I just finished my wife’s and my personal income taxes. With the exception of one year I’ve been doing my income taxes myself for the last 46 years. The single year I used an accountant to prepare my income taxes, some twenty-five years ago, it was screwed up royally and I ended up paying a penalty.
For the last several years I’ve been letting TurboTax do the drudgery for me. I’m delighted with its ease of use and results. After reviewing almost 70 years worth of my parents’ federal income returns over the last couple of months, poring over the chicken-scratchings and scrawled notes, I’m glad for TurboTax and I’m sure my dad would have loved it.
My dad tended to be an early adopter. He was the first lawyer in St. Louis to use a Dictaphone (if you can imagine that), the first to purchase an electric typewriter, the first to own a copying machine. I have no doubt that by the time personal computers came along he would already have been using word processing for some time and would have jumped eagerly on board the PC bandwagon.
I “feel your pain.”
The first year I was a PE principal I did my taxes on TurboTax (as I had for years). Feeling that it might be more complicated, in year two (and ever since) I went to a pro. Looking at what the acct did I was horrified at my amateurish attempt.
This is an indictment of the tax code, not tax accountants.
My son informed me, havent had time to confirm yet, that $300 billion was spent on tax preparation last year. Does that sound right? It certainly seems like we are long overdue for tax reform including major simplification. Weren’t Wyden and Judd offering a joint plan?
Steve
The recent story on half of people don’t pay federal income taxes makes a good case for simplification. (I don’t want to reopen the argument about whether FICA or other taxes count) But I believe a lot of these deductions are sold as working class benefits, but they are no doubt only enjoyed by above median income earners.
One thing I’ve observed for the first time this year was the growth of tax service providers in low income areas in this town. I don’t know if this old and I just saw it, but my suspicion would be that they are straddling a line between pay day loan places and specialist in earned income tax credits. Anybody else notice anything like this?
steve, from the Tax Policy Center, I see too groups of stats in friction:
1. 3 out of 5 filers pay someone to do their taxes and 1 out of 5 filers use software;
2. Two-thirds claim the standard deduction and don’t itemize our deductible expenses. And 40 percent file one of the simpler tax forms: the 1040A or the 1040EZ.
That support what a tax accountant friend told me; most of his clients could certainly do their own taxes, but it’s like having a lawn service; at some point in life they just don’t want to do it anymore.
PD-I think your conclusion has merit, but I also think a lot of people are afraid they will do something wrong.
As to the increase in low income areas, I believe they are offering instant returns. I have seen guys standing on the street corner with signs hawking income tax service with cash on the spot if you qualify for a return. Probably a payday loan type scam.
Steve