Do my own taxes or hire accountant?

amother

Taupe

Sun, Jan 06 2019, 11:00 am

I’ve always used turbo tax to file my taxes. It ends up costing me maybe $50. My husband and I both get w2 and then some 1099 from savings accounts. Pretty basic. We bh bought a house this year. We live in ny. Is there any reason I should go to an accountant? Will he know of any more deductions or will turbo tax be just as good?

amother

Ruby

Sun, Jan 06 2019, 11:07 am

amother wrote:

Both Turbotax and your accountant will ask you for the interest paid on your mortgage, and your property taxes.

An aggressive accountant would try to figure out if you can get deductions for 'home office' or renting some part of your house (at a loss of course).

amother

Violet

Sun, Jan 06 2019, 11:47 am

amother wrote:

I just want to point out that my tax professor said that ALL her clients that took a home office deduction were audited. So you may want to be careful about that.

amother

Ruby

Sun, Jan 06 2019, 1:14 pm

amother wrote:

I just want to point out that my tax professor said that ALL her clients that took a home office deduction were audited. So you may want to be careful about that.

Note that I wrote "aggressive accountant".

These kinds of audits are slowing down. The IRS doesn't have the resources.

amother

Vermilion

Sun, Jan 06 2019, 3:08 pm

If your income is up to $60,000 there are IRS Vita sites that will do your taxes for free.

Otherwise, you should use TurboTax. The Standard Deduction in 2018 for a married couple is $24,000, unless your property taxes and mortgage interest are greater than this amount you will most likely not be itemizing your deduction, and your tax return will be simple.

Also, home office expense is a miscellaneous itemized deduction and is disallowed for the year 2018.

amother

Violet

Sun, Jan 06 2019, 3:11 pm

amother wrote:

If your income is up to $60,000 there are IRS Vita sites that will do your taxes for free.

Otherwise, you should use TurboTax. The Standard Deduction in 2018 for a married couple is $24,000, unless your property taxes are greater than this amount you will most likely not be itemizing your deduction, and your tax return will be simple.

Also, home office expense is a miscellaneous itemized deduction and is disallowed for the year 2018.

Property and state taxes are capped at $10,000 for 2018, but mortgage interest may be enough to make it worth itemizing. TurboTax can help you with this.

amother

Vermilion

Sun, Jan 06 2019, 3:16 pm

amother wrote:

Property and state taxes are capped at $10,000 for 2018, but mortgage interest may be enough to make it worth itemizing. TurboTax can help you with this.

Yes, you're right, there are also limits for mortgage interest deductions for 2018.

I found this online:

Starting in 2018, mortgage interest on total principal of as much as $750,000 in qualified residence loans can be deducted, down from the previous principal limit of $1,000,000.

amother

Ruby

Sun, Jan 06 2019, 3:16 pm

amother wrote:

If your income is up to $60,000 there are IRS Vita sites that will do your taxes for free.

Otherwise, you should use TurboTax. The Standard Deduction in 2018 for a married couple is $24,000, unless your property taxes are greater than this amount you will most likely not be itemizing your deduction, and your tax return will be simple.

Also, home office expense is a miscellaneous itemized deduction and is disallowed for the year 2018.

SALT deduction is limited (below 24,000 ) Donations are not.

Home offices are available for the self-employed. Accountants are creative people.

amother

Violet

Sun, Jan 06 2019, 3:20 pm

amother wrote:

Note that I wrote "aggressive accountant".

These kinds of audits are slowing down. The IRS doesn't have the resources.

I heard this very recently. It's possible these audits are slowing down, but this is still the first tax return they will choose to audit.

You can be as creative as you want as long as you don't mind having to pay penalties if audited.

amother

Vermilion

Sun, Jan 06 2019, 3:21 pm

amother wrote:

SALT deduction is limited (below 24,000 ) Donations are not.

Home offices are available for the self-employed. Accountants are creative people.

OP said she has W2 only.
Home office expense is not an itemized deduction for the self-employed. It is a Schedule C expense.

amother

Ruby

Sun, Jan 06 2019, 3:22 pm

amother wrote:

The point is - Turbotax is fine for the OPs profile. If she wants to be creative, take some risks while she is at is - she can talk to a professional who can guide her.

amother

Violet

Sun, Jan 06 2019, 3:26 pm

amother wrote:

The point is - Turbotax is fine for the OPs profile. If she wants to be creative, take some risks while she is at is - she can talk to a professional who can guide her.

It doesn't sound like you are recommending a professional at all. Someone who is willing to take risks doesn't sound too professional to me.

In general I think turbo tax is fine if you are good with numbers and are financially savvy. Very few meet that profile so if your tax return is a bit more complicated it's probably better to hire a professional just so that you don't have the headache.

amother

Vermilion

Sun, Jan 06 2019, 3:53 pm

amother wrote:

Property and state taxes are capped at $10,000 for 2018, but mortgage interest may be enough to make it worth itemizing. TurboTax can help you with this.

It may or may not be worth itemizing, partly depending on what part of the year OP has purchased her house.

octopus

Sun, Jan 06 2019, 4:25 pm

My dh does our taxes on turbo tax. You can only claim home office only if it is an exclusive area in your home that you use just for your work. Otherwise you can get into trouble.

amother

Ruby

Sun, Jan 06 2019, 6:56 pm

amother wrote:

OP said she has W2 only.
Home office expense is not an itemized deduction for the self-employed. It is a Schedule C expense.

Again - with some imagination a person earning from a W2 can also file a Schedule C.

Would not suggest doing this without seeking guidance.

amother

Ruby

Sun, Jan 06 2019, 6:57 pm

nchr wrote:

Your taxes will probably not cost you too much to file with an accountant anyways, so I'd go for an accountant.

Ha - an accountant to do this work for $50?

amother

Violet

Sun, Jan 06 2019, 6:58 pm

amother wrote:

Again - with some imagination a person earning from a W2 can also file a Schedule C.

Would not suggest doing this without seeking guidance.

Not quite. Losses have to offset income. Honestly, this sounds suspiciously like fraud.

amother

Ruby

Sun, Jan 06 2019, 7:00 pm

amother wrote:

You don't need to financially savy to use turbo tax - and her profile on the face of it is not complicated - and there would be no headache - she's been doing this herself for a few years already. Turbotax is programmed to ask questions about her mortgage interest and her property taxes - thats all thats changed.

And yes - there are very professional accountants who are aggressive. So long as they are disclosing this to their clients - there is no issue.