April 01, 2008
Every year for the past twenty-four years I have prepared my own taxes. For many years my income and filing status allowed me to use the 1040-EZ form, eventually I graduated to the infamous 1040 Long Form. In 2000, after going into business for myself I was introduced to self employment tax, Schedule C and other forms I care not to remember now. For the past several years I have lived in one state while working in another, and for much of that time I had an employer who only withheld tax for the state where he was located, not where I was actually working.
This year, like every year before it, I set out to prepare my taxes once again. With a copy of Turbo Tax downloaded and installed, along with the state editions for Kansas and Missouri I ran through the entire interview, even the sections I knew wouldn’t apply. The results were far better than last years, but still not quite what I had expected.
After letting it sit for a day I sat down again last night and started over fresh in a new return. After completing the interview I had different results. Worse than now not knowing which set of returns was correct, I had no idea what answers I had changed or what had changed the results.
Sibylle, being self-employed, has an accountant who prepares her tax returns. She compiles in a couple of hours (due to good record keeping throughout the year) a summary of her expenses and income and Gary does the rest. We dropped her information off on Saturday morning and Thursday afternoon she picked up the completed forms. This was my first encounter with accountant prepared taxes, and I must say I liked what I saw; I liked the lack of stress and worry.
So last evening after fumbling around in depths of two state returns, multiple sources of income, and questions that I have no frame of reference to understand, much less answer accurately, I threw in the towel. Today we are making an appointment to submit the necessary financial information to Gary so that he can compile my taxes. I had originally dismissed this idea as I didn’t want to spend the money on preparation costs. However I am now seeing the cost as buying far more than the preparation. It buys peace of mind and a sense of relief.
Taxes don’t need to be emotionally draining, and physically upsetting. When I owned a home I had an electrician, and heating/cooling contractor, and a plumber I called when I needed work done. I know how to do those household maintenance chores but I preferred to pay an expert. It’s time to start paying an expert to manage the mandatory annual reconciliation with the federal government.