Hey everyone, it’s Finance Fridays again. Today is just a short post to remind myself that I am meeting my CPA to do my 2019 Taxes this Tax Weekend.
I’ll need to get all that necessary information together for the meeting. In general, not too much happened tax wise for 2019. Just the normal maxing of 401ks (TSP), Backdoor Roth IRA, and Mortgage Interest Deduction.
For me, my Health Savings Account and Dependent Care Account stuff are taken care of through the federal government directly.
Like I’ve said before in my 2018 Taxes post, I like to be within a reasonable range for my taxes. Usually I try to be a little conservative and err more on the refund side. However, as I said before $5000 swing one way or the other is easily accounted for in my Emergency Fund.
I expect this year to be more of the same. That said, I still need to put together all the information and get it to my CPA.
Why a CPA?
I know some people don’t like using a CPA because they think it costs “too much” and they can “do it themselves”. However, for me, I prefer the peace of mind just in case I were to ever get audited that I have someone on my side to help me get it taken care of. It’s not even about the money, it’s about the huge loss of time on my side having to deal with an audit. My time is very valuable to me, and the risk of an audit is not zero, and not even necessarily low.
According to nolo.com, in 2018, if you made between $1 and $1 million, your audit risk is between 0.5% and 1%. Being doctors, I think we know more than anyone that a 0.5% or 1% chance isn’t all that low. Additionally, if you file a Schedule C, your risk for audit increases again.
Long story short is that I could do my own taxes. I did them before when I was a resident and a fellow. However, my taxes were ridiculously easy at that time. I made very little money and owned nothing — not too difficult. However, now that I have a wife, kids, and a house, things are a little more complex and I would like to have someone look this stuff over for me. Also, like I said, in the case of an audit, I want someone on my side. Call me a chicken, but an audit is something I never want to have to deal with.
To be honest, I use a CPA for the the same reason I have Life Insurance, Disability Insurance, and Umbrella Insurance. I hope I never have to use my CPA to evaluate an audit in the same way I hope I never have to use my Life Insurance, Disability Insurance, or Umbrella Insurance. However, in the unlikely event that I need any of them, I want to have them.
Death and Taxes
TL;DR
Tax Weekend.
-Sensei
Agree? Disagree? Questions, Comments and Suggestions are welcome.
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