For as long as I can remember I’ve done my own taxes using Intuit’s TurboTax. I’m a competent guy and am pretty knowledgeable with accounting and the tax code. However, as I get older, I realize more and more how valuable my time is.
In This Post
Why I’m not doing my taxes this year
I’m not saying that I’m so great, but I think each of us has better things to do with our time than spending a few hours filling out forms and praying we don’t make a mistake that will trigger an audit by good old Uncle Sam and his friends at the IRS. I’d much rather spend time with my wife and son, with friends, working out and getting healthier, catching up on projects around the house, and updating my sites with posts. I’m sure you have your own set of priorities that are rated much higher on the scale than sorting out 1040, Schedule A, 1099-DIV, etc forms.
What I’m doing instead
So, this year, I am using a CPA to do my family’s taxes. I still had to do some heavy lifting to prepare my Quickbooks profit and loss statements for both of my rental properties and my website, but I would want and need that information anyway for personal analyses of these side businesses.
Apart from saving myself a few hours of tax preparation, financially it makes sense as well. Last year, I spent about $90 buying the small business version of TurboTax, plus another $40 on Audit Protection service. Then, to file, I paid $90 to file electronically in two states and federally. All total, I spent $220 preparing my 2012 tax return myself vs. $350 by having a CPA prepare them for me. So, in exchange for paying $130 more than I paid last year, I had a professional prepare my tax returns and saved myself about 3 hours of time. That’s $43 per hour. I certainly value my time more than that….either by the amount of money I can make dedicating myself to other side business activities or by spending more time on personal priorities.
I still prepared my Mom’s tax return myself using TurboTax’s online software because I earned 1,000 Southwest Airline points. It was supposed to be free, but check out how free turned into $75… and could have been $150 if I had taken all of TurboTax’s offers. Read about my experience here.
Conclusion
In the end, I still spent about 30 minutes reviewing our tax returns. It was the first year that the CPA and i have worked together, even though I have known him for almost 9 years. So, I needed to make sure he understood my situation and included all the pertinent facts and forms that I sent him. After a couple small changes, our tax returns were complete.
