Maybe I Can’t Do My Own Taxes This Year
Or ever again?
You might remember that, earlier this year, I cited a BloombergBusiness article stating that “half of all self-prepared individual tax returns contain at least one error, compared to 60 percent of returns completed by a paid preparer.”
If that’s true, I thought aloud, should we all just do our own taxes?
This weekend, after organizing all of my income and deductions into an extremely satisfying color-coded chart, I decided to test my own hypothesis.
Here’s my scientific answer: I can no longer do my own taxes.
I logged into one of the more popular online tax prep services and found myself almost immediately unable to come up with answers to their Schedule C questions. Part of the problem is that the Schedule C is structured towards people who run what you might think of as a business, with inventory and employees and a storefront and so on. Not towards all of us freelancers doing work-for-hire.
So, although I was reasonably sure that most of the questions this tax prep service was asking didn’t apply to me, I wasn’t sure enough.
When I pulled up an actual Schedule C and compared it to the questions this tax prep service was asking, I thought “wow, this form is significantly less confusing than the online tax prep service.” (When an online tax service is more complicated than an IRS form, that’s saying something.) With a bit of grit and a lot of cross-referencing, I probably could have made it through the Schedule C.
But I still had too many questions, when it came down to it. If a convention invites me to speak as a featured guest and offers to reimburse me for my expenses, do I track the expenses as a deduction and the reimbursement as income? If a popular freelance writing site asks me to help promote a product and I earn affiliate income from that promotion, is that… I mean, I only ended up earning $50 in the end, and it wasn’t writing income and I didn’t get a 1099, so is it taxable?
I can’t do my own taxes. Not this year. Maybe never again, depending on how my career goes.
I can, however, send my CPA all of my color-coded charts along with an enormous list of questions and hope it all works out.
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