I have been filing my own taxes since 2019, beginning with my 2018 federal and state income tax returns. Before then, I paid a Certified Public Accountant (CPA) a few hundred dollars each year to prepare them for me. Although I did not have to worry about the details of completing the returns, I was still responsible for collecting the tax forms sent by my employer, banks, and other financial institutions. I valued the convenience and peace of mind that came with having a professional handle the process. I could rest assured that my refund or balance due had been calculated correctly, and I did not have to deal directly with the Internal Revenue Service (IRS) if a problem arose.
Given the stories I had heard about how difficult resolving tax issues could be, that reassurance seemed to justify at least part of the cost. Over time, however, I began to question how much I understood about the calculations behind my own returns. While it was obvious whether I was receiving a refund or had a balance due, I did not always know exactly how that result had been determined. Filing my own returns required me to connect my existing financial knowledge with the forms, calculations, and decisions involved in preparing my taxes.
Why I Decided to File My Own Taxes
My family has a long history of working in accounting. My oldest brother is a CPA, my cousin runs his family’s accounting and tax preparation business in Miami, and several other relatives have worked as accountants at different points in their careers. The person who ultimately inspired me to file on my own, however, was my oldest brother. At one point in his career, he helped prepare business tax returns for a former employer. I remember him explaining how much more complicated those returns were than a typical individual income tax return.
He had also been filing his own taxes for years and spoke about how straightforward the process could be, which encouraged me to try it myself. His experience gave me confidence, but I still did not want to approach my first return carelessly. I decided to review what my accountant had done in previous years and recreate the process. My objective was not simply to save money but to understand the return well enough to recognize whether the final numbers made sense.
How I Prepared to File on My Own
My tax situation had been relatively straightforward for several years. I lived in New Jersey, earned wages in New York from a single employer, and was not married at the time. I had no dependents, business income, rental properties, or side projects generating additional income. I started by reviewing the federal and state returns that my accountant had prepared in previous years.
I familiarized myself with the structure of IRS Form 1040 and traced how information from forms such as my W-2 and 1099s flowed into the corresponding sections. Once I understood where each figure belonged, the return seemed less like an indecipherable government document and more like a summary of my financial activity for the year. Living in New Jersey while working in New York added another layer. In addition to filing a New Jersey resident return, I had to file a New York nonresident return because my wages were earned there.
Preparing both helped me understand how resident and nonresident state returns interact and why the same income can appear on more than one return without being fully taxed twice. Previously, I had viewed the two state returns as documents my accountant completed behind the scenes. After preparing them myself, I understood why each return was required and how taxes paid to one state could affect the amount owed to the other.
Creating My Own Tax-Planning Spreadsheet
I eventually created an Excel file that mirrors the general structure of Form 1040. It automatically performs any calculations and gives me a centralized, year-by-year record of my tax history. Maintaining the file has helped me see how changes in my income and investments could affect my taxes. As my tax situation has become more complicated, the spreadsheet has helped me track estimated tax payments, investment income, and other items that may not be fully covered by my employer’s withholding.
I can update it throughout the year instead of waiting until tax season to realize that I may owe a significant amount. My general goal is to finish the year with neither a large refund nor a large balance due. Paying too little throughout the year can lead to an underpayment penalty, while a large refund generally means that more money was withheld from paychecks than was ultimately required. A refund can feel like a windfall, but it is simply the return of money that could have been saved, invested, or used to pay down debt.
My annual process is now consistent. I list the tax forms I expect to receive, compare them with the prior year, update my spreadsheet, prepare the federal return, and then complete the state returns. I also compare the final results with my projections and prior filings before submitting anything. Following the same routine reduces the chance that I will overlook a form simply because it was delivered electronically or came from an account I rarely use. It also makes unusual changes easier to identify.
How Filing Reinforced My Financial Knowledge
Because I already worked in the financial services industry, concepts such as withholding, tax liability, deductions, credits, investment income, and capital gains were not new to me. Filing my own returns reinforced that knowledge by requiring me to apply those concepts to my personal finances and observe their practical effects. For example, I already knew that the amount withheld from a paycheck was not necessarily the amount ultimately owed. Completing the calculations myself made the relationship more tangible because I could see how withholding, other tax payments, and the final liability produced either a refund or a balance due.
The process also reinforced how different types of investment activity affect taxes. Interest, dividends, and realized capital gains can each appear differently on a return, while an unrealized increase in an investment’s value generally does not create taxable income by itself. Reviewing the forms from my financial accounts connected investment decisions more directly with their tax consequences. Most importantly, filing my own taxes reinforced the idea that taxes should be incorporated into broader financial planning rather than treated as an isolated annual obligation. When evaluating an investment sale, additional income, or a change in withholding, I now have a better understanding of how that decision may affect my return.
When Filing on Your Own May Not Make Sense
Filing independently will not be appropriate for everyone. Someone with multiple income streams, a business, several properties, complicated investment transactions, foreign accounts, or other unusual circumstances may be better served by a CPA or another qualified tax professional. The money saved may not justify the risk of submitting an inaccurate return. A knowledgeable professional may also recognize deductions, elections, or reporting requirements that an inexperienced filer could overlook.
Even people who normally prepare their own taxes should remain willing to seek professional assistance when their circumstances change. Filing on your own should not become a matter of pride. The objective should be to file an accurate return while understanding enough about the process to make informed financial decisions. For someone with a relatively straightforward return, one possible transition is to prepare it independently and then ask a professional to review it before submission. If the calculations match and the individual’s tax situation remains similar the following year, completing the process alone may feel more manageable.
Saving Money Was Only Part of the Benefit
The direct financial savings have been meaningful. If I had continued paying approximately $300 per year over eight tax seasons, I would have spent roughly $2,400 on tax preparation fees. The actual amount is likely higher as my financial picture has become more complicated and tax-preparation costs have risen. That said, saving money was not my original motivation. I wanted to understand how the process worked and how my wages, investments, withholding, and tax payments affected the final result. I still view filing a tax return as a government-mandated annual obligation, but I now approach it with greater knowledge and confidence. I do not claim to be a tax expert, but I am comfortable filing independently while still seeking professional advice when circumstances require it.
This article is based on my personal experience and should not be considered financial or tax advice. Filing independently is not the right choice for everyone, particularly when a return involves complicated or unfamiliar circumstances. For someone with a relatively straightforward situation and a willingness to learn, however, preparing a tax return can provide valuable insight into how taxes fit into broader financial planning.