Over the last few weeks, I did the one thing I was sure I’d never do after leaving the Post: prepare my own taxes instead of paying a tax professional to do the work.
I’d outsourced my tax prep over the last three years with generally satisfactory results. But this time around my tax guy had raised his rates while my own financial situation had not gotten more complex; I felt like I had finally disciplined my once moronic, then merely slovenly accounting; it seemed wrong to go four years without even looking at a category of software millions of Americans do battle with every spring.
And so I renewed my acquaintance with Intuit’s TurboTax for the first time since 2011–not as a reviewer, but as a paying customer. It went better than I’d feared.
The biggest upgrade from my earlier agonies was effective record-keeping: I’d entered every cash expense last year into a Google spreadsheet on my phone within hours or, at worst, days, then imported business credit-card transactions into the same sheet every quarter. Between that and being able to consult last year’s return for guidance on what should go where, I had the outlines of my Schedule C knocked out in shockingly little time.
That’s a great reason to go to a tax pro in the first place: If you don’t know to do this stuff, you need somebody who can coach you. The results don’t just help at tax time, but throughout the year.
TurboTax’s ability to import tax forms for all of our mutual funds–something I’ve complimented in earlier reviews–was a great time-saver. And seeing each investment firm’s numbers flow into our return meant I got a direct look at the tax hit inflicted by some actively-traded mutual funds versus index funds. Ouch.
I was relieved to see that the stupid date-validation bugs I’d complained about in 2011 were gone–well, in most of the app.
Did I play this unnecessary game of tax-code-optimization as well as I could? I believe I did, but I won’t know for sure until after we actually file. Yes, although the 1040 and our assorted alphabetical schedules are done, I opted to file an extension. I will be dropping a sizable chunk of money into my SEP IRA to chisel down our tax bill, and I’d rather not completely clean out my account in the process.
I also did our Virginia taxes in TurboTax. Then I deleted that return after writing down the total it had calculated and the two numbers I’d need to put down on my state return. Intuit may have convinced a gullible General Assembly to scrap the state’s free iFile site in 2010, but that doesn’t mean I need to reward its successful regulatory capture with my own business when state taxes aren’t that hard and I can always file on paper.
did you make too much to use the Free e-file forms? I used for both Fed &VA state tax at no additional cost. Yes, I did use paper to compute, but I have yet to have to pay to file in my lifetime.
Virginia’s free fillable-form e-filing doesn’t have an income restriction, but it does limit you to three deductions.
Your digital notations of Schedule C expenses alone are not enough to support an audit. You will need some paper back up or a digital printout from the source. So much for going paperless.
Wrong. Here’s what IRS publication 463 says about record-keeping methods:
And about keeping receipts:
I think the law is different in California, but if I file my federal return electronically, then I have to file state electronically as well. Otherwise I’d probably do that hard copy as well…
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