This blog is about 5 Ways to Make Money Filing Your Own Taxes. I just finished filing my taxes last week (what a relief) and this is the 2nd year that I filed our S-Corp and our 1040 on my own.

Last year when I filed on my own for the first time it was grueling to figure it all out and I didn’t file until October 15th! The reason I stopped using an accountant is because my accountant quit on me. She said all the law changes during 2020 just messed up her business. The accountant she referred me to just wasn’t as good.

A friend of mine was doing their families taxes on her own, and they had an S-Corp, non-profits, and lots of different entities. She encouraged me to file myself.

I always thought because I had various investments, an AirBnB business and an S-Corp that it would be too complicated for me to file on my own. I also have never fully understood my tax returns, and I know that the IRS says that we are ultimately responsible, and not our accountant. So with the encouragement of my friend, I decided to go for it and file on my own.

I figured most of it out from copying tax returns from years past and reading instructions. FYI the IRS does not answer the phone. My friend did and helped me as best she could. It took me a long time also to figure out how to fix the errors from that accountant from the prior year.

This year it was much easier to file on my own, and because of my new found knowledge, I encouraged a friend of ours to come by while I did our taxes and work on his taxes. He initially said he was 1 year behind, but I just found out last week that he’s 3 years behind (gulp!).

Immediately I thought of all of the money he could be making if he just filed his taxes on his own. So that is the inspiration behind today’s blog post.

#1 Way to Make Money Filing Your Taxes – Get Your Maximum Refund

The most obvious reason he should file taxes is to get his refund! He has a W-2 job and 3 businesses, 1 of which has depreciation and has been bleeding cash since COVID.

Why file on his own?

I find that when I file on my own I actually understand my taxes, and know how to maximize my refund with the correct deductions. An accountant may or may not make the extra effort to get you all the deductions you can take, and they don’t know your finances as good as you anyway.

This was the case with my last accountant. So filing your own taxes helps you maximize your refund (or minimize your taxes owed).

#2 Way to Make Money Filing Your Taxes – Withold Less and Invest

The 2nd and less obvious way to make money be filing your own taxes is that you can figure out how to withold less from your paychecks. If you are getting a refund every year then you are basically giving the U.S. government and interest free loan every year!

Why not just pay them less or even owe them a little every year? Isn’t that better?

This gives you more money in your paychecks, which is essentially making yourself more money instantly. You can invest that money and make even more money. Even U.S. Treasury Bills that have 3 month maturities are paying over 5%.

#3 Way to Make Money Filing Your Taxes – Invest the Accountant Fee

When I first discussed doing my own taxes with my friend, she said why pay an accountant when you can use that money for something better?

At the time, I was paying our accountant $800 for the business return and $400 for our personal tax return.

Our accountant wasn’t categorizing expenses either, I did all that and sent it to your acccountant.

So last year we used the savings from not paying the accountant to help pay for a trip to Mexico, to attend a friend’s wedding.

Now that interest rates are so high, through the money in I-bonds if your saving long term, or T-Bills if you’re not. Obviously the investment landscape is constantly changing but look around and invest the savings from your accountant fee!

#4 Way to Make Money Filing Your Taxes – Make Interest on IRS Payment You Owe

Let’s say you owe money to the IRS on April 18th. This could be because you are withholding less now or maybe you do estimated tax payments.

Maybe put your estimated tax payments in short term U.S. Treasury Bills that mature when your taxes are due in April.

That way you are withholding but you are in control of the money, and making 5% or more if you use T-Bills at today’s rate.

#5 Way to Make Money Filing Your Taxes – The Indirect Making Money Effect of Efficiency

Finally, and this is actually the coolest way to make money by filing your own taxes in my opinion, as you learn more about what is actually going on in your tax return, you are going to make better financial decisions.

I’ve noticed that because now that I understand my taxes, I organize my finances better and easier.

This has actually given me more time to invest and research, instead of being worried about taxes.

So as an indirect effect, I’ve become more efficient with my own bookkeeping and and even how I organize my papers and tax documents. This is saving me time and energy. I’ve been attracting more money making opportunities, have more time to spend with business associates and I can understand financial statements and businesses better.

This is helpful in making better investment decisions and in creating the organization to maximize earnings. One easy example is that I am organized enough to move money into higher and higher interest rate 3 month and 6 month Treasury Bills, which has increased our passive income.

Another is that I am navigating out of losing investments more efficiently, and finding more stable investments with positive returns.

Also, doesn’t it just feel good to know what’s happenning with your money?

Conclusion

I read in Rich Dad Poor Dad by Robert Kiyosaki that you should form a team and that one of the team members should be an accountant to handle taxes. They are going to know more about taxes and be able to help you get ahead.

While this has definitely been true, I think if you don’t own a business or are a small business owner, it may be worth it to do your own taxes for a few years at least. I know that I didn’t really understand my taxes until I did them myself.

Now that I understand them better, I understand the scope of the work involved in preparing them, and can pay an accountant the appropriate fee if I choose to in the future.

I hope you got great value out of this post! Please comment and share =)