Foo - 2012 taxes - DIY or hire a pro?

My wife and have always filed ourselves - it's been easy enough; no kids, no itemizing, we just rented an apartment and each had basic FT jobs. No wacky finances, just basic retirement and a few stocks.

This year we bought our first home and tapped a small portion of retirement funds to do so. We'll need to make sure we're not penalized (1st time home buyers shouldn't be penalized for early distribution) and that we get the full deduction benefits of mortgage interest, home improvements we laid out for, etc.

Some people say yes, hire a pro and pay (a few hundred bucks?). Others say nonsense, just do a Quicken or what have you. Not sure if we'd be biting off more than we could chew, or if the software would be much cheaper than just paying someone to do it for us.

Any advice would be appreciated.

I paid like $50 for my tax session and that included for my commercial taekwondo gym.

Have an electrician do it?

We've always used turbotax, but hope to be buying our own home later this fall (and changing states right at the end of the year), so I'm not sure what we're going to do. Hopefully, we can change our residency Jan 1, so as not to have to deal with two state tax issues which have pained me greatly in the past.

H&R block. I think our taxes are much more simple than yours but I'm not sure, mine took maybe half an hour

I always have a pro do it and she uses H&R Blocks software.

The cost isn't to bad, I have to cook most of the time and I would have to cook all the time if I got rid of her, but she does clean really well. Plus I think my son might start to miss his mother.

Marring a Tax Accountant is a big advantage once a year.

My wife and have always filed ourselves - it's been easy enough; no kids, no itemizing, we just rented an apartment and each had basic FT jobs. No wacky finances, just basic retirement and a few stocks.

This year we bought our first home and tapped a small portion of retirement funds to do so. We'll need to make sure we're not penalized (1st time home buyers shouldn't be penalized for early distribution) and that we get the full deduction benefits of mortgage interest, home improvements we laid out for, etc.

Some people say yes, hire a pro and pay (a few hundred bucks?). Others say nonsense, just do a Quicken or what have you. Not sure if we'd be biting off more than we could chew, or if the software would be much cheaper than just paying someone to do it for us.

Any advice would be appreciated.

Software does a good job and is cheaper. My wife always goes with H&R Blocks software because it is a little cheaper than Turbo Tax. She generally tells most individuals to go with the software and that it is really easy, plus if you take it to a tax service, they are just going to enter the information into some software package anyways. They don't do them by hand, all they will do is look over the return after the software spits out the results.

I use Turbo Tax Deluxe. It's usually on sale at Costco in January. I upgrade to the Premiere version if I've sold any investments because it downloads the information from the broker's websites and I don't have to input all of the data.

This is all great to know, thanks folks!

Have an electrician do it?

That's another option, sure. Are there any antiqued brass electricians with a center-cut circle out there who can operate a calculator at 220V?

This is all great to know, thanks folks!

So you are going to take my advice and figure out how to hook up with a tax accountant?

Only downfall, they tend to be tightwads, so getting funding for new bikes can be difficult.

Well, a divorce will likely make my return even more complicated, so, no.

Your world has changed. You are now itemizing. Did you donate anything anywhere? used clothes to a local shelter? Those count. Car registration?

Good chance gonig with a real pro can be helpful. A real pro, not someone who just uses the same software you can get.

Of course a real pro does a bit of planning also, thinking of getting those deductions before the year is over.

Well, a divorce will likely make my return even more complicated, so, no.

No divorce, just become mormon and add an extra wife. Once you explain to the current wife that you only want the new one for the extra money she brings in and her tax preparation ability and NOT the sex (which is just a formality you have to put up with), I'm sure she'll go for it.

I think software will be just fine in your case. Turbo Tax, TaxCut, etc do a pretty good job nowadyas. Just don't rush through it and read the questions the software prompts you carefully. And do it twice :)

Your world has changed. You are now itemizing. Did you donate anything anywhere? used clothes to a local shelter? Those count. Car registration?

Not really, we have dropped off old clothes at a textile recyclers booth at the local green market. No car. We did pay a bit here and there for electrical work :) and re-did our wood floors. Also put in new light fixtures in a couple of rooms. I think that's about it, though I guess the risk of DIY is we'll miss something. My sister is a tax attorney so I suppose I could pick her brain before doing the software route...


I think software will be just fine in your case. Turbo Tax, TaxCut, etc do a pretty good job nowadyas. Just don't rush through it and read the questions the software prompts you carefully. And do it twice :)

Thanks, and yes, we always do our math two or three times before sending in the returns anyway.

I am kinda thinking, if we can handle the basic NY State return, which has all sorts of wacky mathematical formulas centered on extremely minor amounts (20 mins of math to calculate a credit of $.45, or whatever - does every state torture its residents so?), we should be able to do the software route...I'm mostly worried we'll miss out on deductions we're unaware of, or if we did botch up, we will owe more than we originally thought...although we always save all year towards our tax bill. It's pretty much been the same amount (+/- 5 - 10%) for years, and this year we're on track to save twice that in a dedicated savings account, just in case...I am hoping whatever we'll have to pay extra for taking money out of IRAs will be offset by deducting interest on our mortgage for 9 months (we bought in March).

I use Turbo Tax Deluxe. It's usually on sale at Costco in January. I upgrade to the Premiere version if I've sold any investments because it downloads the information from the broker's websites and I don't have to input all of the data.

This. Turbotax could not make it any easier, especially if you do not have a complex tax situation. I've used it for years.

No divorce, just become mormon and add an extra wife. Once you explain to the current wife that you only want the new one for the extra money she brings in and her tax preparation ability and NOT the sex (which is just a formality you have to put up with), I'm sure she'll go for it.

well, okay, so long as they allow jet skis in Utah.

Marring a Tax Accountant is a big advantage once a year.

New spouse every year? Tax time, need to find a hot tax accountant and get married.:)

Yup I'm another that uses turbo tax.

I've owned 3 houses, some converting in and out of rentals, so between balancing those deductions with 401k contributions, and other things has always been well explained. I will not say its "easy" as I've had to read the tax law for some of the rental stuff so I knew what turbo tax was actually doing, but in the end it does a fine job.

I'd say the unless you have some REALLY weird stuff going on (which it sounds like you don't) just do turbo tax. I dont even buy the software anymore, I just do it online. E-file is really easy and most of the time I get my refund before April 15th :)

Pro, @$550 for everything. I'm a small business owner.

I have never regreted paying the tax guy to do our taxes. They are, or should be, experts at tax law. They will think of things that you don't know about, somethings sofware like Turbo Tax can't do. They can also give you tips for what to do for next year.
Go with a pro.

I always have a pro do it and she uses H&R Blocks software.

The cost isn't to bad, I have to cook most of the time and I would have to cook all the time if I got rid of her, but she does clean really well. Plus I think my son might start to miss his mother.

Marring a Tax Accountant is a big advantage once a year.

How long before it's damaged beyond repair?

Sign me up as another tax software (Currently H&R Block) user for the past couple of decades. Easy-peasy. I buy the basic version at Wally World for $ 15 early each year. Washington state has no state income tax.

Not really, we have dropped off old clothes at a textile recyclers booth at the local green market. No car. We did pay a bit here and there for electrical work :) and re-did our wood floors. Also put in new light fixtures in a couple of rooms. I think that's about it, though I guess the risk of DIY is we'll miss something. My sister is a tax attorney so I suppose I could pick her brain before doing the software route...



Save the receipts for any capital improvements you do to your home after you bought it. When you sell the place you should be able to add them to your tax basis for the house.

I'm done doing my own. No shame in hiring someone and the decision isn't permanent - meaning you can hire someone this year and go back to doing it yourself next year.

Save the receipts for any capital improvements you do to your home after you bought it. When you sell the place you should be able to add them to your tax basis for the house.

will do, thanks!

Since my wife passed away in 2002 my life has become very simple again and I have no children, no real estate, and no investments outside of my 401K, and so I feel that can afford to pay a bit more than most people. Because of that I file a simple 1040EZ and take only standard deductions, so I file using a very basic online service like eFile

I'm done doing my own. No shame in hiring someone and the decision isn't permanent - meaning you can hire someone this year and go back to doing it yourself next year.

yup, that would be the plan; the only real change in following years would be continuing deductions for improvements and the interest paid on our mortgage.

Eventually, if we sold our current place and bought somewhere else, I would strongly consider a pro's services.

I think this year we are gonna take a look at what it looks like asap in January or so, and if we can't handle it, we'll look for someone who does a bit more than just plug in the numbers...so, such a pro would run around $500ish?

hired someone this year and will use them next year, hopefully do my own again after that unless I make my life complicated again ...

Bumping this since it is getting to that time of year.

Any more recommendations on software? I have always filled the forms out myself, but don't feel like it this year.

heh, i just dug this thread up a few days ago to review everyone's recommendations. We're still weighing our options, but as soon as our W2s arrive we will probably give it a quick go ourselves with free software. Meanwhile, I have begun making inquiries with local CPAs, just in case...

so - update:

we finally said wtf and paid $50 for Turbo Tax, on sale. Did it ourselves, re-did it, did some research, asked some questions, re-did it a third time and we're pretty confident we didn't miss anything; the end results were pretty much the same all three times...

The Good: as homeowners we we definitely did better itemizing, rather than taking the standard deduction. We should actually get a few dollars back next year.

The Bad: because we got a great deal on our mortgage (low fixed interest rate), the credit on that biggest deduction for us won't ever amount to anything truly significant (obviously these first few years of loan repayment are going to be as good as that gets for us).

The Ugly: I had done some loose math in my head over the past few months, and reckoned we'd owe twice as much as normal ... well, I did a bonehead move there and didn't allow for various things, and the takeaway is we owe roughly four times what we normally pay. Ouch.


Oh, well. This was caused by financial moves necessary for the hefty co-op down payment requirement. The upshot is, we got the aforementioned great rate, at a price well below market value for our place and recently we're seeing apts in our building selling for an additional 15% or so over what they were fetching last year. Essentially, after one year of ownership we have roughly 40-45% equity in the property...All of which makes us feel the initial financial pains will be well worth it in the long term.

so - update:

The Bad: because we got a great deal on our mortgage (low fixed interest rate), the credit on that biggest deduction for us won't ever amount to anything truly significant (obviously these first few years of loan repayment are going to be as good as that gets for us).

Don't feel bad about getting a good interest rate, you are way better off. You're not getting a dollar-for-dollar credit to your overall tax liability for the interest you pay. You're getting an adjustment/reduction of your gross income used to calculate your tax liability.

I hired Turbo Tax. Need to withhold less, cuz we're getting a ridiculous refund. At least we can get a much needed A/C replacement for the house.

Don't feel bad about getting a good interest rate, you are way better off. You're not getting a dollar-for-dollar credit to your overall tax liability for the interest you pay. You're getting an adjustment/reduction of your gross income used to calculate your tax liability.

No, I totally hear you; I'm more than happy to take our situation as it stands.

And this is not a huge mortgage b any means, so after 5-7 years when that advantage starts to go away, we'd be happy to start paying more each month to whittle the principle down. This, of course will depend on things like income and whether we need to fix major stuff (the kitchen and bathroom are more or less the original stuff from the 1930s, with little band-aid fixes on whatever has broken over the decades...a renovation is more or less what's needed, but we'll see if we plan to stay put before doing that)

I hired Turbo Tax. Need to withhold less, cuz we're getting a ridiculous refund. At least we can get a much needed A/C replacement for the house.

Lucky you; I can't remember the last time I got money back. The sad part is, I claim "0" on my W-4...

Even though we're homeowners, this year, we wouldn't have done better by itemizing. The interest rate is low enough on our mortgage that the amount we paid didn't add up to enough to make a difference. It also makes sense given that our mortgage is relatively small.

This year, I just did the taxes myself. I don't find them difficult at all.

I hired Turbo Tax. Need to withhold less, cuz we're getting a ridiculous refund. At least we can get a much needed A/C replacement for the house.
I'm right there with you. What with all the wackiness in the gov't finances this year, it would have been a good year to owe as I wouldn't put it past them to hold onto my refund for a few extra weeks/months to try using it before sending it back to us. I was surprised because it took ~10 days for the Feds to accept our e-filing (state took it within 6 hours). First time I've had that with using Turbotax. Oh well, when we do eventually get our return back, it should give us the cash to do radon mitigation and fix some windows in the house we bought in December. Buying so late meant we didn't have much interest or mortgage insurance to deduct, but I'm happy with the 3.375 interest rate I got. Especially compared to the 7-8% my parents and in-laws paid when they bought their houses in the 70's.

Wow, both of ours were accepted within about 45 minutes.

Do it yourself, then hire a pro.

We had a fairly complex situation this year with being relocated from NM to FL for a year. State taxes vs. no state taxes, moving expenses, plenty of itemizations to deal with was more to deal with than usual. I've done Turbo Tax for past 5 years or so with satisfactory results. I carefully entered everything this year and it came back with a pretty high amount being owed.

So I took all info over to H&R block and they did a free review. They came up with ~ $1300 less owed. Even with their $240 fee, I still save over a grand. I watched them enter EXACTLY the same info I did. Needless to say, I did not argue or question how they could be saving me more. So I quickly checked out and am happy I chose this route. I will likely double-check with them in future years, as apparently I just don't know how to work the numbers like they do.

wifey suggested we do ours ourselves again and I just looked at her and said that's what got us in trouble in the 1st place

You guys have started already?

Yeah, I like to do it as early as possible to get it out of the way.