Today (April 17) is the deadline for filing federal income taxes. I actually finished my return 10 days early this year, devoting an entire Saturday to completing my federal and state tax returns. After eight hours in front of the computer, it was a relief to finally submit the e-filed returns.
In my Wealth Management course, we discuss the importance of understanding the impact of federal and state tax codes on investment income. So, it only seems fitting that I should heed my own advice. While I am not an income tax expert, I have always prepared my own tax returns.
I filled out my first federal tax return – a simple 1040EZ – as a junior in high school. Looking back on the 25 years since then, I realize not only how much my personal tax situation has evolved, but also how complex the individual tax code has become. Anyone who has ever tried to prepare a “simple” Schedule D will understand what I mean, and this form became even more complicated this year with new 1099 reporting rules for brokerage firms.
Even though I used TurboTax to prepare my return, the amount of time required to complete the necessary forms is several hours more than it took just a few years ago. I consider myself relatively educated on personal tax matters, but I no longer feel that I could prepare my return without the use of a tax preparation software. I suspect that I am not the only one.