I don’t think it makes sense to count home equity. Very few people expect to move to a less desirable dwelling (including me).
Lots of people downsize after they have kids.
Nevertheless, I agree for the most part and I don’t count it either.
So for taxes this year, I’m starting to actually have some slightly complicated taxes this year. I got income for paternity leave from california. I got income from a w-2. I got some interest. I got typical retirement savings stuff. I got new baby this year, new house this year with a new mortgage.
Should I TurboTax this or pay a real cpa?
I think next year I’ll do a real cpa as I won’t be a w2 anymore and I’ll have some extra income from some deferred sign on bonus money. Seems reasonable?
I would still Turbo Tax it all. What you have described is not that complicated. There are a couple of reasons.
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If you get it an accountant, most of the work is still gathering all of the documents. Once you do that, pretty much all they do is enter it into their version of Turbo Tax.
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Because all they do is above, accountants make some pretty basic mistakes. When I had a CPA, 50% of the time I found an error in what they prepared. Once they did not do form 8606 correctly for backdoor roth. Other time they completely messed up a Roth conversion.
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The main benefit of doing it yourself is future tax planning. Putting all that stuff into TT yourself gives you an idea of why your taxes are what they are and then you can attempt to implement strategies throughout the year to minimize your tax burden. You will have a better idea of the kinds of things you should be doing (and what isn’t worth the effort) if you do the taxes yourself.
I give this advice a a lot, and most of the time, I get a “That’s great and all, but doing taxes is very unpleasant and I’d rather just pay someone to do it.” That’s fine too.
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Thanks I don’t mind doing it. Tax planning for next year is a real concern for me. I’m comfortable plugging in w2s and whatnot, but I switch to k2 and partnership stuff it makes me nervous enough paying might be worth it to not worry about it.
The training wheels approach is to hire the CPA and do it yourself via Turbo Tax (it can handle that stuff easily). Compare results. After a couple of years, you’re probably going to say, “WTF am I paying this guy for?”
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That’s a really good simple idea that I somehow never thought of. Thanks a ton!
Does anyone do turbo tax with K-1s? I’m nervous about it but would prefer to do it myself.
Yeah, I’ve done it in the past. Haven’t had K-1 income for 5+ yrs though.
There still may be a thing or two to look up. For example, every year I have to look up how to do a backdoor Roth on TT. It’s not at all obvious. But it takes about 5 min to find step-by-step instructions and figure it out.
I throw my stuff into 2 or 3 different turbotax-likes and pick the one with the best $ for me and nothing has ever happened.
They give you different results with the same inputs?
Yep no idea why. Last year few hundred bucks.
If you don’t make a lot and contribute to a retirement plan I’d wager the discrepancy is from the Saver’s Credit.
That would drive me nuts. I’d spend hours trying to get to the bottom of that.
you should be able to download the forms from each site and compare them
Yeah I’ll do that this time in a couple weeks.
We have a home, max retirement accounts, (used to) buy some mutual funds, and probably most importantly is sell my restricted stock units every year so IDK we’ll see.
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It’s January 1 in the US and I just remembered to make my annual backdoor ROTH IRA transfer for 2022.
The deadline was Dec 31.
FML.
I’m pretty sure you can still contribute for 2022 now. And doing the conversion in 2023 is fine, but just makes the tax paperwork messier. I’ve always been carefully to do everything in one calendar year to avoid that messiness, but I think you can still do it. It will just be more annoying.
I guess if you wanted to convert specifically in 2022 because it was a lower income year or something like that, then I think you did miss the boat for that.
The quick Google search I did showed the deadline to be Dec 31 and didn’t indicate any kind of extensions, so I hope you’re right. Emailed my tax guy, so I’ll wait to see what he has to say.