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income tax software

Posted by rabbit8 (My Page) on
Thu, Jan 19, 06 at 7:57

is buying income tax software a good thing to do to try and get more money back or will a person get more back if they let an income tax business prepare their taxes. One more question is it easier to follow the software instructions if you are a first time user and know very little about preparing taxes?
Thanks for your advice.


Follow-Up Postings:

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RE: income tax software

The government tax website has software you can use. They usually charge a small amount if you decide to file on-line, however if you send it in I think it may be cheaper or free.
We use it because it is very easy, step by step AND you enter the information and it will tell you if you should file jointly or separately (if you are married that is). It basically asks you:
1) do you have this form? ok, then fill out all this info from that form.
then you go through a series of Questions like
Do you have stocks? do you go to school? have kids?
All that stuff. It is easy and i hate filing.
i have never been to a tax prep service. There was H&R block around here and they got in trouble for stealing some people's info. We would rather keep our private informaton away from them. I guess we are paranoid. I bet they use the same software that we do anyways.
A professional tax guy (not part of some big company) may know alot of way to get a refund, however we do not know anyone in this profession. If we did I sure would give him my taxes in a second. I just don't want to pick a name out of the phone book. You never know what you get.
-renee


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RE: income tax software

Getting deductions and credits is an absolute crapshoot. You could ask half-a-dozen tax preparers, accountants, and tax software packages the same question and get eight different answers. The folks at income tax businesses aren't necessarily highly-trained accountants. (I have friends who have done it and simply went to class for the fall in anticipation of the January rush.)

I've used income tax software for the past umpty-ump years. I figure they can find experts in each area because they'll sell a few million copies of the program where it might not make sense for a given accountancy or income tax business to have an expert in every single area. The software also is available when I want to use it; no making appointments with someone to bring in records, make sure they understand what all of them are, and to pick up the return and sign it. Probably cheaper, too, though I have not priced a human tax preparer lately.


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RE: income tax software

I did my taxes at H&R block once and they missed many of the smaller deductions, which added up to a larger chunk of change. You have to look at it this way. H&R just looks at major credits and deductions to get your return done and get you out the door. They can't spend too much time on your return or they wouldn't make a profit. And the people that work there are not professional accountants (or they would know what they're doing), they're just college kids or other people off the street who are trained to do things the "H&R way".

So I stuck with doing my taxes my self with the help of Turbo Tax. I have used Turbo Tax for 7+ years now and it works real well. For the past 2 years the registration process was a real hassle, but this year it seems better. And the interview process seems grouped better for 2005 (this year) than other years. So I can go back to certain deductions without having to page through lots of useless stuff that doesn't apply to me. Plus you can always go right back to the particular form if you want.

TT this year comes with It's Deductible, another piece of software used to maximize your deductions, but I don't use it. I already know what I can deduct and how to do it.


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RE: income tax software

try www.taxact.com they will let you do your federal taxes for FREE! fill it out, and if you are not comfortable with it simply take your stuff to an accountant. it did not cost you anything to try it.

i have spoken with several people who use it, and they all love it. i will likely be filing my taxes thru them this year. i will have to pay for state filing, but that is still cheaper than using H&R Block or even Trubo Tax.


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RE: income tax software

Yeah. TT is up to $40 this year for the deluxe version. The deluxe version just has all the IRS forms, instructions, tables, and stuff on the CD in pdf format. If congressmen actually did their own taxes maybe it wouldn't be so complicated. Aren't they also exempt from federal income tax?


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RE: income tax software

I have used TT on the Web for severla years and find it easy and comprehensive.


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RE: income tax software

I have been using taxact for years. It's a very simple
program to use. Walks you through the whole process.
Check it out.

Gemfire


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RE: income tax software

Whatever system you use, may I make a suggestion?

That you spend some time learning how the tax system works.

As a personal financial advisor for some 20 years, I've called some of the people who advertise locally as tax preparers, to ask whether their clients ask them, after the tax return is completed, for some suggestions as to how they might change their money management system, possily lifestyle, in order to reduce their tax liability in later years.

I was astonished to hear that hardly anyone asks that.

When I have someone prepare my tax return, that person gets to know quite a lot about my financial affairs.

And, as s/he is something of an expert on the way the tax system works, might have some wise advice as to how I could change things a bit, or even substantially, in order to give less to the income tax folks and keep more in my jeans. Next year - if I rearrange things now.

No harm in asking: if I know some ways that I might reduce tax, there's nothing to say that I need put them into practice - the choice is mine. But if I haven't expended some effort to learn, the option isn't there.

As I've said so many times around here that I'm sure quite a few of you are tired of hearing it - "Learning how money works is an interesting hobby - *that pays well*"!

That goes for the tax component of it, as well.

If ya don't know - ya can't do!

Have a great weekend.

ole joyful


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RE: income tax software

Joyfulguy, you are right. I did my own taxes on paper since 1985, so I had to spend time reading all the manuals from the IRS that pertained to my situation. Then I got Turbo Tax about 1998 and have used it ever since.

There is no substitute for real knowledge and experience. TT is a tool that helps me get the job done. But I still have to understand the tax laws.


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RE: income tax software

I've always done my own taxes, went paperless in 1995 and never looked back. I have used TurboTax and TaxCut.

Last year my kids were able to do their taxes on line for no charge...went to the IRS website and got a link to a free site. They filed the short forms.

Many low income earners, who qualify for earned income credit and file the short form were going to HR Block, etc, paying EXHORBITANT fees, plus getting those refund anticipation loans. I educated a few of them to file thru the on-line sites, they did, and got their refunds (and they were about 25-30% more since they didn't have to pay fees).


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RE: income tax software

pesky1,

Around here, the Income Tax people train Volunteers each year who then, either in about a dozen clinics around our city of 250,000 or so, or a couple of dozen more in surrounding counties, prepare income tax returns for low income people, for no cost.

They also visit seniors or shut-ins at home.

One Christian agency that help the poor and homeless got some people trained and set up a clinic - and no one came.

Clinics don't start operation till mid-Feb. and it takes a couple of weeks for arrival of refund, early in the tax season (April 30 is deadline in Canada).

The poor couldn't wait - so went to H & R Block-head - for the instant refund (less fee).

Sometimes it sure pays big time if one can wait for even a short while.

ole joyful


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RE: income tax software

FYI

Here is a link that might be useful: article comparing tax software


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RE: income tax software

Sorry if this is a dumb queston, but: do you have to buy new Turbo Tax software every year? Or do you buy it one year and it's good for several years after that? I have one I bought and used the year before last and wonder if I need a new one now?


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RE: income tax software

You have to buy a new one every year because the tax law changes every year. In addition, as bugs are discovered and features added to the software, they are not applied to older versions, they are applied to this year's version.


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RE: income tax software

I'm fortunate.

When the income tax people train me as a Volnteer, I have the option of using tax software they issue to us to prepare the returns of the low-income clients for which we prepare their returns at no charge - and I get to do my own return using it, as well.

Plus one or two other family folks.

I get the updated version annually.

ole joyful


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RE: income tax software

I use tax software to do my taxes, but I also do 5 other people's taxes too (because they know I bought the software!!!!!).

I, like fellow Canadian joyfulguy, took the time to learn how our income tax works. Doing it manually really gets you to learn. I scoured our government website, and actually reviewed as many help guides in the tax software i could.

There are cheaper versions out there than the one I got, but once you buy one version, your kinda stuck with it each year, as it "remembers" stuff you put on last year and carries them forward for this year.

I did get it done professionally once. I believe it is still a good idea to do that, just to reaffirm yourself that you are capturing all the deductions and claiming everything you are entitled to.


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RE: income tax software

There are so many potential deductions us "lttle people" don't know about, like you can deduct transportation to and from doctors visits, and for a second job (but not your first). No matter who prepares my return, I think I'm missing out on something. And does everyone know you can file amended returns as late as three years later if you wish?


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RE: income tax software

I have used TaxAct for years. It is a step by step process that guides you through it. You can pay and get a PRO version if you have questions, probably cheaper than buying the tax software. My state also has free software that you can do your state tax. Just go to your states website and see if you can do your state taxes there for free.


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RE: income tax software

Used turbo tax and carefully filed for many years. No longer. When you pay an enrolled agent to do your taxes you get a "face" to deal with an audit. I had an audit that questioned my head of household although I had full custody of my six year old. Impossible to deal with IRS and State Franchise bureaucracy. The enrolled agent is priceless alternative. I did nothing wrong on Turbo tax, but the threats of penalties and interest while navigating the bureaucracy, caused a lot of grief. Never again.


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