I’m Doing My Own Taxes This Year

Photo by Oli Dale on Unsplash.

You might remember that I met with a CPA in January to discuss my tax and business obligations in Iowa. I went into that meeting thinking that if this person felt like a good fit, I’d hire them to do my taxes… but, although they did answer all of my questions, I ended the meeting pretty sure that this person would not be a good fit for me long-term.

I thought I would set up a meeting with a different CPA, but then I heard a 99% Invisible podcast ad for TaxAct — and the entire pitch was about how TaxAct had designed its tax prep software to meet the needs of freelancers and small business owners.

Plus I’d get a discount if I used 99% Invisible’s offer code when I signed up.

So I decided to try TaxAct, figuring that if I didn’t like it, I’d still have plenty of time to find another CPA.

I love TaxAct. Coincidentally — and I did not know this before I signed up — it’s based in Cedar Rapids. I pass the office every evening on the way to Ragtime rehearsal, and part of me wants to show up in the lobby with an assortment of fancy popcorns and say “y’all are great, did you know you’re so great?” (I am not going to do this because I know it would be creepy and weird.)

But back to the actual tax prep. My Seattle CPA, whom I really liked, always sent over this tax worksheet for me to fill out: my 1099s, my business expenses, the estimated taxes I’d paid that year, interest, IRA contributions, ACA payments, etc. Then she’d use the information on the tax worksheet to do my taxes.

TaxAct essentially gave me the same tax worksheet. I filled in the numbers and the software did the math. It felt exactly like every other year’s tax prep process.

It’s important to note that I probably wouldn’t have had as much success with TaxAct if I hadn’t previously worked with various CPAs. I went in with the benefit of multiple years of in-person conversations about deductions, business expenses, and so on. If I were a brand-new freelancer using TaxAct, I might not know that I could deduct a percentage of my smartphone bill, or that I could count my new desk as a business expense.

But at this point I have five years of freelance tax experience, which made the TaxAct process very easy.

The only aspect of the TaxAct process that wasn’t intuitive was filling out my Iowa return as a part-year resident. I went through TaxAct’s step-by-step Iowa return worksheet, but when TaxAct told me I owed Iowa an additional $1,700 in taxes I was all “no I don’t, I only lived in the state for 32 days in 2017 AND I paid estimated taxes on those 32 days.” So I hopped on over to the Iowa Department of Revenue website and learned that I needed to file a Schedule IA 126 to get my taxes adjusted to match my 32 days of residency, and then I tabbed back to TaxAct and typed “IA 126” into the search box and found the appropriate forms.

In the end I’m going to get a very small refund from the state of Iowa and a very large refund from the federal government — yes, I finally overpaid my estimated taxes after several years of underpaying them. (Every year I pay estimated taxes based on the percentage of tax I paid on the prior year’s income, and my income dropped between 2016 and 2017, so… refund.)

I’ll give you all the numbers once I double-check everything and get it all filed, same as I did last year. With the 99% Invisible discounts included, I’ll pay $29.25 to file federal taxes, $27.25 to file state taxes, and $39 for TaxAct’s Audit Defense — which means that if I get audited, they’ll help me through the process and handle all communications with the IRS.

I am so glad I listened to that 99% Invisible episode.

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