DIY Taxes

For the last 3 years I have been doing my own taxes. This had saved me about $100 from software or $250-$300 in a tax service.  The benefit of this goes beyond the dollar savings. It's a way to make yourself learn the accountability of your income and tax liability.  In the spirit if becoming less dependent, doing your own taxes makes you understand why you have to the government what you pay them every year.

I had my first job when I was 14 years old and until my mid 20's, I had simply been completing tele-file and filling in the blanks for my tax return. At that time, I couldn't tell you the difference between adjusted gross income (AGI) and taxable income, not could I explain how they were calculated. Of course, that didn't matter to me until I was making more money and learned that I could deduct more than the standard deduction.  However, when I reached that point, I simply deferred to the "tax professionals."

While I claim to have always had a basic understanding of how taxes work I know there have been other I have encountered that really have no clue about this, I can recall people I telling me things like, "I kind-of feel bad getting a tax return since I never pay taxes and just get money from the government."  Completing your tax forms yourself educates you to understand how this system works.  It was an eye opener to actually see the tax brackets and how the system was designed, but I warn you, it can be upsetting.

I know this is debatable, but I believe the fear of letting better minds complete your taxes so you don't make a costly mistake only works to keep you ignorant.  It wasn't until I started completing my own taxes that I started making my own strategies to reduce my tax liability as much as possible and take advantage of every dollar of deductions and credits.  Learning this skill has made us a little more independent financially and has made us aware of the inequality and unfairness of the tax system to middle class families.  I will also say this, I didn't just one year stop using a tax service and start doing this on my own.  I actually used the first year to complete the forms myself then had it checked.  Plus, I went back to old tax records I had, got the forms from the internet for that tax year and completed the returns.  There was a learning curve to it, but it is definitely worth it.