Ouch. Find a new accountant.
Accountants/Tax-Preparers are dumb unless your returns are very complex.
The most time consuming part of tax prep is making sure you have all the right documents. After that itās just data entry. You have to get all the documents yourself no matter who is doing your taxes, so in the vast majority of cases, all youāre paying the accountant for is data entry into some Turbo Tax like software.
Just cut out the middleman and get Turbo Tax, imo. Itās cheaper and I think that by doing it you can actually see what things affect your taxes the most and it will make you better at tax planning for yourself in the future.
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Iāve missed stuff before like stonk income that I didnāt realize I needed to pay. I stupidly thought you only had to pay if you cashed out of the account. Maybe Iām dumb but I just let it slide.
Iām sure thereās been a few others like that. And I also didnāt file taxes from like 1985 to 1997 and the IRS didnāt care. They only got me for a 1099 in 1995 when I finally got a real job and filed taxes in 1998. And then it turned out I got $600 more back for 1995 lol.
I think the key is just be completely honest if they do audit you. That seems to be the only way you get in real trouble. Otherwise you just have to pay what you owed.
We are a pass thru business. Our accountant is worth every penny. No way I want to deal with the hassles. They helped me through the EIDL process, run the occasional payroll through for us, if we get any IRS or state letters they handle it.
Takes me less than a day of consulting pay to cover it for the year.
If your are a W2 worker, turbo tax all the way.
Iām a W2 worker and I still pay a guy $385 every year to do it for me. Iām lazy.
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Heās saving you 1hr at most. Probably closer to half an hour.
Also when I had a guy, he charged 3 times that, so it made the decision even easier for me.
To each their own. Gotta know what you hate doing and pay someone else to do it for you (if you can).
Love how simple Czech taxes are compared to the US.
Thatās pretty much everywhere. As usual the US has adopted the nut low, most corrupt, version of filing income taxes.
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Yup. I still have to file.
I donāt owe anything but I still have to basically tell the IRS, āHi. Hereās the money that I make. No you donāt get any.ā
I pay my guy $450 to do mine, and itās not a simple W2. Iāve used him for 10+ years and heās usually very good, but had this one screw up that has now become very annoying because the IRS is laughably bad/slow at working through these things.
Are you sure?
What happens if you donāt.
Only consequence I can think of is that you could get audited. At that point you show no tax was owed and that would be the end of it. So, if youāre filing to reduce the risk of an audit, thatās not a bad idea, but I wouldnāt say you have to do it.
Is there some other reason why you have to? Whatās the penalty for not doing it?
For years, I didnāt file for the exact reason you gave.
But now, I have investments in Vanguard index funds. My fear is that if I donāt file and then decades later, decide to withdraw my investments that itāll ring some bells and I might not get that money at all.
I think it can be more than just W2 and be simple. I have more than just W2 income and I donāt think my taxes are tough at all.
Also, I have had a similar experience with accountants making errors. For example, I have had a couple of accountants make mistakes on the proper filling out of form 8606 for a backdoor roth conversion. Itās not that easy on Turbo Tax, but once you figure out how to do it, it takes almost no time in subsequent years (and Turbo Tax makes it easy to check).
I think that still kind of falls under the reason I gave. Youāre filing to reduce the chance of a future problem.
There is not any reason the government could take that money from you once you proved the source of it. That would be more difficult to do in the future, itās still possible.
The main reason I donāt do my own is dealing with asset depreciation, bonus depreciation, different depreciation schedules, etc. I donāt know/understand all the possibilities, and even if I research it a little bit, Iām afraid Iāll miss something that could cost me.
That seems reasonably complex. Your accountant could easily miss something too (this absolutely happens). You wouldnāt know unless you check. And if you know enough to check well, you could do it yourself. But aināt no one got time for that, so trusting an accountant is a reasonable way to deal with that problem.
Most people donāt have any of the things you listed, so having an accountant adds so little value.
Computers though. Nobodyās out there hand-computing depreciation schedules. You either have the computer program/Excel model to do it for you, or you donāt.
Yeah, like I said, I think his situation is more complicated than most.
I donāt use it because I donāt need it, but I think the fancier versions of Turbo Tax have the ability to calculate depreciation for certain scenarios.
Backdoor roth stuff in Turbo Tax got me confused, Iāve had an accountant do it in the past. I tried to follow a guide on the intuit forums but Iām not sure if I did it right. Iād rather just pay someone to do tax stuff but I was lazy this year and didnāt get my documents together in time.