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Candy
2005-Feb-01, 01:11 PM
TurboTax (www.turbotax.com)

A co-worker swears by this, so I decided to try it. He said it would take 30 minutes. Well, it took close to 2 hours to do Federal and State.

After I completed it, I did end up filing an electronic return.

Word to beginners, if you chose to use TurboTax (so it doesn't take you 2 hours trying to find last year's stuff) …

1) You will need your State’s PIN number, which the program will help you find with a series of questions (best to have your DL number).
2) You need the previous years 1040 (adjusted gross income), otherwise you will have to fill out FORM 8453-OL (this is how the IRS verifies your signature).
3) You will need a credit card if you want to file electronically.

***You can still file without your 1040 from the previous year.

I’m not sure if I wait for the IRS to send me FORM 8453-OL, or I call the number provided for the IRS. I suppose I will just wait to see if I get my direct deposit. 8-[

ToSeek
2005-Feb-01, 02:42 PM
I've used TurboTax to file electronically for a few years now. It keeps track of a lot of stuff for you and makes sure you don't miss anything, so I'm pretty happy with it.

Wally
2005-Feb-01, 03:18 PM
I've been tempted by their commercials (and now their website as well, thanks to your link Candy), but one of my friends from high school is a CPA around here and has been doing my taxes for the past 4 years or so. I'd feel guilty dropping him for some nifty software. . . :-?

TriangleMan
2005-Feb-01, 04:02 PM
Firstly I would advise reading many product reviews before purchasing any tax software. I have no experience with Turbo Tax but generally tax software is very handy for straightforward tax returns. If you have a complicated tax situation (small business, complicated investments, foreign income, rental properties . . . etc) you are likely better off sticking with a qualified accountant to work on your tax return rather than using software. If you're not sure try to find a computer store that will show you a demo of the program (or download it if available) to see if it suits your needs.

I'd also like to take this time to rub in the fact that (non-US) residents of Bermuda do not have to file any personal tax returns at all so I don't have to worry about it. :P

Wally
2005-Feb-01, 05:40 PM
Firstly I would advise reading many product reviews before purchasing any tax software. I have no experience with Turbo Tax but generally tax software is very handy for straightforward tax returns. If you have a complicated tax situation (small business, complicated investments, foreign income, rental properties . . . etc) you are likely better off sticking with a qualified accountant to work on your tax return rather than using software. If you're not sure try to find a computer store that will show you a demo of the program (or download it if available) to see if it suits your needs.

I'd also like to take this time to rub in the fact that (non-US) residents of Bermuda do not have to file any personal tax returns at all so I don't have to worry about it. :P

:evil: :evil: :evil:

Them's dern near fightin' words this time a year buddy!!!!

Jim
2005-Feb-01, 05:50 PM
You are aware that the IRS has agreements with many e-filing companies - including TurboTax - that will allow you to file online at no charge?

http://www.irs.gov/efile/article/0,,id=118986,00.html

TriangleMan
2005-Feb-01, 06:06 PM
Here's a list of software and company sites (http://www.irs.gov/efile/lists/0,,id=101223,00.html), including Turbo Tax, that the IRS provides if you want to try e-filing your return.

Doodler
2005-Feb-01, 06:43 PM
I've used it three times with no negative aftershocks, so I'll support it as reliable. I still prefer to mail in my payments, if there are any. MAKE SURE YOU UPDATE YOUR TAX TABLES BEFORE USING THIS. I have seen others burned because they don't update everything ahead of using it to file. My typical time on these were about 45 minutes to do both state and federal.

Last year, I did the telefile for Maryland and Federal taxes and that also worked like a charm. It literally took me 30 minutes to do both.

Candy
2005-Feb-01, 08:01 PM
You are aware that the IRS has agreements with many e-filing companies - including TurboTax - that will allow you to file online at no charge?

http://www.irs.gov/efile/article/0,,id=118986,00.html

A few points are worth noting. For instance, if you qualify, you can prepare and file your federal tax return using Free File. But you may have to pay to file your state return. You are under no obligation to buy any products or services. When choosing a company, be sure to link to their Web site through IRS.gov. By going directly to a company's Web site, you may not get the free offer.
I can't remember what the breakdown for my taxes were... I took this plan *Only $9.95* Federal & State-additional charge. I paid extra for the State, which sounds similar to the IRS's. The $9.95 fee ends 2/13, then it shoots up an additional ten bucks.

I think I'll try the IRS's next year. :D

Waarthog
2005-Feb-01, 08:51 PM
I swear by Turbo Tax. It has been a godsend for 4 years. Especially since I usually have to file in more than one state (this year, it will be three), I own a house, have some tax deferred/exempt retirement accounts and some other investments. Keeping track of it without the help of a CPA gets daunting sometimes, but TT does me right every year.

Candy
2005-Feb-01, 09:10 PM
I've been tempted by their commercials (and now their website as well, thanks to your link Candy), but one of my friends from high school is a CPA around here and has been doing my taxes for the past 4 years or so. I'd feel guilty dropping him for some nifty software. . . :-?
You don't have to download anything to your computer. You should just try it for fun.

You can go through the entire program without entering a credit card. You only have to pay if you decide to file with them.

It calculates your return/payment as you go through the steps on the upper righthand side.

You should try it, and compare it to what your CPA finds, then tell us. 8-[

frogesque
2005-Feb-01, 09:17 PM
We have a very simple tax system in the UK - The government owns you!

Actually I do run my own business but I'm only 3 minutes from the local Inland Revenue Tax Office so I just fill in the forms and and hand them in. Providing you don't try to pull a fast one the staff are always very polite and helpfull. We can also do on-line filing but it takes a few days to set it up (they send a separate PIN Number through the post).

Most folk here don't have to do a return as Income Tax is collected by employers under PAYE (Pay As You Earn). Local taxes (Council Tax) are collected by the Local Authority and are banded according to property values. Other taxes like VAT; fuel, cigarette and drink excise duty etc, are mainly collected at point of sale or distribution and passed on to the customer. Finally, if that lot doesn't get you and you have anything left there's always Death Duty which is levied on probate :lol:

Sammy
2005-Feb-01, 09:27 PM
I've been using TurboTax (and it's predecessors) since the 1980s and never had any probs of any kind.

CONTRARY to an earlier post, it is the ONLY way to go if you have a small business and/or rental property. I have had both, and currently (along with mywife) have two home-based small consulting operations. Either the Deluxe or Home and Business version handles everything with ease and simplicity. It walks you through everything you need to do.

Mars
2005-Feb-02, 03:55 AM
Awesome! I used it four 3 years now!

Enzp
2005-Feb-02, 07:35 AM
I used to use an accountant. I own a small business. One year I faxed over my stuff for them to finalize my return, and after calling the next day having gotten no reply, they informed me that their fax machine had run out of paper and they never got my data, and now they would not be able to get it in on time. So I ran to the store and bought Turbo Tax.

I never looked back. Turbo Tax is great. It organizes things and fills in all the blanks. It asks me about things I might have overlooked. And I am not using the whiz bang business version, I am just using deluxe.

One very nice feature is that if you use QUick Books, it will transfer the needed data from that right into the tax software. Quick Books by the way is very simple to use and intuitive. Great for the non-accountant.

You can remove this years Turbo Tax from your computer, but it will leave behind a small file with the numbers, so next year, install the new Turbo Tax, and it will go back and fill in all last years info for you. I don't even have to dig ou tlast year's 1040. One keystroke.

Michigan is urging people to efile. The first year or two I used Turbo Tax, I printed the return and mailed it. page after page. Then I tried efile. Once again I will never go back. Michigan is having budget trouble, so staff levels are down, and things get backed up. Last year people filing by mail on 4/15 were told to expect 6-8 weeks for their refund checks and many waited far longer. My efile return got my direct deposit refund in my bank WITHIN A WEEK.

State Turbo Tax here even includes CIty returns. I can file my Lansing return from Turbo Tax.

Take a chance on $30-40 and try it. You can always do it by hand if you feel unsure. Look around, you can usually find it for sale with free State Turbo thrown in. EVen if you don't efile, when you print out the return, there is a sort of fancy barcode thing added at the top of the pages that the IRS scans in rather than hand entering the data, so there is less liklihood of errors. The barcode digitally encodes all the numbers on the page.

It may take more than an hour the first time, but I think a lot of that time is spent finding your numbers to plug in. If you are prepared it is simple.

DO it.

cyswxman
2005-Feb-02, 08:13 AM
I have not used any tax software as of yet. I've just done my own since it is relatively straightforward for me.

TriangleMan
2005-Feb-02, 12:14 PM
I've been using TurboTax (and it's predecessors) since the 1980s and never had any probs of any kind.

CONTRARY to an earlier post, it is the ONLY way to go if you have a small business and/or rental property.
:o While it is good to hear that the software can readily handle more complicated returns I must disagree with your statement that it is the "only" way to go. For some with complicated situations it could even wind up being costly.

I will caveat that I have no expereince with US tax and the structure of its tax code. I have completed hundreds of Canadian tax returns so I'm assuming that fundamental aspects of the two countries tax codes are similar.

In a complicated tax situation there may be more to it then saving some receipts and putting some numbers on a return every year, with proper planning and guidance a person can save or defer significant amounts of tax. While I'm sure software such as TurboTax is great for handling returns, and if a small business maintains its records in a program such as QuickBooks where the data can be transferred, then it could be suitable. But will it tell you at what point you'd be better off incorporating your business as a company since you've reached an income level that you'd pay less tax as a corporation? How about advice on providing a reasonable salary to the spouse for their assistance with your business? Will the software provide a strategy for paying yourself out of a shareholder account with an offsetting year-end dividend to take advantage of lower tax rates for a certain level of dividend income? Will TurboTax ever look into possible advantages in setting up a trust for your kids in which part ownership of your business can be transferred so that part of your business income can go directly to your children? Depending on your tax situation and the size of your businesses these could be significant issues.

I'm not saying that anyone with a small business or other complicated personal finance issues should never use tax software, however I certainly wouldn't say that software is the ONLY way to go. With proper tax planning and advice some people could potentially save or defer thousands of dollars in taxes. That's why a qualified tax accountant needs to spend years learning the in's and out's of the tax system, in order to provide proper long-term tax planning as well as to assess a client's financial position to determine if there are any potential ways of saving on tax that the client did not know about.

(Has anyone heard from AliCali? He could probably point out specific planning issues for US taxpayers that software likely wouldn't cover.)

Candy
2005-Feb-02, 01:15 PM
While it is good to hear that the software can readily handle more complicated returns I must disagree with your statement that it is the "only" way to go. For some with complicated situations it could even wind up being costly.

I will caveat that I have no expereince with US tax and the structure of its tax code. I have completed hundreds of Canadian tax returns so I'm assuming that fundamental aspects of the two countries tax codes are similar.
TriangleMan, you might want to look at the free demonstration from the TurboTax link? :wink:

I just got my confirmation's via email. When I went back to the website to confirm receipt, it reminded me and had ready the form I need to send to the IRS as my signature (since I didn't have last year's 1040). 8)

Money, money, money! \:D/

It's good to be finally reap the reward of being a first time homeowner. :D

Wally
2005-Feb-02, 01:59 PM
Candy. If you're getting tons back this year due to interest on your mortgage, strongly consider modifying your W-4 to increase your federal exemptions. No sense letting the guv'mint have your $$$ all year instead of you!!!

I currently have my fed exemptions set at 3, and I still get a little chunck back come tax time, but not the several thousand one friend of mine "proudly" receives every year. #-o

(he acts like he won the lottery every year when he gets his check. . . :roll: )

Bawheid
2005-Feb-02, 02:05 PM
Candy. If you're getting tons back this year due to interest on your mortgage, strongly consider modifying your W-4 to increase your federal exemptions. No sense letting the guv'mint have your $$$ all year instead of you!!!

I currently have my fed exemptions set at 3, and I still get a little chunck back come tax time, but not the several thousand one friend of mine "proudly" receives every year. #-o

(he acts like he won the lottery every year when he gets his check. . . :roll: )

I think this is exactly what Triangleman meant, there is always something to consider which won't be picked up by a programme however good.

Candy
2005-Feb-02, 02:05 PM
I currently have my fed exemptions set at 3, and I still get a little chunck back come tax time, but not the several thousand one friend of mine "proudly" receives every year. #-o
How can you do 3?

I claim 0 now. I could do head-of-household and single, giving me 2.

This is a good idea, Wally, now that I took a 10% paycut. :o

Candy
2005-Feb-02, 02:08 PM
Candy. If you're getting tons back this year due to interest on your mortgage, strongly consider modifying your W-4 to increase your federal exemptions. No sense letting the guv'mint have your $$$ all year instead of you!!!

I currently have my fed exemptions set at 3, and I still get a little chunck back come tax time, but not the several thousand one friend of mine "proudly" receives every year. #-o

(he acts like he won the lottery every year when he gets his check. . . :roll: )

I think this is exactly what Triangleman meant, there is always something to consider which won't be picked up by a programme however good.
I wouldn't even have picked this up, nor H&R Block (which did my taxes last year). :-?

TriangleMan
2005-Feb-02, 02:14 PM
TriangleMan, you might want to look at the free demonstration from the TurboTax link? :wink:
No way. I don't need to file tax returns anymore so I'm through looking at that stuff. Just because I'm an accountant doesn't mean I actually like tax returns! :)

Sammy
2005-Feb-02, 05:18 PM
Sorry TriangleMan, but you are just dead wrong on several points.

TurboTax does deal with every complexity of a small business/rental property scenario. I had rental property, I had a small inventory-driven business, and I now have a consulting service business, as does my wife. The program goes into exhaustive detail in its "Interview" mode to capture all the needed data info and raises multiple scenarios and possibilties. And I DO NOT use Quickbooks or any other accounting software except Microsoft Money to track personal expenditures and occasional purchases for the business.

RE subpart S corporations, it is NOT the way to go for most small businesses. Sole Propietor (Schedule C) works best for the VAST majority of small operations. TurboTax does raise that issue, and will generate the needed forms/data if you do incorporate. When I started my first small business in 1986, I checked out the options very carefully, decided against subpart S, and then went to a professional tax accountant who verified my decision.

It may be different in Canada, but in the U.S., incorporation presents NO advantages for the small business operator.

TriangleMan
2005-Feb-02, 06:08 PM
Sorry TriangleMan, but you are just dead wrong on several points.
Fire away! 8)

TurboTax does deal with every complexity of a small business/rental property scenario. I had rental property, I had a small inventory-driven business, and I now have a consulting service business, as does my wife. The program goes into exhaustive detail in its "Interview" mode to capture all the needed data info and raises multiple scenarios and possibilties. And I DO NOT use Quickbooks or any other accounting software except Microsoft Money to track personal expenditures and occasional purchases for the business.

I have no problem acknowledging that the software must do an excellent job in most situations, if it didn't the IRS would be leery of people using it, and I'm sure the company that makes TurboTax has made a huge effort to ensure that its product is exemplary. That in itself does not change my opinion that people with complex tax situations should be careful when deciding on using software over a CPA. I am skeptical that TurboTax deals with "every complexity" as you have asserted and I'd be surprised if the company would ever make that claim. However, I'm sure it is a great tool for most people.

Not being knowledgable of US tax I did a quick websearch and found articles by Forbes (http://www.forbes.com/personalfinance/taxes/2004/11/03/cx_sr_1103taxes.html), the San Jose Business Journal (http://sanjose.bizjournals.com/sanjose/stories/2004/01/19/focus1.html) and a financial planner for iVillage (http://home.ivillage.com/homekeeping/homefinance/0,,nrm3,00.html?arrivalSA=1&cobrandRef=0&arrival_f reqCap=1&pba=adid=13728510) and they generally say the same thing, software is great for general returns but more complicated returns you may be better off with a CPA.

Interestingly the San Jose article mentioned a Texas Tech study discussing disadvantages to using software. I couldn't find the study itself but found an article (http://www.chron.com/cs/CDA/ssistory.mpl/business/buggs/2288839) on it here. I couldn't find any other study which attempted to replicate the results so I'm not lending too much credence to it but it may be of value for anyone using tax software this year.


It may be different in Canada, but in the U.S., incorporation presents NO advantages for the small business operator.
Noted. My list of items in the previous post were examples to make a point about long-term planning rather than a listing of specific US tax advantages. I will take your word on incorporation from a US tax standpoint as I'm not really all that interested in the specifics of US tax law.

Candy
2005-Feb-02, 06:13 PM
I will take your word on incorporation from a US tax standpoint as I'm not really all that interested in the specifics of US tax law.
Does Canada have a TurboTax equivalent? If not, jump on the opportunity, you could make a mint. :)

TriangleMan
2005-Feb-02, 06:34 PM
Does Canada have a TurboTax equivalent? If not, jump on the opportunity, you could make a mint. :)
QuickTax is a popular Canadian tax software. I think was developed by the same company that makes TurboTax. (not 100% sure on that though)