Wednesday, January 9, 2008

Spending Money to Save Money

Its nearing the end of January which means W-9's are on their way and I'm starting to think about preparing my taxes.

2007 was the first year I've ever been eligible to contribute to a 401k account, which will complicate my taxes and make me uncertain. In the past my taxes have been pretty straight forward; W-9 + Bank Statement with Total Interest + Standard Deductions means complete in about 30 minutes. Now that I have the 401k complication, I've tried to investigate on my own how to impute this data into my return but if you've ever read the IRS info on 401k its about as clear as mud. If you'd asked me even two years ago if I'd pay someone to do my taxes I'd have said no way -- I was frugal and could do them on my own.

I used to think I was a frugal person but really I was just cheap. I'd buy the cheapest of any product I needed, I needed paper towels I'd buy the el cheapo brand, I need a pair of black pants and would also get the store brand that was on sale for 75%. Its only within the last couple of years that I've realized that I wasn't being frugal, I was cheap because it was taking me 5 paper towels to complete the same job that the bounty brand (or whatever you preferred brand is) and that those pants I thought I got a steal at for $20 only lasted about 2 wearings.

So this year I'm biting the bullet and spending the money to get my taxes completed, but at the same time I'll ensuring my return is correct and more importantly learning how to complete my taxes with these complications.

1 comment:

KevinRiggs said...

Professional tax preparers can enhance your return quite a lot. We've used the same preparer for several years and the results and peace of mind offset the minimal cost. Before you got to your tax preparer you might want to verify that he/she has prepared taxes from W-9's and not just "gotten training" on how to do this as the quality and experience of preparers can differ.


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