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Your Take: How Do You Prepare Your Taxes?

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Busboys & PoetsLast night I had to pleasure to finally meet some of the DC personal finance bloggers and some PR folks at a happy hour (or three) hosted by TurboTax at Busboys and Poets at 5th and K Street. It was a fun event that was really casual and it was nice to meet people I’d only been emailing, instant messaging, or twittering with these last few months and years. Many thanks to the most awesome Chelsea (@TTaxChels) for inviting me!

In talking with both Scott Gulbransen (@prgully) and Dave Donohue (@davedonohue), I was surprised to learn that most people prepare their taxes the same way their parents did. If your parents did their taxes online with a service like TurboTax, you were more likely to use TurboTax. If they always went to a tax prep place like H&R Block, then you would be more likely to go to H&R Block over trying to do them yourself.

At first I was a little surprised to learn our tax preferences are influenced by our parents, but then I realized I was influenced by my parents. When I first decided to use TurboTax, I didn’t compare it to TaxCut or TaxAct or going to a tax preparer. I chose it because that’s how my dad did our taxes when I was younger. So I shouldn’t have been that surprised because I did the same thing!

So the Your Take for today is a two parter – How do you prepare your taxes and how much do you think your choice is influenced by your parents?

(Photo: daquellamanera)

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60 Responses to “Your Take: How Do You Prepare Your Taxes?”

  1. Before I got married, I filled out the forms by hand. Now, we use Turbotax.

    Amount of parental influence? None. My parents always had their taxes professionally done.

  2. Steven says:

    My dad made me do his taxes starting in middle school, and before that he had an CPA do it.

    Now, I use the IRS free file, and get a nice selection of different programs to use.

    http://www.irs.gov/efile/article/0,,id=118986,00.html if you make $57k or less

  3. CK says:

    Turbotax, I used to use a pro but only because it was free.

  4. Jessica says:

    Every year I have done my own taxes online using taxact (free!) and I’m a 1040EZ all the way (no kids, house, deductions of any kind).

    Well… I got married this past year and my husband’s tax situation is MUCM more complicated than mine so… My husband uses a person we like to call “The Tax Fairy”. She’s knows all of the little deductions you can take that you’d never think of on your own in a million years, all legal deductions. We put all of our forms and receipts into one big envelope and then like magic 2 weeks later we get our return in the mail, read, sign and submit! The Tax Fairy isn’t cheap but she defintely earns her money and then some.

    TO answer the second part, both of our parents do their returns by hand to this day. Neither of us have ever done our taxes that way.

  5. tbork84 says:

    TurboTax for me. That’s how my dad used to do his taxes, and he still does taxes for the other kids in my family (I am the youngest at 25 by the way).

  6. Martha says:

    I used the online-free version of TaxCut for the Federal filing. For the state filing it costs $29.99(!) when using TaxCut, since I didn’t want to pay for it, I would do the taxes manually and check my answers against what TaxCut got. If they were the same, I would “submit” my Federal and “cancel” the state so that it was still free. If my answer and TaxCut’s answer were different then I would use TaxCut to go line by line to check my answer. It took some work but it was well worth the $30.00! :)

  7. Martha says:

    Oh, and my parents use an accountant… I wasn’t going to pay for that! :)

  8. savvy says:

    I did my taxes by hand until around 2000, just like my parents did. In fact, my dad is the one who taught me to do my taxes. They used an accountant a few times when they had things that were out of the norm (buying/selling houses, moving states, etc.).

    We made the move to TurboTax together and now I actually do my dad’s taxes in addition to mine (using pro software though).

  9. stuarsj says:

    My parents use an accountant. I use the free edition of Turbo Tax online because my tax situation is pretty simple right now.

  10. NateUVM says:

    I do my own taxes. Then I submit via eFile.

    This is probably influenced by my parents to some extent. But I actually LIKE doing my taxes, and because it’s also free, this approach has an appeal to me that is probably separate from any direct influence my parents had.

    Then again, maybe it’s just a case of the apple not falling far from the tree re: “liking” to do my taxes.

  11. cubiclegeoff says:

    I used to do my taxes by hand but now I use taxact. My wife’s parents used an accountant, but I don’t see the point. My dad still does his taxes by hand.

  12. Hannah says:

    Even though their situations are not complicated, my parents never do their taxes themselves. They always leave it until last minute, and they pay the fees to get the amount of their tax returns in cash ahead of time (sort of like a payday loan, though less outrageous).

    I do my own taxes, as well as my younger sister’s, with TaxAct. I am influenced my parents, but by negative example in this case.

  13. Peter says:

    I believe my parents had their taxes done by a family friend who was an accountant. I never did, though. I always have done my own taxes – however – I think that will be changing this year because of self employment income, and my changing tax situation.

  14. Jack says:

    When my dad had his own business he had an accountant prepare all of our taxes. After he closed it down I think he started preparing on his own and he was an early user of efile when it was first introduced, but we never really talked about it so I can’t say for sure.

    The first year I had to file taxes we went to my mother-in-law’s house and we sat at the kitchen table and worked it out together by hand. I think I filed by hand once more since then, and then I used TurboTax a few years and now TaxAct.

    The first year I used TurboTax I did also try H&R Block’s software to make sure everything matched up, and H&R Block showed we owed taxes while TurboTax showed a refund. I figured out where the differences were (education costs as a tax credit vs a deduction), read up on those provisions to be sure TurboTax was right, and triple checked the calculations by hand before filing. When I found TaxAct I also used both TurboTax and TaxAct to make sure they were treating my situation the same and to my best advantage, and when I saw they were equivalent I decided to stick with what was free.

    For state taxes, our state has a free online system, so I never even bother putting in any information to the tax software.

    • cubiclegeoff says:

      While getting a jump on my taxes this year, I noticed when I put in tuition for grad school TaxACT automatically placed it as a deduction rather than a lifetime credit (which I assumed would be better). They never did this before. But they give the option also to change it if you want, and when I did that, the deduction was more beneficial than the lifetime credit by about $100. It was nice to see that they are trying to find what is best for your situation.

  15. JNichols84 says:

    My parents did their taxes by hand when I started filing my own taxes. I learned from my uncle about TurboTax, and have used it ever since. Last year, my parents started using TurboTax as well.

  16. zapeta says:

    My parents have their taxes professionally done, but I’ve always used either TaxAct or TurboTax. Its much easier for me, a lot cheaper, and my tax situation is far less complex than theirs.

  17. Brad Murray says:

    Turbotax. We have predictable income and expenses. I developed an Excel model that looks out several years. I’ve tweak it when I get the real rates, etc. and I’m usually able to estimate our taxes within $100 on over $200K of income! The filing is essentially a non-event.

  18. ziglet19 says:

    My mom prepares taxes for a living, so she has done mine in the past, but in recent years, her health has declined. Now we prepare our own using TurboTax.

  19. freeby50 says:

    Until last year I used to do my taxes myself by hand. Now we use a CPA. My parents always used an accountant.

  20. Shock says:

    I use TurboTax to file my taxes. I have no idea how my parents get their taxes done. Growing up it was not discussed and we don’t discuss it as adults either. I’m not saying that’s good or bad, taxes are just not a topic of conversation in the family.

  21. T says:

    My parents use H&R Block (or something like that) – have for a long time.

    I volunteered helping international students fill out their tax forms in college, and I’ve been doing my own by hand ever since. I’d e-file if it were free to me, but it’s not, so paper 1040s it is.

  22. mcnally411 says:

    As an accountant, I find it easy to do my own taxes. I did this manually at first, but have been using TaxAct since 2004. My parents as well as my wife’s parents both use a CPA firm to file their taxes. Both of them have fairly complex situations, so it makes since for them to go that route. Even with my background, I could see myself switching to a CPA firm if my situation becomes more complex.

  23. lostAnnfound says:

    We use an accountant. My husband & I used to them ourselves until I became self-employed 13+ years ago. Our accountant is a friend of my family, so it is someone we know & trust and he gives us a fair price.

    My parents (as long I can remember) have them done professionally.

  24. I used to use TurboTax etc, but now my situation is too complicated – need to file taxes in 4 states etc, that I have been using an accountant for the past few years.

    My folks use a tax advisor, their situation is also too complicated.

  25. Staci says:

    My parents are divorced. My mom still uses paper forms to do her taxes. I did too at one point in time, but threw that out the window once I got a job paying enough to force me beyond the 1040-EZ form. My Dad and step mom have someone who does their taxes for them, I think. I never really asked. I used to have someone prepare my taxes for me, until I had one tax preparer make a mistake on my taxes that cost me about $1200 in owed taxes and another preparer who completed my digital forms, attached them to an e-mail without password protecting to send back to me to be signed, and sent them to the wrong e-mail address (not mine). Luckily, where he did send it was not a valid address and it just bounced back. The past two tax filing seasons I’ve done my own taxes using TurboTax, because I feel more confident that I can do them right on my own. Long story short, that is what influenced me more than how my parents prepare their taxes.


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