Using Excel to Do Our Taxes

I don't use tax preparation software to do my taxes.    I use Excel and create worksheets for each form I need, and then link the worksheets together as needed.

Here're the reasons I do that:

• I am cheap.  I don't want to pay $30-60 each year for tax prep software.
• I get a better understanding of how financial events affect my taxes, since I read each instruction to create a worksheet for a form.  Essentially, I am doing the tax return by hand, and using Excel to do the math calculations, which eliminates a major cause of errors.
• Using Excel allows me to easily run scenarios to determine how our tax liability is affected.  For example, I can plug in different numbers for Roth conversions to determine the best conversion amount, from a tax perspective.   Also, I can update the input information very quickly to get a real time estimate as the year comes to a close.

Of course, as many people point out, there are some downsides to using Excel to do my taxes:

• I may misinterpret the calculations on a form and enter an incorrect on Excel. I don't think this has happened yet.
• I need to update Excel each year if there are changes.  For many years, the same format was used.  However, recently, the IRS seems to be routinely changing the 1040 format and a few other forms on an annual basis.  This has been tedious chore in some years, causing me to delay doing our taxes.
• I may copy the number incorrectly to the actual tax form.  This has happened a couple times, but I was able to correct via a phone call.
• I may forget a new form.  This has happened once and I submitted form later.

For me, the pros outweigh the risks at this time.  I do expect that I will be less interested/capable as I get older, and may have to transfer the responsibility to a paid professional sometime in the future. 

However, for now, I will continue to do our tax returns by hand using Excel.

For more on Ideas You Can Use, check back Tuesdays for a new segment.

This is not financial nor tax advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Stock Market Entertainment Tomorrow

After closing at %94.20 yesterday, Gamestop (GME) was 28.94% to $123.14 during the day, and up 20.06% to $143.20 after hours.  I'm getting up early tomorrow and checking the premarket activity. If GME move up substantially, I expect tomorrow to be a wild market, for GME and other meme stocks from Wall Street Bets. 

For more on Ideas You Can Use, check back Tuesdays for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Oil, Precious Metals, and Fertilizer, OH MY!

I've been bagholding numerous oil, oil service, precious metals and potash (feritlizer) since 2013-2015.   I bought as these stocks were declining from their all time highs.  However, they kept falling further.   In all cases, I was carrying these stocks at a loss.    

I sold some oil stocks in December 2021 to harvest tax losses, fully expecting to buy them back in 30 days at the same price or lower.  That didn't happen.  With the expected Russian invasion of Ukraine, most of the oil and oil service stocks began going up in January.  In some case, such as OXY, as much as 100%.

Now the oil, oil service, precious metals, and potash stocks are mitigating the declines in my other stocks.  Many of the stocks have been going up 15%, 50% or even 100%.    I feel vindicated for holding on, but I'm not optimistic the gains will be sustainable.   Thus, I am slowly scaling out of these positions as the price rises, a few shares at a time, since the trades are commission free.    

Hopefully, I will get out of most positions before they peak and start falling.

For more on New Beginnings, check back Sunday for a new segment.

This is not financial nor investment  advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC