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Swab
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Discussion Starter · #1 · (Edited)
Its that time of year again for Americans. In an Orwellian twist, H&R BLock is calling it "Refund season" in their teevee ads. I expect most folks on this board are smarter than that. But I think there may be some here who wonder about how to deal with taxes while cruising.

Like most people I know, I have always had my taxes done by an accounting service. When I retired and set off cruising, It took some time on the phone to get them to understand but after that it was pretty straightforward and relatively easy to fill out their questionaire on line and have them e-file for me.

Last year, they increased their fees by more than %400 while my income went down into low 5 digit territory. I fired them.

I imagine filing on line should be pretty, ummm....... available, if not quick, simple, easy or cheap. Any suggestions? I just decided I should probably start working on it.

It really will be pretty simple for us, but cruisers have to consider their state of residence and/or vessel registration home port and a host of other considerations. Given a choice, I would think that US Flagged cruisers would choose to establish residence in a state that has no income tax or property tax on boats for example. What else?
 

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Master Mariner
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9,417 Posts
I suggest keeping it pretty simple. Not trying to find every little deduction and go the easy route. After all, the last thing you want is to have to go home for an audit.
 

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Registered
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249 Posts
Filing online is available. If your taxes are really simple (as in 1040EZ), I think you can file that online directly with the IRS.

Otherwise, I've used TurboTax online for several years. My taxes are moderately but not extremely complex. I've only bumped against the edges of the advice they can give a couple of times. Depending on your bank, broker, etc, they can auto-import data from a number of sources.

But keep in mind the potential security issues of storing your financial info in the cloud. I suppose an online service should be as trustworthy as a brick-and-mortar accountant, but there've been lots of hacks on companies over the past few years.
 

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Swab
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825 Posts
Discussion Starter · #4 ·
I suggest keeping it pretty simple. Not trying to find every little deduction and go the easy route. After all, the last thing you want is to have to go home for an audit.
Simplicity is one of the virtues of the cruising life. The annual ritual of reporting income to the IRS is a complication most of us cannot avoid. Short of reducing income below the reporting threshold, what can you do to simplify the process? (I am afraid abolishing the IRS is pretty much off the table:()
 

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Over Hill Sailing Club
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3,688 Posts
File the automatic extension, go cruising and worry about it later:) If determined to stress out about it now, there are a number of free online filing options. Just go to the IRS website: Free File: Do Your Federal Taxes for Free Some of these can actually handle some fairly complicated tax issues.
 

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I've used the software from Taxact.com for over ten years, they are on the IRS list of companies that have a free filing for AGI of $60,000 or less. I've been using the "deluxe bundle" for $20 that is state and fed because it imports prior year data, without the importing I think it's $15 for a regular bundle.
Error
I am not a cruiser but I also have been using Taxact for many years. It is all online, no CDs to buy etc. And since it all happens in a browser, it is operating system independent (I don't use Microsoft or Apple products). Filing is electronic, too, if you want it (I do paper because I want to have a hardcopy backup; I guess just like I want to have paper charts in addition to electronic ones).

If your tax situation is simple, you can probably fill in the questionary within an hour or two, push the send button and be done with it. And chances are that it is free for a simple case, or a few bucks at the most.
 

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Good morning Vega:

Disclosure alert >>> I am a practicing CPA, cruising seasonally now until I can sever the BIG dockline in a few years.

It seems to me that you simply need a new relationship with a different (better) CPA. The one thing I like about being on board and "away" from all of this crap that ties us to computers and land and hassle, is the ability to not have to worry about things.

The IRS is relying more and more on automated letters and automated "audit steps". When you're away with no one to watch your back, these letters pile up. And if you don't respond (on what they consider to be) timely, they automatically enter into a default judgment and find that you owe $XXX and it's too late to argue or explain. In fact, most of these automated letters are incorrect, inaccurate, or just plain erroneous. BUT if you don't jump on them right away, bad things happen quickly (hmm, sounds a bit like boat maintenance, right??)

Find a small CPA office or firm who cares about you, protects you, and has your best interest at heart. With the technology available to us today (through email, scanning documents, electronic signatures, sending pdfs, etc.) you could be on the moon and your CPA located in Montana . . . and it would work just fine.

Our experience is that these personal software programs are really EXTREMELY good. Very accurate, good logic, and quite precise. It's for those situations when things get a bit "messy" that you want a real live person to protect you.

Just my two cents worth!

~markb
 

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Over Hill Sailing Club
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3,688 Posts
The thing I don't like about Turbo is that it does not seem to have a file save function in .pdf but only in their proprietary format. I think that's why I decided to stop using it a few years ago. It does have all the whistles and bells though. I also think the price has become out of line especially when there are functional free on-line services.
 

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I have use TurboTax for more than 15 years. You can be anywhere and file on line.

This year I would hold off for a few weeks, some of the online tax filings have been made by identity thieves.

I usually can't file until mid-march when the last of my 1099's from multiple sources come in.

Keep paper copies and keep digital copies separate from your computer on thumb drives.
 

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murph
The TurboTax I use has save to .pdf

Another option when you go to print, change the print option to save to .pdf

The free online versions are great if your taxes are not too complicated.
 

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"We have successfully gotten our income below the threshold for filing - well below. No need to file at all."

FILE ANYWAY.

If someone at the IRS gets their knickers in a knot, they can come after you for failing to file, which can be a problem. If you file a return that says you had so little income that nothing is due, they can always ask for proof of that, but they can't come after you for failure to file.

Internet, download & print form, envelope & postage including "proof of mailing" or better...it still adds up to cheap insurance. Uncle Sam sometimes simply gets upset when they realize 'Hey, we're not on his xmas card list anymore!". They really prefer to see the zero tax filing.

The few CPAs, IRS ex-employees (including an auditor), and other folks who have been good sources of advice to me over the years, have all been emphatic about this. File anyway, it is cheap insurance.
 

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Filing online is no problem at all. Especially if your return is simple. Changing your residency is much more difficult.
 

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Over Hill Sailing Club
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Smurf, it saves to PDF - Just click Save As.

Gary :cool:
I think there may have been a period when they did not have that option? In order to look at the old return, it seems I had to bring up their file type and dig around for the old year-disc. Anyway, my returns are much simpler now than when I was trading stocks and had complicated calculations and 30 page returns:) SIMPLIFY is my motto now. The only thing that is a pita now is those sch.K forms that arrive VERY late.
 

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For K-1's best to go for the online option, the K-1's will usually be available online at least 1 week before the mailing.
 
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