$1800 Diesel Tax Credit (TurboTax problem)

[z2g]

Originally Posted by Penguin

You might be right about that, as I don't have any data and wouldn't want to idly speculate on the distribution of peoples' motivations.

I just based it off of my own insights and observations of ppl around me and ppl on different forums. Sure, some (very few) do it themselves because they know how to do it and there's no point in paying someone else to do it when you can do it. But, from observation, most do it themselves because they'd rather not spend the money on a CPA and go on internet forums for help when their software isn't much help with such specific questions.

[Diesel Guy]

Turbo Tax is fairly decent if your household income is affected by the AMT......'cause nothin counts for a deduction once the dreaded AMT kicks in.............

[Craig]

Originally Posted by z2g

Yes, but a CPA understands the tax laws. Most ppl who use tax preparation software do NOT know the tax laws and depend on the software to guide them step-by-step. These same ppl also go on internet forums to ask tax questions while they are trying to figure out their taxes.

So, there's a huge difference there. One (the CPA) uses specific software to make it easier to prepare the tax documents, but has knowledge of tax laws and requirements. The other (average Joe with no tax knowledge) uses tax preparation software with no background or understanding of the tax laws and depends on the software for all the information. And, many times, the software may not get into specific details on certain deductions.

I agree with you, that's why I use a CPA...

Craig

[DSE]

Originally Posted by Penguin

For many it is not a matter of cost.

I do my own taxes as (a) I want to know what was done, since I am signing the return and have the legal responsibility, and (b) I can do a better job than most CPA's would do, since I know the records and I have the motivation... sorta like why I do my own auto repairs when possible, rather than depending upon a dealer or mechanic. Frankly I could never fathom why anyone would hire a CPA to do their taxes and put their financial fate with the IRS into the hands of a complete stranger.

I too could afford to hire a CPA to do my taxes, but unlike most members of Congress, I too do my own taxes. I think it is a valuable educational process, and I think it is unfortunate and absurd that we have such a complex tax code that people feel the need to hire a professional someone else to do their taxes. If it wasn't for Turbotax, however, there is no way I today that I would have time to do my own taxes.

If we could just require all members of Congress to do their own taxes (and then audit their returns!), I am certain we'd get a much more simple and fair tax code, but then CPA employment would plummet.

Anyway, thanks for letting us know about the upcoming fix. I usually wait until March or April to do my return as well.

reminds me of the absurdity of I think if Congressmen and more people

[Penguin]

Originally Posted by DSE

If it wasn't for Turbotax, however, there is no way I today that I would have time to do my own taxes.

I agree. I do a lot of stock trading, and it is quite simple to export the trades from Quicken into TurboTax. If I had to do it manually, I would probably have to use a CPA.

One other benefit of doing your own taxes is that I have a much better idea of the tax implications of my financial decisions during the year. I suspect if I had someone else do my taxes, I would not be as tax-savy about financial decisions during the tax year.

Of course, if someone wishes to use a CPA, that may be the best solution for them and their particular situation. But for some, doing your own taxes, rather than using a CPA, makes sense.

As an aside regarding the AMT and the $1,800 Diesel Tax Credit, for 2009 (and I believe 2010) the AMT will not limit the $1,800 credit. This is a change from 2008 and earlier.

[Armand]

Originally Posted by z2g

Yes, but a CPA understands the tax laws. ...

I have used several CPAs over the years and for the last few years I have been doing my own taxes. For simple situations especially when there are no corporations or complicated filing requirements, there is no need to get a CPA to do your taxes.

My most recent experience with a "recommended" CPA was about the accelerated asset depreciation for business use. I soon realized he knew less than I. Furthermore, he was using the same research tools (IRS web site!) So, at the end he discovered he was not adding any value. He did not even charge me for his time. I would not want that guy to save my ass in case of an audit

[ABMW]

If your tax situation is simple, there's little reason to use a CPA. If you have unusual circumstances, mixed income sources, corporations, etc., you're far off better using an excellent CPA.

But as has been pointed out, not all CPAs are alike. You must find a good one. There are many idiots out there. So start looking early.

Going back to Turbotax, at the end of your filing it will give you the option to purchase Audit Insurance. I STRONGLY SUGGEST YOU PURCHASE THIS. It's only $30.00 per tax year.

Last year, I was audited and was asked for some absurd documentation.

The company turbotax contracts out with (the audit insurance company) performed one of the most fantastic jobs I've ever seen. Their services were worth thousands.

I owed nothing, and I knew I owed nothing, but that didn't mean my stress level wasn't through the roof before I contacted them. They assisted me in producing the 100+ documents the IRS required, and went to bat for me against the IRS.

For $30.00, you can't afford not to buy this service. One hour with a tax attorney can easily cost $250 to $300 depending on where you live, and I would have needed many hours, to be sure due to what ended up being a simple IRS error in their calculations.

This year, given that I do have a corporation, rental properties, income from multiple sources, massive business expenses, and multi-state income, I'm going to use a CPA that I've vested for many months.

It will be my first foray into using a CPA, and while I'm not thrilled about it, I do know when to say when.

Understanding IRS Publications is one thing. But, keeping track of the case law that is continuously coming out of Tax Court is another. I'd caution anyone, to consult a CPA, if you're on the cusp. The IRS publications do not do a good job of demonstrating the "tests" that IRS Prosecutors and Courts use to determine if a particular asset is deductible or not.

This is where an expert CPA comes in, and although "experts" are few and far between, just as good lawyers, and good doctors, and good real estate agents, etc., they are out there and the good ones are heads and tails above even the best "tax enthusiast."

My $0.02. Happy Hunting!

[Penguin]

Originally Posted by Armand

2009 MY already shows as qualified in the current version of Turbo Tax

The quick solution is to simply click on the 2009 box. You submit the tax return claiming a 2009 model and then one of two things happen:

(a) Nothing. The tax return goes through, you get the correct credit, and that's the end, or

(b) For some odd reason you are audited and you show the IRS it is a 2010 model, not a 2009. The IRS sees the credit is the same, no additional tax is owed, and that's the end of it. The IRS will not do anything about an error which results in no change of tax liability.

[X5dieselfan]

Turbotax updated the software overnight. Problem solved as they now allow for a 2010 option.

[jaaX3]

Originally Posted by X5dieselfan

Turbotax updated the software overnight. Problem solved as they now allow for a 2010 option.

Sweet, thanks!!! We used TT this year (again - 5 or so years in a row now, love it!) and we completed everything last week. We were just waiting on this update. Thanks for the heads up!