Every year around this time, I sit down with a copy of Turbo Tax and sort out our taxes. As daunting as taxes are to some, I actually enjoy it. I know, I know… Sick. But I actually consider it to be one of the most valuable financial exercises that I go through each year. It serves as both a detailed year-end review and an opportunity to plan for the upcoming year.
And guess what? It’s not actually that bad once you have the paperwork pulled together. In fact, it would take me nearly as long to organize and annotate everything for an accountant as it does to simply enter it into Turbo Tax and get my answer. Don’t get me wrong… I definitely see the value of consulting a tax professional if you have lingering questions. In fact, I did just that last year. But even if you do use a tax pro, I still recommend doing a dry run on your own.
The bottom line is that there’s no better way to get a feel for the best ways of minimizing your tax burden — like by discovering new types of income tax deductions that you may be eligible for going forward — than by working through the calculations yourself. Even if your tax preparer provides you with a list of recommendations after crunching the numbers for you, you’d be surprised at how much more you can learn by playing with the numbers yourself. Moreover, you’ll never know if you’re getting your money’s worth if you don’t run the numbers yourself and see how the results compare to those of your tax pro.
Last year, which was the first time I had ever paid to have our taxes done, I found that my own results were nearly identical to those of our tax preparer. Thus, while I’ll definitely pay him another visit if I run into any particularly sticky scenarios, I’ve decided to return to my habit of preparing our taxes myself for the foreseeable future. While Turbo Tax cost me a bit under $40, the insights provided by doing our taxes myself are priceless.
This article is part of the MBN Group Writing Project on taxes.
Here are the contributions from other member sites:
Consumerism Commentary: Is it Better to Receive a Tax Refund or Owe the IRS?
Free Money Finance: My Best Piece of Tax Advice
Get Rich Slowly: Mr. Lawyer and Mr. Accountant Chat About Taxes
Mighty Bargain Hunter: A tax tip from my pastor
No Credit Needed: A Taxing Situation – My Biggest Financial Regret
Wise Bread: Certainties: Death, Taxes, And Change