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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. Yana says:

    For years, I did our taxes myself with pen and forms. It got a little more complicated a couple of years ago, and I used H&R Block for our last two returns. However, I don’t like paying $200 to get them done, and I’m going to shop for another preparer this year. I tried to do the taxes online, but found it too difficult – I’d rather use pen and forms than do that.

  2. qixx says:

    My parents used do their taxes by hand. My dad is a financial analyst by trade. They moved to using TurboTax software once my mom opened her own business. I used to use TurboTax, TaxAct, or H&R Block online (go through all three and pay for the one showing the largest return) since i ran a IT Consulting business. Now married with a child i go through those same 3 for the IRS Free-File editions. They are all rather simple. Take half-hour or so each. One or another usually shows an additional few hundred i’m getting back. $200-$500 is not bad for an extra hour doing taxes.

    • mikestreb says:

      Does that bother you that one is normally higher? If all of the info is entered correctly, they should all show the same end result.

  3. Chris says:

    When I was younger I did it by hand. Now we have a tax pro in the family that does it.

    • Isn’t that super awkward?

      We have an investment advisor in the family who keeps asking for our business, but I would feel supremely uncomfortable sharing my financial info with someone in the family. My only exception would be my parents, but sharing that info with anyone else in the family would make my hair stand on end.

      • Matt says:

        I can’t speak for how they feel about it, but my father is a CPA and does taxes for many people in our family and extended family. I imagine it can be awkward, but I guess they’re all trusting. I’m sure it helps that he charges low rates for family.

        I’m a lucky bugger, as he does mine for free. I really could do them on my own since they’re extremely simple (standard deduction, just add student loan interest deduction on top of that). Unfortunately I’m sure mine will get more complicated as years go on and he’s less able to do the work. Oh well, I love numbers and finance!

  4. Money and taxes were never discussed in our house growing up. I have no idea who did my parents taxes, though I do recall a few very loud arguments about money and reciepts.

    What ever happened to those days when there were still a bunch of deductions?

    For years I did taxes by hand. In the early 90′s I started using TurboTax but still did them by hand as well because I didn’t trust the software. After 7 or 8 years of validating TurboTax I have finally learned to rely on it.

  5. jsbrendog says:

    i waste my money with h&r block..but hopefully that changes this yr with a fam friend beocming a cpa…i was offered to ahve them done for me last yr but i didnt want to bother them by the time i got al my info together in mid march. so this yr im a hopin

  6. pmulroy says:

    Turbotax online. For my situation, the ease of filling out the forms and efiling alone is worth the cost. When the software finds deductions or credits that I am eligible for but would not have found on my own, it pretty much pays for itself.

  7. cpwilson5 says:

    I’m a good example of parental influence. Dad did his taxes with TurboTax as I have started doing mine with TurboTax (this will be my second year). Friends do theirs by hand and didn’t know about TurboTax and thus the kids have done theirs by hand. Weird but happened with us. I’m a big tech lover so I probably would have done TurboTax later regardless but I started instantly since I knew my parents had done it.

  8. billsnider says:

    Interesting cross section of answers.

    I went with Tax Cut (now called H & R Block At Home). I did this because year after year it was cheaper than TurboTax.

    I always compared my answer with guys at work. They used turboTax. And yes, we always got the same answer (Thank god).

    My dad had an accountant do it since he was illiterate in English. Later years I did it for him manually.

    Bill

  9. My dad spent an agonizing weekend every year with papers spread out all over a card table, cigarettes and coffee to hand, ever ready to holler at whichever kid happened to wander through and speak at an inopportune moment. I pack all my stuff up and send it to an accountant. So, if my dad influenced me, it was to make me realize I didn’t want to go through what he went through!

  10. govenar says:

    My mom does my parents’ taxes by hand. I use TurboTax.

  11. Aaron N. says:

    My parents used to do theirs by hand, now I do their taxes and my own with TaxCut.

  12. Donald says:

    Back in the day, just like my parents, I used to fill out my taxes by hand, but that was back when I could use a 1040EZ. Now that I am in regular 1040 land, I have always used H&R Block because just the thought of doing taxes brings on anxiety. Last year things changed, I decided to use Turbo Tax for the first time when for the prior year’s taxes, I felt H&R Block charged me so much money that I felt like I had been mugged and robbed. I really like Turbo Tax and plan to use it again this year. My parents still use a professional to do their taxes.

  13. Diane says:

    I used to fill out the forms by hand, then my husband had an accountant, due to being in business for himself.

    Since my divorce 12 years ago I use TurboTax and I’m very happy with it.

    My mom used an accountant as she was in business for herself also.

  14. daenyll says:

    my mom always fudged her own, my dad uses a CPA, and I’ve used Turbotax for the past couple years cause I don’t have the time as a student to read up on the changes to the code to do it correctly myself

  15. Shari says:

    My parent do their taxes by hand. I use free e-file now, before I did mine by hand. Now that I think about it I am definitely an example of my behavior reflecting my parents.

  16. Guy in San Antonio says:

    I am a CPA. While the tax work I do is generally corporate work, I tell my sales reps and people who ask to go grab Turbo Tax. If you follow the interview process and do a little research, you will save yourself a ton of money. If your situation is complicated, then maybe you need a pro but you are going to pay for it! The IRS is not a bunch of monsters. If you make a mistake, they usually will only charge you the tax plus some interest. They are not after people who make honest mistakes.

    The real criminals are the tax prep offices that charge regular folks $50 to file a 1040 EZ! They should be arrested.

    • Jeff says:

      “The real criminals are the tax prep offices that charge regular folks $50 to file a 1040 EZ! They should be arrested.”

      Amen to that. There are returns that can be cranked out in just a few minutes. That even includes billing and mailing!

      Jeff

  17. I hire a tax lawyer, because of the complexity of the various sources of income and deductions and because of my English-major math.

    I keep track of everything in Quicken, print out a category report at the end of the calendar year, and fork it over to the tax lawyer along with all the various pieces of tax-related paper that come snowing into my mailbox in January and February.

    Amazingly, her fees are nothing like what I used to pay for a CPA. That may change this April, though, since I incorporated my sole proprietorship. {cringe!}

  18. javi says:

    My parents would go to H&R Block to to their taxes. For me, I filed the paper version of 1040EZ or I used Turbotax. I have been using Turbotax for years and haven’t looked back.

  19. LDorado says:

    Many years ago I happily used TurboTax but dropped it forever when they become fond of installing spyware that paying customers wern’t told about and couldn’t remove. I switched to TaxCut, saved money, and never looked back. My mother-in-law is in her 80′s and also uses TaxCut.

  20. Shirley says:

    My parents always had their taxes done by a professional, so that’s the way I started out too. Then along came computers! :-)

    TaxACT software fills my needs quite well and I’ve always been very satisfied with that.

  21. Jim Kibler says:

    I do mine online every year with H & R Block because they have all of my information and it only takes me about 30 minutes.

  22. BrianC says:

    I started out doing them by hand, then tried H&R Block for a few years, and now I use TurboTax. My dad always does his by hand, and my mom gets an accountant to do hers. So I guess not much influence in this case, but yeah, if my parents were using a particular product and I had no clue what to do–I would follow what they were doing. I know I did that when I first got car insurance.

  23. Rich says:

    I have used TaxAct for some time now; before that I did them by hand myself. No real parental influence – they have always had them professionally done.

  24. Jenn says:

    Two accountants. Same ones as my parents (my finances are tied in with theirs through a couple llc’s and it just makes life easier).

    I do most of my business tax stuff myself though.

  25. Mark says:

    My dad handed me a 1040EZ when I was in High School with my first job, and I used that thru college and the first 2 years I worked, but then I bought a house and it was Turbo Tax from then on. I never saw my father do his taxes or talk about them.


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