4 ms·

I don't get why there's an income cap though. There's nothing that gets more complicated on income alone, only if you add extra stuff to track

by 8note 2y ago

CamperBob2 2y ago
Anybody who makes more than about $200K-$300K/year is likely making a mistake if they don't have a CPA.
- Sohcahtoa82 2y ago
  What makes you say that? I'm assuming you're adding other assumptions. My wife and I combined make about $300K/year. We don't run a business, don't make charity contributions, only pay ~$5K in mortgage interest, and don't have kids. We don't even do retail stock investing (EDIT: And I haven't exercised any employer stock options), just a 401k, an IRA, and a 5.25% savings account. We take the standard deduction. I can't imagine a CPA would be able to find so many possible deductions that it would be worth itemizing.
  - brianwawok 2y ago
    Yup totally silly. My CPA wouldn’t even take you on as a client, he would say go to HR block if you don’t want to do it,
    - FireBeyond 2y ago
      Which is also silly. My experiences with HR Block was that they basically had their own version of a TurboTax-like thing, and all they were doing was literally asking you for the numbers for each question. There was zero critical thinking applied. I had just bought a house, just bought a hybrid, started working from home, and was new to the US. "What are you claiming?" "What can I claim from this?" "I'm not sure. But I can put these numbers in here and see what it says." You're literally paying for someone to type in the same numbers you would, with as much (or at times less) knowledge than you (who is also less invested than you in getting it right, but much more invested in selling their 'audit protection' stuff).
  - fooker 2y ago
    The IRS prays for citizens like you!
- dheera 2y ago
  I disagree. If there's a CPA who wants to give me money-back guarantee, be my guest. I do my taxes first. You (CPA) look over it, if can save me any additional money, I'll give you 1/2 of the additional money saved as your compensation. Deal?
  - cqqxo4zV46cp 2y ago
    Part of their fee is for you to not go through doing it yourself, so, no.
- m463 2y ago
  I kind of wonder if software engineers making this kind of money but no tax problems should be getting advice from folks who can look back and see what they should have done. (tax problems sometimes come from outlier behaviors that might be good)
- silisili 2y ago
  Yeah no. I thought I'd hire a CPA one year to see what 'breaks' they might offer. All they did was fill out Turbotax for me, and charge me an extra 150 for that.
- PopAlongKid 2y ago
  > if they don't have a CPA. There are alternatives to CPAs, who are licensed by individual states and don't necessarily specialize in taxes. Several states, including California, require testing and registration for paid tax preparers who aren't CPAs or Enrolled Agents. EAs are the only federally-licensed tax professionals with unlimited practice rights before the IRS. It's reasonable to assume that CPAs pass along the costs of their marketing and lobbying efforts to their clients, without any guarantee of higher quality compared to the other professionals available.
Sivart13 2y ago
In an effort to keep the scope manageable for the pilot year, the Direct File team chose to have an upper income limit so they would not have to support Form 8959: Additional Medicare Tax (https://www.irs.gov/pub/irs-pdf/i8959.pdf https://www.irs.gov/pub/irs-pdf/i8959.pdf) which only kicks in at that threshold. Though it's also very likely at these high incomes that you would be disqualified for other reasons (investment income etc)
- MarkSweep 2y ago
  8960 (net investment tax) is another form that only applies at 200k or more income.

I don't get why there's an income cap though. There's nothing that gets more complicated on income alone, only if you add extra stuff to track

by 8note 2y ago

I don't get why there's an income cap though. There's nothing that gets more complicated on income alone, only if you add extra stuff to track

CamperBob2 2y ago

Anybody who makes more than about $200K-$300K/year is likely making a mistake if they don't have a CPA.

Sohcahtoa82 2y ago
What makes you say that? I'm assuming you're adding other assumptions. My wife and I combined make about $300K/year. We don't run a business, don't make charity contributions, only pay ~$5K in mortgage interest, and don't have kids. We don't even do retail stock investing (EDIT: And I haven't exercised any employer stock options), just a 401k, an IRA, and a 5.25% savings account. We take the standard deduction. I can't imagine a CPA would be able to find so many possible deductions that it would be worth itemizing.
- brianwawok 2y ago
  Yup totally silly. My CPA wouldn’t even take you on as a client, he would say go to HR block if you don’t want to do it,
  - FireBeyond 2y ago
    Which is also silly. My experiences with HR Block was that they basically had their own version of a TurboTax-like thing, and all they were doing was literally asking you for the numbers for each question. There was zero critical thinking applied. I had just bought a house, just bought a hybrid, started working from home, and was new to the US. "What are you claiming?" "What can I claim from this?" "I'm not sure. But I can put these numbers in here and see what it says." You're literally paying for someone to type in the same numbers you would, with as much (or at times less) knowledge than you (who is also less invested than you in getting it right, but much more invested in selling their 'audit protection' stuff).
- fooker 2y ago
  The IRS prays for citizens like you!
dheera 2y ago
I disagree. If there's a CPA who wants to give me money-back guarantee, be my guest. I do my taxes first. You (CPA) look over it, if can save me any additional money, I'll give you 1/2 of the additional money saved as your compensation. Deal?
- cqqxo4zV46cp 2y ago
  Part of their fee is for you to not go through doing it yourself, so, no.
m463 2y ago
I kind of wonder if software engineers making this kind of money but no tax problems should be getting advice from folks who can look back and see what they should have done. (tax problems sometimes come from outlier behaviors that might be good)
silisili 2y ago
Yeah no. I thought I'd hire a CPA one year to see what 'breaks' they might offer. All they did was fill out Turbotax for me, and charge me an extra 150 for that.
PopAlongKid 2y ago
> if they don't have a CPA. There are alternatives to CPAs, who are licensed by individual states and don't necessarily specialize in taxes. Several states, including California, require testing and registration for paid tax preparers who aren't CPAs or Enrolled Agents. EAs are the only federally-licensed tax professionals with unlimited practice rights before the IRS. It's reasonable to assume that CPAs pass along the costs of their marketing and lobbying efforts to their clients, without any guarantee of higher quality compared to the other professionals available.

Sivart13 2y ago

In an effort to keep the scope manageable for the pilot year, the Direct File team chose to have an upper income limit so they would not have to support Form 8959: Additional Medicare Tax (https://www.irs.gov/pub/irs-pdf/i8959.pdf https://www.irs.gov/pub/irs-pdf/i8959.pdf) which only kicks in at that threshold. Though it's also very likely at these high incomes that you would be disqualified for other reasons (investment income etc)

MarkSweep 2y ago
8960 (net investment tax) is another form that only applies at 200k or more income.