Comment by atrettel
7 months ago
Regardless of what happens to Direct File, I recommend people learn how to do their tax returns by hand. I do it by hand every year. Yes, it is tedious, but I am not beholden to anyone and I don't need a "product" (paid or otherwise) to solve it for me. It takes me between 10 to 15 hours per year for both my federal and state tax returns. That is all. Once you get a hang of it, it is not that bad.
(I recognize that not everyone can do this, but if you have the technical skill to handle the math, I do still recommend it.)
10-15 hours? Turbo Tax usually costs me like $50 or so after discounts through my bank and I can nail out my taxes in under an hour with all it can auto-import in my situations. If it saves me 14 hours of labor its definitely worth $50 to me, and I'd say I'm massively overpaying compared to the free filing tools out there!
It shouldn't be this hard.
The cost of Turbo Tax is not the just what you pay for the service. The real cost is that they now have a very detailed financial picture of you and your family and they will market that to any willing buyer (I will never be convinced that they don't do this).
Their privacy policy directly states they don't sell user data.
https://ttlc.intuit.com/turbotax-support/en-us/help-article/...
But even then, assuming "they'll just sell it anyways", most of that information exists with other orgs anyways that could just as easily just sell it anyways. If I don't trust Intuit, why would I trust ADP or whoever my bank is to not sell my data either?
But sure, I agree, using any third party to file your taxes exposes you to that risk of yet another party potentially leaking/selling data. Once again though, to me that trade off of 14 more hours with my kids versus someone knowing what I paid in mortgage interest last year is pretty OK to me. Data brokers could just glean that same kind of useful information it means through the thousands of other things tracking me anyways.
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I regret to inform you that your bank, credit card company and every other financial institution you use is already selling it off in real time... it's how they make credit reports :(
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I guess enough time has passed.
I used to work in Intuit's Security R&D business unit and worked on the software that made it so that even if someone at Intuit/Turbo Tax wanted to do that it'd be impossible. Intuit spends a lot of money on cryptographers and very skilled programmers to ensure that. The definition of PII extends all the way to the HTTP logs of filers such that we couldn't even visualize filings on a map as they came in during tax season.
There's plenty of things that Intuit does that aren't good without alleging baseless claims.
your bank, credit card, even local supermarket...etc. already have your info. its 2025. there's really nowhere to hide.
This is one of the big reasons I keep doing it manually. Only the IRS and my state gets my info.
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What is the cost of that to me?
The cost of giving money to Intuit is that they then give it to politicians to create a more convoluted tax return so that you are further locked into giving Intuit money every year.
I realize you're just repeating frequently reported information, and Intuit has indeed lobbied against the IRS creating a free competitor to their product. But Intuit has not lobbied to make taxes more complicated. Congress does that well enough on its own. If you reread the original ProPublica piece that kicked off all the Intuit-hate 6 years ago, you'll see they imply it but carefully don't actually say it or back it up; others quoting the article were less careful.
If you can get through turbotax in under an hour (and are able to use their $50 version!) you probably can do it by hand in under two. Hint: If nothing changed year-to-year, just look at last year’s tax return. It is probably a 1040-EZ, and all you have to do is copy this year’s numbers from whatever documents turbotax copied them from last year. Then, read the directions for the form and do the arithmetic.
At some point in a few years, this will stop working, and you’ll probably overpay by thousands.
Anyway, it took me well over three hours to use turbotax this year, which is faster than most. An hour of that was reverse-engineering their calculation error which made my refund too high, and certainly would have triggered a sternly worded demand for more money and a fine (or worse) from the IRS. I know this because they made another error a few years ago, and it cost me 16 hours on hold with the IRS and thousands of dollars.
Having said that, I’d have overpaid a few thousand this year and spent at least 8 hours doing it by hand.
On the bright side, if Trump succeeds in burning the federal government down, maybe a simpler tax code (like the rest of the first world has) will emerge from the ashes of the IRS. If not, then he won’t be president any more.
So, at least it’s not 100% bad.
Edit: I just noticed you’re using auto-import! If that’s saving you time, you’re making a big mistake. Intuit doesn’t reliably save all the documents you’ll need when the IRS sends you a nasty letter. Go manually download as many of them as you can, and file them for 7 years.
1040-EZ was discontinued in 2018. You just fill out 1040 now and leave lines blank. If you only have W2 income and don't make too much, it is really easy. You just fill out lines 1a, 12, 25a and the IRS will figure the rest (you can calculate the intermediate numbers if you want to, but they will do it for you).
However, knowing it's that easy requires reading a lot of instructions, and if you make enough money (depending on filing status), it suddenly gets much more complicated (forms 8959, 8960, 6251 have income triggers), and if you have 1099s (INT or DIV) you might need to file Schedule B and form 8995. And if you have a mortgage, you should do your taxes twice to see if itemizing with Schedule A is better. And god forbid you sold anything and have to do Schedule D and forms 8949.
I do not understand you guys, I do not care about my taxes. They are fairly complex by Swedish Standards because I deliberately loose money In some area that gives me tax cuts, but not overly so.
Every year I get a digital form to sign from the tax office, I pay residual taxes and send it in all digital. This takes me in totalt 20 minutes including everything. Everything is prepared for me all I have to do is check if everything is correct. I can not fathom even copying those numbers correctly from diffrent sources in under an hour.
I do not want to do my taxes. I just want to be informed so I can double check and pay them.
Spending an hour doing taxes seems crazy ineffective .
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> Turbo Tax usually costs me like $50
You may not have Rental income and Stocks to report
If paying for TurboTax works for you, that's great. If you find it worth the money, that's great. It's just not worth it for me and wanted to tell people there is another way.
I never said it is hard. Slow and tedious, but not hard. I take my time. I probably could speed it up, but I usually listen to music while I do it and try not to stress myself out about it.
This is equivalent to compiling every package from source for your Linux install. You don't end up learning too many useful things, all you've done is a very repetitive tedious task that doesn't give you much financial return.
Well, I've previously used Gentoo, so I don't view that as scary to be honest.
Gentoo automates the repetitive tedious task, you just have to wait a while.
The description above is Linux From Scratch, not Gentoo :-)
Yep. Might be worth doing once. But not twice.
I second this. Although I only hand filed for two years and then transitioned to FreeTaxUSA. The benefit is that after going through their wizard/interface, I can confidently check the generated IRS forms to make sure it’s filled to my intent.
big thumbs up to freetaxusa
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It's easy if you just have W2 income.
If you have multiple brokerage accounts, RSUs from an employer or two, maybe some consulting income, etc, it's annoying and tedious.
And if you have a business, doing it by hand basically means you'll overpay by a good extent.
My Australian tax return takes me about 20 minutes.
The system prefills 99% of the details that they've obtained from my employer, bank, health insurer, stock broker etc directly. All I need to do is fill out my deductions from a running spreadsheet I've maintained throughout the year.
My greatest pet peeve in life is when people make ME work to pay THEM money. I don’t understand why the gov can’t just tell me how much I owe and I pay.
You'll first need to give them access to all your private financial transactions. I'm a fan of the 5th amendment.
They already have access to your employer, Bank, and brokerage accounts. I would guess that covers most of what they need for most people anyway.
It took me 58 minutes to do my not that simple taxes (both state and federal) using Turbo Tax. The cost was about $200. Based on your time estimate, it saved me 1-2 work days of time. That seems like a good bargain to me.
What I don't like with Intuit is the sleazy ways they try to upsell you and to trick you into allowing them to use your financial information for non-tax purposes.
Mine took the same time and only cost $15 because my state charges. Freetaxusa. I could have done it for free if I mailed my state, but whatever. My taxes are also well above what's average(personal plus 2 biz).
TurboTax is a rip off. There are dozens of free websites that do the same thing: ask you a handful of questions and fill out a spreadsheet/form.
$200 is mind bogglingly expensive for doing it yourself. TurboTax does nothing that dozens of other FREE services don't also do. It's just a few questions.
What sounds better to me is spending 58 minutes and $0. Seems like a better bargain.
Would love to read a blog post on this. 10 - 15 hours is probably too much but I bet if I learned how to do it I could figure out how to optimize it with all the tools that are available today. Would love if TurboTax just died because everyone figured out they could do taxes on their own with just a little supplemental help from local models or something similar.
If you just have W2 income and take the standard deduction, taxes are really quite simple to do on paper. It's a two page form, most of which you leave blank.
If you have self-employment income, business income, capital gains, 401k distributions, HSAs, 529 plans, etc. it can get complicated but at that point TurboTax honestly doesn't help all that much (unless it's gotten a lot better since I last used it). If you get to the point that your taxes are too complicated to do by hand you probably need an accountant anyway.
> at that point TurboTax honestly doesn't help all that much
It does. I have most the things you have mentioned and it was automated, except for correcting a small situation their OCR messed up by reading an extra blank space from the form.
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10-15 hours is NUTS. I do mine by hand every year and I can get them done in about 3 hours. I would say my taxes are nontrivial thought certainly not super complicated (no K1s)
I don't think I'll make a blog post about this, but since you asked I will describe what you have to do briefly. 10 to 15 hours includes everything:
- Downloading all forms and instructions.
- Downloading all 1099s and W-2 statements.
- Scanning any paper 1099 or W-2 forms I receive (rare now, thankfully).
- Filling out a draft of the forms slowly in pencil. This takes the most time. I have sometimes used spreadsheets for this but I find it is quicker to just use a calculator or even the Python REPL.
- Filling out a "hard copy" of the forms and double checking my math. This takes more time than you think if your state don't have fillable forms, but I have sometimes done it by hand very neatly rather than typing it up.
- And finally going to the post office to mail things. I never just put them in my mailbox.
2024 only took 11 hours in total mostly over 2 weekends. And as I have said in other posts here, I don't stress myself out about and take my time. You can probably do it faster if you want to.
The key is to just read the instructions for each form and follow them mindlessly and mechanically. I will admit that it is difficult at first, but you do get used to it, and despite my tax returns getting much more complicated over the years, the number of hours that I take has stayed the same.
You can do all this in an hour on a computer without mailing anything.
Freetaxusa is the simplest way but really there are a ton of options that're free.
How do you stay on top of the ever-changing deductions and exemptions? Some of the loopholes are really good if you know them.
I used to use TurboTax but then compare the pdf it generated line-by-line to the pdf from the previous year, and caught things I'd missed fairly often. One year though I was having trouble finding where in the UI the field I needed to set was, and concluded that the whole process was stupid. I then switched to just filling out the forms directly using my previous year's as a guide, and found that it just didn't really take any longer. This year I spent about an hour on my taxes with W2 income, RSUs (with an incorrect cost basis), ESPP trades, dividend/interest income from four different brokerages, and some stock trades to report.
I do think TurboTax or a competitor makes sense when you have a novel-to-you tax situation to deal with. Probably the hardest part of filing taxes is just figuring out which of the supplemental forms are applicable to you. I absolutely would have missed the foreign tax paid one on my own, for example. When your tax situation is the same as the last year just with different numbers I don't see much of a point.
i did it by hand till 15 years ago. created a spreadsheet, with only the items I needed.
the next year, pretty much the same spreadsheet with whatever minor tax changes had been made for that year.
the 15 hours is mostly spent getting your shit together which you have to do for an online solution too.
I did a better job than my accountants do, they often forget little details that I would keep track of. ("no, I did not owe a penalty, the estimated payments and refund carried forward meant there was enough money on my tab...")
I do my (Canadian) taxes by hand also, but not exactly.
I calculate all the fields using my homebrew software. All calculations are done there.
The software produces a report which is organized by form and field. I can go through it and just put the indicated values into the right forms.
The forms are fillable PDFs. I copy and paste most of the values.
The last few years, I had perfect results; no correction came back from the Canada Revenue Agency.
This year, that d1ckhead Justin Trudeau left us with a surprise; complications to the Canada Pension Plan. Something like a 40% of all the line items in my tax calculation are from the new CPP schedule 5. It has multiple brackets now. I had to redo that section of my system (redefine the model). That is tedious. Anything same as last year is a breeze.
I had to model a whole new form this year since I worked for two employers and overpaid EI (employment insurance). The common forms handle CPP overpayment. For EI overpayment there is no "heads up" in the workflow at all. Since there is a deduction for EI payments, you have to do it right; you can easily screw up and naively calculate and claim the overpayment, while keeping the deduction calculated from the the overpaid amount.
Anyway, when I used to work with just pen and calculator, it took me about, oh, a bit over an hour or so. 10 to 15 hours seems crazy for personal tax. Is this for a moderately complicated corporation, where you're saving money by not hiring an accountant?
There is an old russian tv series called Kitchen where the mc starts his job by stripping the labels from bananas. On the question "what is the sense of that", he gets the answer "for balance in the universe - somewhere there, there is someone else putting the labels on the bananas".
Spending 15 hours on filling data that the government mostly knows and can calculate is exactly one of those balancing acts of the universe that nobody needs.
I have the technical skill to handle the math, but there is no way that I'm spending fifteen hours to do my taxes when there's a free-to-low-cost thing readily available that will do a similar or better job in like 45 minutes.
I used CashApp taxes this year, and I liked it. It was actually free and it didn't do any upsell in the process.
Your mileage may vary. I did taxes by hand for a few years, probably 20+ hours each year, every hour stressful.
For example, at some point, I'm fatigued and surprised how much work it was thus far, but I think I can see the finish line on the horizon, but then one line in a form triggers a cascade of additional schedules and many more hours.
Then, finally, the federal forms are done, and it's a stack... And the state forms are somehow not just a 1-pager of quickly copying key numbers from federal 1040, but seem (subjectively) to more than double the work, and produce a second stack.
The last 2 tax years, I decided it was a really unhealthy amount of stress, so I've bought TurboTax Home & Business. I run it in a KVM instance that gets airgapped, on principle, so my data doesn't get sent to corporate surveillance capitalism HQ.
Though I don't assume that TurboTax in airgapped VM will keep working every year. But, hopefully, before they inevitably break it some year, and I'd have to do taxes by hand again, I will be killed by a crocodile.
> TurboTax in airgapped VM
Just use their website, pick your battles.
The government is going to use software to process your stuff anyway, and whatever contractor makes that software will sell it to TurboTax.
10-15 hours is insane. What are you doing?
I do my personal, my 2 LLCs in under 2 hours. I also do my roommates W2 which takes 10 minutes. The whole thing costs like $35.
Seriously, how does it take you 10+ hours? I do not understand at all. Lol
Maybe I'm just out of touch because I haven't done taxes by hand for years, but 10 to 15 hours? After I read your first sentence, I seriously expected you to say 2-3 hours.
I don't doubt that it really takes that long for you. I just think it's ridiculous that anyone should spend that amount of time on something that should be a lot more simple, streamlined, and efficient.
Excellent advertisement for turbo tax. Luckily there's lots of more normal replies to this.
Do you have a more complicated return eg other income, investments, etc or is this the average of how long it takes?
That’s insane.
I'm not OP, but if you are a reasonably high-earning professional common on this site, you trigger a ton of stuff. I used to take about that long to do mine, although I've gotten much faster. In a normal year, I typically file forms 1040, Schedule A, Schedule B, Schedule D, Schedule 2, 6251, 8606, 8949, 8959, 8960, 8995 + state versions of some of those. I'm also married, so I calculate all permutations of joint/separate with itemized/non-itemized, which also requires you to actually figure your taxes instead of leaving it blank and letting the IRS do it.
It gets really complicated very quickly, but if you are single, have less income, and it's only from wages, it's much simpler.
Yes, you are right. In hindsight, what I viewed as "complicated" is not what everyone else views as complicated. Because I do this manually, I am much more aware of all of the different forms and roughly when to use them than most other people, so I don't view my taxes as particular complicated because I can see situations where they can get insanely more complicated. I filed more than just form 1040 with the IRS this year if anyone is curious.
As to the permutations aspect, this does take a lot of time but it can net a lot of savings. One thing that I would add is that you do have the choice to round to the cent or the whole dollar (at least with the IRS), but generally I have never found that to make any substantial difference, so I just round to whole dollars at this point and don't waste my time trying to optimize that.
I don't have a particularly complicated return, to be honest. I just take my time and don't stress myself out about it. The time includes everything, not just the time I spent putting in numbers.
You may find it insane, but I'm OK with it. I'm not going to knock somebody for doing something different, but I do think it is important to know how to do it yourself when push comes to shove.
Free tax programs are what allow taxes to become so complex that you need a program (or paid CPA) to help fill them out. I refuse to have to get a program to fill them out.
A big benefit of filling out yourself is knowing how to minimize the tax burden. Using a program or CPA you never really understand how tax is calculated and the tax consequences of various financial choices you make throughout the year.
I do the same thing. There's a free spreadsheet that is a great help, you can search for it.
The government should just write its tax law as a spreadsheet.
Why? Why do you recommend it? What does one gain by doing it themselves?
I file my own too, but we live in 2025 though. We deserve some civility
I recommend this, as well, especially if you have repetitive taxes.
I spend just a few hours doing taxes by hand when it's are similar to the previous year. With an accountant, I have to spend a bunch of time getting things ready, anyway. I only pay them when something weird happens.
Also, fuck Intuit.