At the age of 32, with our household income breaking the $100,000 (US) mark for 2007, I was finally convinced by family and friends to take our tax preparation to a specialist, a Certified Public Accountant (“CPA”). I was always wary of the idea, primarily because since I started filing taxes at age 16, I would usually get a refund of about $200 to $500. And from asking around, I learned that the average price for a CPA to do your taxes was around $250. My taxes were never more complicated than looking at my W-2s (most years there are multiple W-2s, but don’t worry, I’ve never really been fired), and copying numbers from the boxes on the paper into the boxes on the screen.
When we filed our taxes for 2006, now that we were married and filing jointly, things got a little more complicated. We both purchased hybrid cars that year and were expecting the associated tax credits to supply us with a big refund on the order of around $6,000, but the refund we saw was actually closer to $1,200. In 2007, we became homeowners for the first time, which, along with marriage, is also supposed to give you some credit around tax time.
My wife reads. She devours information like Robert Redford in Three Days of the Condor, and she generally surrounds herself with brilliant people. So when she once again floated the idea of using a CPA to help us with our taxes, especially given that the previous year didn’t work out like it was supposed to, I finally conceded. We picked a local independent CPA based on location, and the fact that his web site was usable, accessible, and provided an RSS feed. We’re geeks like that.
Before I went to see our CPA, I took our tax information and plugged it into TaxACT Online, which doesn’t charge you anything until you actually hit the “file taxes now” button, to see what the numbers would look like. I got the shock of my life when I saw that we were projected to owe the IRS over $6,000. This is roughly the same number of dollars I was expecting to see, but in refund form, not as a debt. We’re married! We bought a house last year! How can this possibly be?
Well, I’ll explain in an upcoming entry what I learned about W-4 forms and marriage, but suffice it to say that I was even less inclined to go see a CPA and pay him (in our case it’s a man) hundreds of dollars to tell us that we owe the IRS $6,000. But I’d made a commitment, and there was always a chance that maybe I transposed a number or two, or misunderstood some part of the tax code, and he could fix it.
To make a long story less long, he wasn’t able to fix it, ’cause nobody had really done anything wrong. What I did get from him, however, was two hours’ worth of really good advice. He took a genuine interest in our finances, aligned himself with our point of view about how life should be lived, and gave us specific tasks to do in 2008 that would make filing taxes next year as painless as possible.
I wrote everything down, of course, and will be sharing bits and pieces of his advice with you in the future as it comes up. But the end result is this, unless you’re single and renting, with no investments to speak of, I think it’s worth the cost to hire a professional to help you with your taxes. As of this writing, it’s still early March, and there’s plenty of time to find someone to help you prepare for next year. Just try Googling “certified public accountant [your zip code]” and poke around until you find someone trustworthy, preferably with a blog attached to their site.
My name is Smithee, and I’m an almost-total personal finance newbie. My wife and I bring in over $100,000 a year, and we have no savings at all. Just like Flexo when he started this site, we’re writing here in order to keep ourselves accountable, and to turn our lives around.
Published or updated March 6, 2008.