For the first time in my life, it looks like I'll be getting a substantial tax refund this year, primarily due to being a first-time homeowner. As with most years, I did my taxes at TaxAct Online, but I have been thinking that, with my tax situation beginning to get more complicated, maybe it's time to think about getting an accountant to look things over, or going to one of the big guys like H&R Block. I was wondering if anyone else here has any advice, or if they're just going to get me the same results I can get online. Anyone have any success / horror stories to share?

Your tax situation is not very complicated. You have a mortgage, so it now makes sense for you to itemize your deductions, but your deductions are not complex, either, most likely. All a professional is going to do for you is the math. You still have to have all your receipts for everything; he's going to ask you to give them to him. Collecting those receipts is the hardest part.

But you don't have any rental property or income that you're amortizing or tax shelters or anything actually complicated. The only thing that a professional could potentially do for you that you couldn't is realize that something is deductible that you didn't realize, and it's probably very unlikely that that's going to be significant.

I'm a homeowner as well, and I used to pay a little over $200 to an accountant for my tax preparation. Four or five years ago, I decided to prepare my own taxes (also using TaxAct Online). It turns out that I got nearly the same refund. Over the years, my taxes have become a little more complicated. TaxAct doesn't do a whole lot of hand-holding, but my results are still satisfactory. I just have to be aware of what I can claim as a deduction/credit. A professional almost certainly knows this better than me and/or can fudge numbers a little better.

Paying an accountant $200 vs $18 with TaxAct would likely get me a bigger refund, but I prefer the ease and quickness of doing it myself right now.

I have my taxes done already for this year on TaxAct. I'm ready to submit, but the IRS hasn't published the final version of the 2008 Alternative Vehicle Credit form yet. I don't know how the IRS gets away with this.

I've been filing using TurboTax for years, and it does the job easily. As Bitt pointed out, things don't start getting really complex until you've got trust funds, bizarre investments, overseas income, or other situations that are well outside of the norm.

Where a traditional accountant can have value:

- telling you want to do differently next time (e.g., telling you to max out your 401(k))

- backing you up if you get audited

(TurboTax sells "Audit Defense", which is basically an insurance policy against getting audited. If you do get audited, then you've got somebody in your corner to defend you. Again, unless you've got a far more non-trivial financial situation, it's probably not worth it.)

I’ve been using Turbo Tax for years and I’ve always been very happy with the results. I’ve had multiple businesses and other mildly strange tax issues. It always worked fine for me.

I’m in a similar situation. I refinanced my house and sold another house. Turbo Tax Premier says it will walk you through those changes. I got the on-line version through Scottrade for %30 ($35 for free efile). They really nail you with state for another $35. State is easy so I just do that with paper.

I like doing it at home so I can take my time. When going to a tax preparer you need to have all your paperwork with you at the time. When doing it from home and you forget something you can just go to your file cabinet and find it.

You can do the on-line version for free. That is up until you're ready to file. If you don't like it just quit.

Or you could use TaxAct, which, including State and Federal e-filing, cost me about $20.

Despite doing so many other things in my life online, I'm suspicious of doing my taxes on somebody's web server that may or may not collapse due to load or otherwise bad engineering practice. Not everybody engineers their servers like Google.

You drop $30 on the CD and run it on your own machine and these issues go away. $30 is chump change next to the cost of screwing up your taxes.

TaxAct is downloadable.

It's beginning to look like California will be delaying refunds till they absolutely must part with the money.

Sort of illustrates why withholding shouldn't be used in place of a savings account.

Me, it won't be a problem. I've been averaging +/-$10 on my Ca taxes for the last 10 years.

On topic, I'll be using pen, paper and snail mail, for my tax returns.

If you are just going to H&R Block you might as well just use the software that's all they are doing anyway. If you don't trust doing it yourself with turbo tax I would find a real CPA.

I just filled out a 1040 by hand until I got my house now I have been using Turbotax. For each entry they tell you what box on what form to get the info from so it's pretty easy.

I always had to pay in before I got my house so I would wait until the last minute to send it in.

I ended up staying with TaxAct online. I'm pleased with the refund, and the questionnaires were thorough enough that I'm pretty confident I didn't leave any deductions on the table.

Looking forward to filing jointly next year for an even bigger refund.

Joint filing is a mixed bag. Your incomes add together, so you end up at a higher tax rate than two separate incomes. This would be the infamous marriage penalty.

Given our current circumstances and the state of current tax law, I think we'd end up doing better filing jointly, but this is something I will definitely be looking into next year.

Single, Married/joint, and Married/separate are all different, unfortunately. To be redundant, filing as single and filing as married/separate produce different tax liabilities. And if you're married, you cannot file single.

Yes, I understand, and based on some quick calculations, I'm pretty sure we'll do better married/filing jointly than married/filing separately, but that assumes they don't go and change the laws again this year, which they probably will.

i feel so lucky to live in a country with "source tax", meaning that my employee are forced to hold back the amount i have to pay in tax, and pay the tax for me. All based on a card, that the goverment gives me. Each year I get a new card, based on what have happend in the 3 past years. Of course i can get the card altered in something is way off or missing.

At the end of the year, everyone has to report in to the goverment. Your employee has to tell your income. The bank has to tell about loans etc. And then about 3 months from the beginning in each year, you get your refund.. or bill if there have been paid to little (automated systems can be wrong).

For the last 3 years only stuff like transport to and from work has changed the tax return for me.

That's more-or-less how it works in the US, except we probably have more after-the-fact modifications than you do.

yeah... but is not so that you have to pay the tax yourself? i would be scared to hell, would be more than very tempted to use the tax money on something else

If you work for an employer (as opposed to working for yourself), tax money is sent to the government by your employer. There's probably a situation where employers with a very small number of employees are not required to do that, but that's effectively the same as being self-employed. And if the government receives too little tax money from you throughout the year, you might have to pay penalties. Self-employed people send in estimated taxes quarterly in order to comply with that.

You have to fill out tax forms and submit them between January 1 and April 15. At that point, you might have to pay more or you might get a refund.

>quarterly

pheeww... the same stuff for employers here...

But take a guess at our tax rates....?

Maybe, but how much do you pay for a trip to the emergency room? I'm guessing zero, or nearly. I just got through paying for one that cost me well over $800, and that's after private health insurance, which paid (or negotiated away) thousands, and for which I pay $137 a month. Not to intentionally give away how much I make, but that one trip to the emergency room cost me about 1% of my annual pre-tax income, not to mention the about 2% that I pay for the privilege of getting health care that "cheaply". And I make decent money. It's not like a person making half what I do would get a further discount. In fact, it's more likely that their insurance would be worse than mine.

</rant>

>Maybe, but how much do you pay for a trip to the emergency >room?

Zip, Zero....

Also the same for a visit to the doctor. A triple bypass.. you name it.

And if i loose my job the system gives me enough money to get a very small appartment. and some food on the table. but the amount i get is not big so you are more or less forced to cut all expenses to the minimum and look for a job...

but my tax rate is 49% of the income.. but it's calculated like this:

first they take 10%... then i have a "free" amount for which i dont pay tax... then they take the last 39%....´may sound insane, but then you have to look at the benefits...

the best that i could recommend is try to live here... but watching the movie Sicko by Michael Moore... i laughed my ass off to that one. But at the same time i was surprised that on Cuba they take care of everyone.

EDIT: an benefit that came to my mind is medicine... my GF need some pretty expensive anti depressive and "the system" pays for most of it, but we pay a small share ourselfes

After all the taxes here (state, federal, local, sales, whatever else) I would guess we pay 49% or more too and what do we get for it... too depressing to think about.

I started going through taxact last night. This is my first time doing married so I figured I would go through jointly and separately and see what comes out the best.

AFAIK, anyone can direct their employer not to deduct any taxes, regardless of the size of the employer. I recall having to sign forms of that sort the last few times I was hired, anyway.

It's graduated taxes. The US, and Canada have the same sort of structure, only at different levels. You can see the brackets on wikipedia.

I nearly cried just now -- I discovered that at my current pay scale, I'd be paying less tax in Canada, than I am in the US.

Except that the feddies really don't much like it when one fails to forward their withholding.

Even the self employed must make an estimate of what they expect to pay for the year, and forward quarterly payments.

Umm, did you remember to deduct Provincial tax on top of Canadian federal? And to be absolutely fair you can't forget the GST on just about everything purchased, 100-1000+% tax and markup on alcohol, a bunch of tax on gasoline. More tax on alcohol (tax on tax) when purchased at a restaurant or bar. And and....

Blame Canada!

There are state income taxes in most US states, too. And there are sales taxes most places in the US. And tax on gasoline.

Actually, I looked it up, and Danes pay income tax on the first x euros(?) of income, then none on the next y euros, and then more income tax on the remaining income. So it's not graduated in the manner that I would think of.