Should I learn to do my own tax?
"I would advise against ""pencil and paper"" approach for the following reasons: You should e-file instead of paper filing. Although the IRS provides an option of ""Fillable Forms"", there's no additional benefit there. Software ensures correctness of the calculations. It is easy to make math errors, lookup the wrong table It is easy to forget to fill a line or to click a checkbox (one particular checkbox on Schedule B cost many people thousands of dollars). Software ask you questions in a ""interview"" manner, and makes it harder to miss. Software can provide soft copies that you can retrieve later or reuse for amendments and carry-overs to the next year, making the task next time easier and quicker. You may not always know about all the available deductions and credits. Instead of researching the tax changes every year, just flow with the interview process of the software, and they'll suggest what may be available for you (lifetime learners credit? Who knows). Software provides some kind of liability protection (for example, if there's something wrong because the software had a bug - you can have them fix it for you and pay your penalties, if any). It's free. So why not use it? As to professional help later in life - depending on your needs. I'm fully capable of filling my own tax returns, for example, but I prefer to have a professional do it since I'm not always aware about all the intricacies of taxation of my transactions and prefer to have a professional counsel (who also provides some liability coverage if she counsels me wrong...). Some things may become very complex and many people are not aware of that (I've shared the things I learned here on this forum, but there are many things I'm not aware of and the tax professional should know)." Interesting. When you say DIY you mean pencil and paper. For most of us the choice came down to using a professional vs using the software.  Your second bullet really hits the point. The tax return is a giant spreadsheet with multiple cells depending on each other. Short of building my own spreadsheet to perform the task, I found the software, at $30-$50, to be the happy medium between the full DIY and the Pro at $400+.  With a single W2, and no other items, the form is likely just a 1040-EZ, and there shouldn't be any recalculating so long as you have the data you need. Pencil/paper is fine.  There's no exact time to say go with the software, except, perhaps, when you realize there are enough fields to fill out where the recalculating might be cumbersome, or the need to see the exact tax bracket has value for you.  You are clearly in the category that can fill out the one form. At some point, you might have investment income (Schedule D) enough mortgage interest to itemize deductions (Schedule A) etc. You'll know when it's time to go the software route.  Keep in mind, there are free online choices from each of the tax software providers. Good for simple returns up to a certain level. Thanks to Phil for noting this in comments.  I'll offer an anecdote exemplifying the distinction between using the software as a tool vs having a high knowledge of taxes. I wrote an article The Phantom Tax Zone, in which I explained how the process of taxing Social Security benefits at a certain level created what I called a Phantom Tax Rate. I knew that $1000 more in income could cause $850 of the benefit to be taxed as well, but with a number of factors to consider, I wanted to create a chart to show the tax at each incremental $1000 of income added. Using the software, I simply added $1000, noted the tax due, and repeated. Doing this by hand would have taken a day, not 30 minutes.  For you, the anecdote may have no value, Social Security is too far off. For others, who in March are doing their return, the process may hold value. Many people are deciding whether to make their IRA deposit be pre-tax or the Post tax Roth IRA. The software can help them quickly see the effect of +/- $1000 in income and choose the mix that's ideal for them. If you've been using TurboTax, let me suggest a compromise: Let TTax fill out the forms, but then print them out and go through it again by hand. If you don't get the same numbers, investigate why. If you do, you can probably conclude that you could do it by hand if you really want to, especially if you have the previous year's returns as a reference. (I've gone through every version of this from before personal tax software existed thru hand-constructed spreadsheets to commercial software and e-filing (federal only; I refuse to pay for something that reduces THEIR work). I can't use the free online version -- my return's got complications it won't handle -- and I'm uncomfortable putting that much data on a machine I don't control, so I'm still buying software each year. I COULD save the money, but it's worth a few bucks to me to make the process less annoying.) Late edit: Note that a self-constructed spreadsheet is one answer to the annoyance of pencil and paper -- you're still doing all the data manipulation yourself, but you're recording HOW you manipulated it as you go, and if numbers change you don't have to redo all the work. And it avoids raw math errors. It does require that you enter all the formulas rather than just their results, and figuring out how to express some things in stylesheet form can be a nuisance, but it isn't awful... and once you've done it (assuming you got it right) updating it for the next year is usually not hard unless you've introduced a completely new set of issues.
Can you elaborate on how corporate tax cuts exactly drain the economy and destroy jobs?    I feel like, going straight off text-book, his tax-plans make sense. It's very possible that I am a really confused student. (Currently second year student)  -edit  This is my interpretation of the capital-tax-gain-cut proposed by the Trump administration based on what I have learned in Micro/Macro-Econ thus far in college:   Less capital tax = less pressure on the wealthy/entrepreneurs (since you keep bigger portion of your net income, the interest to bring back business should increase) = capital inflow back to the US.    I feel like I'm missing something big here since a lot of folks seem to be against this, and I want to understand why something is the way it is. Thank you in advance. The broker that is issuing the moneys after vesting is more than likely deducting a notional amount of tax and NI based on UK income tax laws. If you are not a UK resident, then you should pay income tax on those stock options based on your own tax residency. Best thing to do is speak directly with the broker to explain the situation, ask them to not deduct anything from your stock options - but keep in mind that you will need to declare these earnings yourself and pay the correct rate of tax. From my own personal experience, the UK employer more than likely receives the net value (after the notional tax and NI have been deducted) and in usual circumstances create a tax liability on your payslip (if you were working and had earnings). If of course this deduction is being made by the employer, then you can simply ask them to correct this (most UK payroll software will automatically deduct tax and NI for payments after leaving unless manually intervened, so they probably aren't aware if it is them doing so). "&gt; Thank you for the wealth of information!  Sure, I hope my opinions are food for thought.  &gt; 1) Does that basically translate to ""less tax on poor/wealthy...to promote entrepreneurship?  No, your typical entrepreneur is a smart, disgruntled employee who thinks they have a better way to do a job.  If you want more entrepreneurs, you should do things to help them succeed in a new company and minimize the risk.  Some ways to do this:  * Create a government agency that offers programs that help new companies.  Guidance and funding are obvious candidates.  Advertising for small local business would help too.  One of the most important would be getting complementing talent together because a start-up needs the talents of at least four different people to have a good chance of succeeding.  * Establish guaranteed health care.  A 40-something with a wife and kids may have a great idea but can't risk to leave his family with no health insurance for the two years it would take to get his idea off the ground.  * Better enforce anti-trust law.  I believe small companies are stifled by big companies because the latter control too much of the market.  If you want competitive markets you need to either break-up or handcuff and monitor the big players.  * Create a better safety net.  It is a lot easier to go on your own if you know at least you won't starve.  &gt; 2) Rich using money to grow their own wealth. But wouldn't that mean as a byproduct, jobs will be made?  In theory, yes, but I believe in practice the opposite happens.  Big companies can make significantly more money hoarding their market share rather than branching into new markets.  Here's a true story of my last company with names changed:  Company A makes widgets.  Company B makes bookkeeping software for tracking widgets and is very successful, controlling a majority of the market.  Company A buys Company B at an inflated price.  The government allows the sale on the condition that Company A does not use Company B's information on the widget market to gain an unfair advantage.  Company A agrees and the buyout takes place.  Company A then approaches all of Company B's customers and says, ""Let us look at the data on your bookkeeping software and we will give you a 5% discount.""  Most customers agree so Company A now has all the data controlled by Company B but this is not illegal because they got it from Company B's customers, not company B.  Company A proceeds to undercut the market because it now knows exactly how much their competitors widgets sell for.  Company A now controls a majority of the widget market and their market share continues to grow rapidly.  By the way [here is that Bloomberg article I described earlier about repatriation being about buyouts](https://www.bloomberg.com/gadfly/articles/2017-05-08/theory-of-tax-repatriation-is-better-than-the-reality).  &gt;&gt;  Take home money is used for investment. It isn't.  &gt; 3) I don't think I understand this one at all. Will you rephrase it for me?  The argument is that we need to tax corporations less so they can invest more.  Here's the problem -- investments are not taxed.  A corporation's tax is a percentage of their gross income minus their expenses.  Investment is an expense.  Therefore the more they invest, the lower their tax bill.  If you want companies to invest more, raise their tax rate.  &gt; 4) I did hear from my professor and the educational videos he had shown us that the capital tax is one of the highest among the other OECD nations.  I need to walk back what I said earlier.  The US corporate tax rate is one of the highest.  Does that mean US corporations pay the most tax?  Well, [it's complicated](http://www.npr.org/2017/08/07/541797699/fact-check-does-the-u-s-have-the-highest-corporate-tax-rate-in-the-world).  &gt; ...why can't we just close loop-holes instead of choosing to slash capital tax?  Note that those go in opposite directions.  Closing loopholes would make companies pay more.  Slashing capital tax would have them pay less.  Perhaps doing both would be revenue neutral.  I would be in support of that because I suspect loopholes benefit big companies a lot more than small ones because they have the resources to find and exploit those loopholes.  That said, people in power have been talking for 20 years about ""closing the loopholes"".  They never do.  [CGP Gray has an excellent video explaining why these loopholes are not going anywhere anytime soon](https://www.youtube.com/watch?v=rStL7niR7gs).  &gt; 5) I think it's in each company's best interest to further their own agenda, and that agenda usually means bad for the majority.  Yes, that's a much better way of saying what I meant.  &gt; Thank you in advance for your time.  Sure, thanks for thinking, asking questions, and making up your own mind." "IMHO It is definitively not too early to start learning and thinking about personal finances and also about investing.  If you like to try stock market games, make sure to use one that includes a realistic fee structure simulation as well - otherwise there'll be a very unpleasant awakening when switching to reality... I'd like to stress the need for low fees with the brokerage account! Sit down and calculate how much fees different brokers take for a ""portfolio"" of say, 1 ETF, 1 bond, 1 share of about $500 or $1000 each (e.g. order fee, annual fee, fee for paying out interest/dividend).   In my experience, it is good if you can manage to make the first small investing steps before starting your career. Real jobs tend to need lots of time (particularly at the beginning), so time to learn investing is extremely scarce right at the time when you for the first time in your life earn money that could/should be invested. I'm talking of very slowly starting with a single purchase of say an ETF, a single bond next time you have saved up a suitable amount of toy money, then maybe a single share (and essentially not doing anything with them in order to avoid further fees). While such a ""portfolio"" is terrible with respect to diversification and relative fees*, this gives you the possibility to learn the procedures, to see how the fees cut in, what to do wrt taxes etc. This is why I speak about toy money and why I consider this money an investment in education. * An order fee of, say, $10 on a $500 position are terrible 4% (2 x $10) for buying + selling - depending on your local taxes, that would be several years of dividend yield for say some arbitrary Dow Jones ETF. Nevertheless, purchase + sale together are less than 3 cinema tickets." How S&P 500 returns are calculated is jotted down here. You should follow the same methodology i.e. base-weighted aggregate methodology to calculate your own returns. Anything different and it would be an incorrect comparison. That may become complicated depending on the State laws. In some States (California for example), LLCs are taxed on gross receipts, so you'll be paying taxes on paying money to yourself. In other States this would be a no-op since the LLC is disregarded. So you need to check your State law. I assume the LLC is not taxed as a corporation since that would be really stupid of course, but if it is then it adds the complexity of the Federal taxes on top as well (corporate entity will pay taxes on your rent, and you'll pay taxes on your dividends to get the money back). The best option would be to take that property out of the LLC (since there's no point in it anyway, if you're the tenant). "From the IRS perspective, there's no difference between ""your taxes"" and ""your sole proprietorship's taxes"", they're all just ""your taxes"". While I could see it being very useful and wise to track your business's activities separately, and use separate bank accounts and the like, this is just a convenience to help you in your personal accounting, and not something that needs to relate directly to how tax forms are completed or taxes are paid. When calculating your taxes, if you want to figure out how much ""you"" owe vs. how much ""your business"" owes, you'll have to do so yourself. One approach might be just to take the amount that your Schedule C puts as income on your return and multiply by your marginal tax rate. Another approach might be to have your tax software run the calculations as though you had no business income, and see what just ""your personal"" taxes would have been without the business. If you think of the business income as being ""first"" and should use up the lower brackets rather than your personal income, maybe do it the other way around and have your software run the calculations as though you had only the business income and no other personal/investment income, and see what the amount of taxes would be then. Once you've figured out a good allocation, the actual mechanics of paying some ""personal tax amount"" from your personal bank account and some ""business tax amount"" from your business bank account are up to you. I'd probably just transfer the money from my business account to my personal account and pay all the taxes from the personal account. Writing two separate checks, one from each account, that total to the correct amount, I'm sure would work just fine as well. You can probably make separate payments from each account electronically through Direct Pay or EFTPS as well. As long as all taxes are paid by the deadline, I don't think the IRS is too picky about the details of how many payments are made." "The point is that you need to figure out when a ""business expense"" is actually just a personal purchase. Otherwise you could very easily just start a business and mark all of your personal purchases as business expenses, so you never have to pay income taxes because you're handling all of your money through the untaxed corporation."