Monday, March 30, 2009

Turbo Tax

I used Turbo Tax for the first time ever. The last few years we have been paying a CPA to do our taxes. He retired and sold his business so I thought that this year I could try Turbo Tax. I have the last few years of taxes as an example, so it made it even easier to do them. Last year was pretty much the same as the year before financially speaking, except for the hideous losses in our mutual funds, that is.

I loaded Turbo Tax on my computer and looked for updates (you should do this first thing! There were a couple of updates for both Federal and State). It asks you for your personal information (date of birth, occupation, dependents, etc). Once that is filled out you move on to the interview portion. It is divided into three categories: Wages, Deductions & Credits, and Other Tax Situations. In this section you can choose to 1) select specific topics, if you already know the income information that is to be entered; or 2) guide me through, which takes you step by step through each item.

In this section, there is a place that you can enter in your log in and pin for a participating employer to automatically download your W-2 information. If it worked, it would be really convenient, but it didn't work for me so I entered in all the information by hand. The categories in this section are: 1) Wages and Salaries; 2) Import your Tax Info; 3)Dividends and Interest; 4)Other common Income (1099); and 5) Investment income.

Then it takes you through an interview process where you answer questions and click in information. Fairly straightforward. All the information should be right on your W-2, and the questions also alert the program to other scenarios which may need special handling.

Each of those categories takes you through your W-2 and tells you which box to find the information. The program guides you through each step, and if you need help there is a help function. I was able to see other people's questions in a box to the right but was unable to see the answers. This may be a glitch in the program but you can also just open another window and go straight to the Turbo Tax webpage for help as well. Lucky for me that I have a relative who does taxes so I just called and asked my questions.

After the Wages section is complete, you move on to the next section which is Deductions and Credits. Here again it guides you through each item. This section has 10 categories which are: 1) Home; 2) Family; 3) Donations; 4)Cars and Other things you Own; 5)Education; 6) Medical Expenses; 7)Estimates and Other Taxes Paid; 8)Retirement Investments 9)Employment Expenses and 10) Other Deductions and Credits. Each category has a list of credits and deductions.

After this section is complete, the next section is Other Tax Situations which covers things like the Alternative Minimum Tax and a few other things.

The program will take you through a 4 step review, and a download for Audit support, should you get audited. That download was free with Turbo Tax Premier, which is the version I purchased. For an additional fee of $39.95, you may choose an option for a professional tax preparer to go over your return. I didn't choose that but it could be a good option for someone who had any questions or concerns. Now the Federal return is finished.

The Premier program also allows you to download one State filing for free as well. You choose your state and it will download the necessary forms. This time, the program puts in the information that you already entered from your w-2. It takes you through the screens just like in the Federal portion.

Once the State is finished, you have the option to e-file and print. The Federal e-file is included with the program, but to e-file the State, the cost was $19.95. I chose to pay the additional for the convenience, but you can print and mail it if you prefer. After you enter in the information for e-filing, the program will file your taxes and send you a confirmation email. Your refund (if you have one coming) will be direct deposited in your bank account in as little as 8 days.

I printed a hard copy for my records, and then I was finished!

Pretty easy, and I saved over $200 in tax preparation fees. The total cost for the program was $72.00 plus the $20.00 to e-file my state return.

If you haven't done your taxes yet, then you may want to consider Turbo Tax as an option--- I did see some negative comments about the program on the Consumer review site, but I have to say that my experience using this program was fine.

1 comment:

Moody said...

I've used turbo tax in the past with good luck. Our taxes are pretty complicated what with Mike's 2 businesses. I went to a CPA friend last year and probably will again this year because I HATE doing our taxes even with TT.