My husband is a dedicated DIYer. He loves the challenge of learning a new skill. He appreciates the joy in saying “And I did it myself!” He and I both love the feeling of frugal independence wrought by doing something for ourselves.
He also has a higher tolerance for extended home chaos than I do, which is the main reason I’ve convinced him to put down the sledgehammer and drywall bucket and walk away slowly.
However, we found the limits of my husband’s DIY attitude during the 2010 tax season.
Neither of us were wet-behind-the-ears tax-filing innocents. By that year, I was 31 and he was 33. We had each been doing our own taxes for quite some time.
(Fun fact: we are both old enough to remember getting our 1040 EZ forms at the local library and filling them in with a Bic ballpoint pen before putting them in an envelope with a stamp on it—and then receiving a paper check in the mail as a refund. Further fun fact: none of the words in the previous sentence will mean anything to either of our children.)
We had, of course, adopted the “fun” and “simplicity” of tax filing software by 2010. And as dedicated DIYers, you’d think we’d continue along that self-starting go-getter path.
But 2010 was a bit of momentous year for us. Just a few of major events that occurred that year:
1. We moved from Ohio to Indiana in June.
2. We put our Ohio house on the market, just weeks after the First Time Homebuyer Tax credit expired, because the husband and I have impeccable timing. It took us 11 months to sell the Ohio house.
3. We bought a new house in Lafayette. (And yes, that does mean we were carrying two mortgages at the same time. Impeccable timing, as I said.)
4. I left my teaching job.
5. My husband left his job in Ohio and started a new one in Indiana.
6. The new job paid for our move, which was considered part of my husband’s 2010 income.
7. I started freelancing in November of 2010.
8. We both put our student loans on deferment.
9. Oh yeah…and we had a baby. Said baby was born at the beginning of the academic year, which meant I was not going to be teaching for the 2010-2011 school year. (Have I mentioned our impeccable sense of timing?)
We looked at TurboTax.
We looked at the fact that we needed to file income tax in two different states, handle mortgage interest deductions in two states, properly claim the paid-for moving expenses, start paying quarterly estimated taxes on my freelancing income, and figure out how the heck having a dependent affected our taxes (or if the IRS would at least send anyone to help with diapers or sleep training).
So, despite the fact that we had gone from two full-time incomes to one, two members of the Guy Birken clan to three, and one mortgage to two, we asked ourselves, “Can we hire someone to do this for us?!!?”
And we did.
This had the added bonus of us feeling more confident that our CPA would make sure we got all the deductions we were entitled to and would reduce the likelihood of the IRS enforcement squad (which is entirely made up of agents called Spike) forcibly auditing our return, using Form X-TRCTR and Schedule R4CK.
We’ve been using a CPA ever since. Best money we ever spent.
I was reminded of this experience during my recent Tax Preparation Q-and-A Webinar. One attendee asked me “Do you need an accountant if you have TurboTax?”
While I'm not an accountant, I was able to provide her an easy way to help her determine if tax preparation software will suffice or if she’ll be better served by a tax professional. I also answered other questions about
The Child Tax Credit
Whether couples should file their taxes jointly or separately
How long you have to contribute to an IRA or 401(k) to have it count for 2022
Whether a solopreneur has to file taxes as a separate business entity
Do you have questions about taxes? Did you miss the webinar? Not to worry!
You can still access the video replay and the free PDF transcript. They're available to paid subscribers of my email reminder service (only $12 per month)!
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How do you handle your taxes every year? What have you found to make the process easier?