boiling frog anecdotethat says if you put a frog in cold water and slowly turn up the heat, it doesn’t notice and will be cooked to death.
My game plan is to possibly buy another two duplexes before I quit my job so my tax returns are only going to get more complicated over time.
Well, I’ve had it and decided to jump out before being cooked to death!! I stopped about ¾ of the way through my current TurboTax return and finally decided I’m calling it. Istarted doing some digging and talked to one of my financial mentors to see who he uses. His accountant is actually pretty pricey, but I want to work with someone who knows things inside and out to get a good baseline going.
Here are my goals:
- Check my work – I’ve done what I know and answer the questions TurboTax asks, but I’m no accountant and I’m sure I’ve missed some things that could have saved me more money if I knew where to look.
- Get advice for how to structure everything– I’m looking for someone to say, “Jim,if you change the way you do this, you could save a lot more on your taxes every year.” There are probably a number of things I should change and I need someone to give me someguidance on what to do differently.
- Future strategy help – This is a pretty big bullet point for me. Similar to the previous oneexcept I need to look to the future so I know whatdirection I should be going. For example, I’ve haven’t dug into this yet, butwhat should I be thinking about now to help onmy daughter’sfinancial aid for college? We’ve got a number of years left until then and I should be done with my full-time job at that time. Will eliminating my W2 income help her out tremendously orwill rental income come into play? And ifthe rental income does play a part, what are some ways of fixing that? Maybe changing the structure and handling of myLLC makes a difference or maybe it doesn’t. This type of planning is critical for me.
In a nutshell,although TurboTax is a great product and has served me well, I’ve grown beyond it… and this is a good thing! It means that I now have enough assetsto warrant bringing someone in to help. And with that should come the guidance I need.
Depending on how this first time around goes with the accountant, I may or may not stick with him. If it becomes worthwhile because I end up coming up with thousands of dollars I wouldn’t have had otherwise or the advice is just outstanding, then it’s probablyworth the cost. However, if it’snot reallythat mind-blowing or cost-saving, then I will likely look at going to someone else for next year’s return. Regardless, I’m done trying to do this myself.
I’ll let you know how my first professional accountant visit goes as soon as my return is done.
So goodbye TurboTax – our time together hasbeen great… Ok, maybe just good. But I’m moving on to bigger and better!!
Do you do your own taxesevery year or do you use an accountant and why?
Thanks for reading!!
— Jim
