Anxiety over USA taxes! How to conquer?
January 1, 2020 3:11 PM Subscribe
It's 2020, and I have chronic anxiety around my taxes. How to conquer this so that I can do my own taxes this year? Alternatively, validate that yes, I should continue to send them to an EA to do for me? Is there a way I can do a 'dry run' on my last year's taxes, without paying and submitting them, like 'practice taxes', to get used to the process again?
I've had Generalized Anxiety for decades now, ever since I was a kid. I used to do my own taxes every year, without issue, until 15 years ago - with an investment account (stocks from an old job) in the mix + a new court settlement payout, they all of a sudden went from 'I can handle this with a thermos of coffee and patience' to 'oh holy crap I can't deal at all'. So, I found a good EA, and have been sending my taxes to him ever since. A lot of my anxiety is around financial issues.
My anxiety isn't around owing money - I expect to - but in approaching the process in the first place. But my anxiety? With a new medication, it's a lot better!
With a changeup in my medication, namely an SSRI, my anxiety has basically reduced to nil, and I've been able to get progress on a lot of issues that were too daunting for me in the past - like checking my credit score, actually managing my savings, working as a 1099 freelancer, etc. I'm making progress, and I feel I can handle my taxes on my own now - but I'd like guidance first.
My stats:
No house or property, no dependents, no partners.
Money: Savings, checking, a small investment account with stocks I never cashed out.
Income for 2019: 1/2 of the year, I had a regular W-2 job with 0 deductions. The second half, I had a combo of Unemployment (I had 10% taken out for taxes from each check), and 1099 work (I've been putting 25% of my money from that into a seperate savings account, for taxes). I totally expect to owe money, and am prepared to pay that if need be. I don't have an LLC, just an individual. I maybe made $2,000 as a 1099 contractor last year.
HI: I've had health insurance for all 12 months, though I think that's moot now.
Name: I'm Transgender, and I did have a legal name change in Dec 2018. All of my state and federal stuff is changed over, but I didn't get a new SSN. My W-2/W-4 is going to be issued under my dead name, but my UI and I-9 info will be under my new name.
Note: I'm in the USA, a US citizen, and am a resident of the State of Washington. This is for Federal Taxes for 2019. I've been living and worked in WA State all year last year.
I don't think my taxes are complex enough to warrant paying an EA $400 a year to do them just to alleviate my anxiety, but I may be completely wrong.
Thank you!
I've had Generalized Anxiety for decades now, ever since I was a kid. I used to do my own taxes every year, without issue, until 15 years ago - with an investment account (stocks from an old job) in the mix + a new court settlement payout, they all of a sudden went from 'I can handle this with a thermos of coffee and patience' to 'oh holy crap I can't deal at all'. So, I found a good EA, and have been sending my taxes to him ever since. A lot of my anxiety is around financial issues.
My anxiety isn't around owing money - I expect to - but in approaching the process in the first place. But my anxiety? With a new medication, it's a lot better!
With a changeup in my medication, namely an SSRI, my anxiety has basically reduced to nil, and I've been able to get progress on a lot of issues that were too daunting for me in the past - like checking my credit score, actually managing my savings, working as a 1099 freelancer, etc. I'm making progress, and I feel I can handle my taxes on my own now - but I'd like guidance first.
My stats:
No house or property, no dependents, no partners.
Money: Savings, checking, a small investment account with stocks I never cashed out.
Income for 2019: 1/2 of the year, I had a regular W-2 job with 0 deductions. The second half, I had a combo of Unemployment (I had 10% taken out for taxes from each check), and 1099 work (I've been putting 25% of my money from that into a seperate savings account, for taxes). I totally expect to owe money, and am prepared to pay that if need be. I don't have an LLC, just an individual. I maybe made $2,000 as a 1099 contractor last year.
HI: I've had health insurance for all 12 months, though I think that's moot now.
Name: I'm Transgender, and I did have a legal name change in Dec 2018. All of my state and federal stuff is changed over, but I didn't get a new SSN. My W-2/W-4 is going to be issued under my dead name, but my UI and I-9 info will be under my new name.
Note: I'm in the USA, a US citizen, and am a resident of the State of Washington. This is for Federal Taxes for 2019. I've been living and worked in WA State all year last year.
I don't think my taxes are complex enough to warrant paying an EA $400 a year to do them just to alleviate my anxiety, but I may be completely wrong.
Thank you!
Why don’t you look at your previous year’s return in conjunction with your records and see if it makes sense to you? It will actually be easier than that if you’re using tax prep software but it may give you the underlying confidence you’re seeking.
posted by praemunire at 3:17 PM on January 1, 2020
posted by praemunire at 3:17 PM on January 1, 2020
Best answer: You can totally do a trial run! I usually do my taxes with two of the online services (e.g. TurboTax and TaxAct) to make sure they come out the same. You don’t get charged until you submit. You could even do a trial run yourself and use your tax preparer fir the official submission this year.
Also even if you screw up, it’s going to be OK! You can submit an amended return if you need to. The IRS will work with you.
posted by mskyle at 3:18 PM on January 1, 2020 [1 favorite]
Also even if you screw up, it’s going to be OK! You can submit an amended return if you need to. The IRS will work with you.
posted by mskyle at 3:18 PM on January 1, 2020 [1 favorite]
Also even if you screw up, it’s going to be OK! You can submit an amended return if you need to. The IRS will work with you.
Just wanted to second this. I messed something up one year, and all that happened was I got was a letter that said "uh, actually you owe us $X more, plus some tiny amount of interest on that unpaid amount!"
posted by Blue Jello Elf at 3:45 PM on January 1, 2020 [3 favorites]
Just wanted to second this. I messed something up one year, and all that happened was I got was a letter that said "uh, actually you owe us $X more, plus some tiny amount of interest on that unpaid amount!"
posted by Blue Jello Elf at 3:45 PM on January 1, 2020 [3 favorites]
Best answer: You do not have to pay to calculate your taxes and file online. IRS Free File is a program that uses online filing. You can estimate your taxes using TurboTax or TaxAct to see how things stack up, and then FreeFile online to avoid their fees.
Because they are in bed with the tax software companies, the IRS and the companies go to great lengths for you to not know about this.
So - try it using one of these platforms. If it doesn't feel right, or you think it's going to be too hard, then you can still go to your accountant. Chances are you will be fine. Also, you could probably find a cheaper accountant since your taxes are so simple. LAst year I did my own but had an accountant just check them for me - charged $100 to check them.
posted by Miko at 3:45 PM on January 1, 2020 [11 favorites]
Because they are in bed with the tax software companies, the IRS and the companies go to great lengths for you to not know about this.
So - try it using one of these platforms. If it doesn't feel right, or you think it's going to be too hard, then you can still go to your accountant. Chances are you will be fine. Also, you could probably find a cheaper accountant since your taxes are so simple. LAst year I did my own but had an accountant just check them for me - charged $100 to check them.
posted by Miko at 3:45 PM on January 1, 2020 [11 favorites]
Best answer: If your income was below $69k this year, you can file your federal taxes for free with online tax prep software from H&R Block, TurboTax, etc. There is literally no cost to create an account and give it a shot!
posted by yeahlikethat at 3:48 PM on January 1, 2020 [3 favorites]
posted by yeahlikethat at 3:48 PM on January 1, 2020 [3 favorites]
We often do trial runs, including "what if" runs if we're thinking about changing something in the future, with the big software services, without submitting. Not an issue at all.
If you want someone else to do it, though, that's also fine! Make life less stressful for yourself in whatever ways work.
(Also: there are very few serious tax disasters to even accidentally generate if you are generally a working-type person not taking dramatic itemizations and not involved in shady money-laundering schemes. It is *incredibly* hard to accidentally commit financial crimes. The IRS is actually really forgiving of mistakes as long as you're playing along in fairly good faith, because they are aware of how incredibly overcomplicated the system is for regular people. I think a lot of people turn the IRS into a boogeyman similar to The Library Police and Your Permanent Record, where any sort of error makes you a terrible person who shouldn't be allowed to show their face in society. I have had so many misfortunes - employer paperwork fuckup, the surprise! of IRS withholding tables running about two years behind your salary history so if you take a big jump you end up owing money and call them in a panic and they're like 'okay, stop crying, here's how payment plans work', weird behavior associated with tiny amounts of stocks that means re-doing everything - and it's all fine, it's all resolvable. You will be okay. Just don't get involved with organized crime.)
posted by Lyn Never at 5:27 PM on January 1, 2020 [2 favorites]
If you want someone else to do it, though, that's also fine! Make life less stressful for yourself in whatever ways work.
(Also: there are very few serious tax disasters to even accidentally generate if you are generally a working-type person not taking dramatic itemizations and not involved in shady money-laundering schemes. It is *incredibly* hard to accidentally commit financial crimes. The IRS is actually really forgiving of mistakes as long as you're playing along in fairly good faith, because they are aware of how incredibly overcomplicated the system is for regular people. I think a lot of people turn the IRS into a boogeyman similar to The Library Police and Your Permanent Record, where any sort of error makes you a terrible person who shouldn't be allowed to show their face in society. I have had so many misfortunes - employer paperwork fuckup, the surprise! of IRS withholding tables running about two years behind your salary history so if you take a big jump you end up owing money and call them in a panic and they're like 'okay, stop crying, here's how payment plans work', weird behavior associated with tiny amounts of stocks that means re-doing everything - and it's all fine, it's all resolvable. You will be okay. Just don't get involved with organized crime.)
posted by Lyn Never at 5:27 PM on January 1, 2020 [2 favorites]
Mixed names should not be an issue--it's all done by SSN. I am trans, but my name change happened to be timed such that I only had one name on my taxes. However, people do things all the time like change their names in March and file taxes in April. I have completely and utterly misspelled my name on my state taxes. I called and they said it was only a problem if I'd requested my refund by check. I'm pretty sure my brother has filed federal taxes with a W-2 with his name misspelled.
posted by hoyland at 6:03 PM on January 1, 2020 [1 favorite]
posted by hoyland at 6:03 PM on January 1, 2020 [1 favorite]
I have had lots of anxiety about taxes, but filed online and it was great. I did 4 years of simple taxes with refunds.
posted by theora55 at 8:11 PM on January 1, 2020
posted by theora55 at 8:11 PM on January 1, 2020
Your name change should be addressed with Social SecurityAdministration. You will get a name change as soon as you submit the properly filed and approved name change request with your local courts. You keep the same ssn. You will need to do this before filing taxes to prevent an identity theft marker showing up when you go to file. You can call 800-829-1040 and speak to IRS customer service rep regarding your account. If you did owe last year but paid in full you should have no problems going forward. If you need reassurance H&R block does Free Federal Filing online and with the exception of the name change I think your case is pretty simple
posted by The_imp_inimpossible at 9:09 PM on January 1, 2020 [1 favorite]
posted by The_imp_inimpossible at 9:09 PM on January 1, 2020 [1 favorite]
Because they are in bed with the tax software companies, the IRS and the companies go to great lengths for you to not know about this
What gives this impression ? This is propaganda and couldnt be further from truth. There are dozens of places IRS advertises where taxpayers can file federal taxes for free and how to get started .
posted by The_imp_inimpossible at 9:15 PM on January 1, 2020
What gives this impression ? This is propaganda and couldnt be further from truth. There are dozens of places IRS advertises where taxpayers can file federal taxes for free and how to get started .
posted by The_imp_inimpossible at 9:15 PM on January 1, 2020
This is propaganda
It's not. I provided a link similar to the praemunire offers before the hall monitors got to it. You may also enjoy this episode of Reply All, which chronicles the ProPublica effort.
posted by Miko at 5:10 AM on January 2, 2020 [3 favorites]
It's not. I provided a link similar to the praemunire offers before the hall monitors got to it. You may also enjoy this episode of Reply All, which chronicles the ProPublica effort.
posted by Miko at 5:10 AM on January 2, 2020 [3 favorites]
I had also added: you don't have to choose one or the other. Try filing yourself, see if it's overly difficult or confusing. If it is, you can still go to the accountant. If not, just file online. I was also going to add that $400 sounds like too much for your level of taxes, and you may want to shop around. Last year I did my own but had an accountant check them before filing. She just looked over my tax forms, did not go through receipts or bank statements or anything, and charged $100 just for a review. That's an option too.
posted by Miko at 5:12 AM on January 2, 2020 [2 favorites]
posted by Miko at 5:12 AM on January 2, 2020 [2 favorites]
One note on the IRS Free File page - one of the options is "Free File Fillable Forms", which is a set of browser-based fillable pdf's; basically the most common tax forms on your screen instead of on paper. I have used this myself for years with a combination of W2 & 1099 income, plus a couple of years with some more complicated income situations.
While there are some limitations, it is completely free, no hidden fees or upselling, you can save forms & come back to them later to edit or start over. It does the basic math for you, and you can review all your forms either online or print them out before sending them. Nothing is sent to the IRS without you specifically going through a deliberate process of telling the system to file with the IRS. As long as you haven't done that last step, you can abandon your forms and file another way, you can print out your forms before filing if you want someone else to look them over. If you want to give doing your own taxes a whack, this might be a good way to do that with little pressure.
posted by soundguy99 at 6:18 AM on January 2, 2020 [1 favorite]
While there are some limitations, it is completely free, no hidden fees or upselling, you can save forms & come back to them later to edit or start over. It does the basic math for you, and you can review all your forms either online or print them out before sending them. Nothing is sent to the IRS without you specifically going through a deliberate process of telling the system to file with the IRS. As long as you haven't done that last step, you can abandon your forms and file another way, you can print out your forms before filing if you want someone else to look them over. If you want to give doing your own taxes a whack, this might be a good way to do that with little pressure.
posted by soundguy99 at 6:18 AM on January 2, 2020 [1 favorite]
Response by poster: Thank you for all of the advice!
Because my situation is weird (some self-employment), and I prefer the help, I decided to splurge on the Turbo Tax Deluxe. Which, at $40 and change is 1/10th the price I paid last year.
I'm also finding that in doing my taxes this time? I'm actually kind of fascinated by the process. I'm really glad that I'm conquering one of these last anxiety hurdles for myself, and learning more about finances in the process.
posted by spinifex23 at 12:33 AM on February 20, 2020 [1 favorite]
Because my situation is weird (some self-employment), and I prefer the help, I decided to splurge on the Turbo Tax Deluxe. Which, at $40 and change is 1/10th the price I paid last year.
I'm also finding that in doing my taxes this time? I'm actually kind of fascinated by the process. I'm really glad that I'm conquering one of these last anxiety hurdles for myself, and learning more about finances in the process.
posted by spinifex23 at 12:33 AM on February 20, 2020 [1 favorite]
Response by poster: HOLY SHIT THEY ARE DONE. THEY ARE EFILED AND I AM GETTING A FAT REFUND. MONTHS EARLIER THAN I NORMALLY WOULD.
These things helped me through it:
1. Caffeine
2. The constant ticker on the top that shows you how much you'll get back/owe, and it changes on what you enter in.
3. The realization that - in the past decade? Parents died, moved three times, went back to school and got a new certificate, changed careers, changed *genders*, and I've gone toe to toe against both cops and Fascists. I can prepare the headspace to file my own taxes.
4. You haven't done anything permanent until the very last step. If, at any point, it does get overwhelming, I can walk away from it for a bit, take a break from it, or if I just cannot deal at all? Pull the rip cord and get them done professionally, like previous years.
But - barring any sort of huge change in my life, I'll carry on using TurboTax from now on. Thank you all for walking me through it.
posted by spinifex23 at 2:00 PM on February 20, 2020 [4 favorites]
These things helped me through it:
1. Caffeine
2. The constant ticker on the top that shows you how much you'll get back/owe, and it changes on what you enter in.
3. The realization that - in the past decade? Parents died, moved three times, went back to school and got a new certificate, changed careers, changed *genders*, and I've gone toe to toe against both cops and Fascists. I can prepare the headspace to file my own taxes.
4. You haven't done anything permanent until the very last step. If, at any point, it does get overwhelming, I can walk away from it for a bit, take a break from it, or if I just cannot deal at all? Pull the rip cord and get them done professionally, like previous years.
But - barring any sort of huge change in my life, I'll carry on using TurboTax from now on. Thank you all for walking me through it.
posted by spinifex23 at 2:00 PM on February 20, 2020 [4 favorites]
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Most online filing sites don't charge you until you file, but I don't think they let you see the filled-out forms themselves without paying. You could also look at your forms from last year and see how complicated they seem.
posted by Huffy Puffy at 3:15 PM on January 1, 2020