Not “who needs it” as in “bah, no one needs it,” but rather, actually asking, who needs it?
For example, in our family we just deal with straightforward salary, and take the standard deduction each year as it has never seemed as though taking itemized deductions would add up to anything near the standard deduction. So our taxes seem very straightforward. The most complicated thing I ever have to deal with is the result of my doing some independend contract work here and there, and that involves no-or-negligible business losses so it’s just schedule SE and C-EZ for me. (This is all IIRC.)
Do programs like Turbotax and HR Block have anything to offer someone in my position?
Or do you need to have a lot of, like, investment income etc for it to start to make sense?
There are various reasons, such as complex cap gains, farm ownership, jobs in multiple states, etc, but over the years the number one reason I’ve used it, is because I tend to make arithmatic errors (which can have serious consequences) and so it’s extremely stressful doing it and redoing it and redoing it and redoing it by hand. Similarly, for people who have trouble reading a lot of tiny type, Turbotax (or equivalent) is a lot easier to deal with.
But for various reasons my taxes have gotten complicated to the point where I just hire an CPA to do them now.
Although my tax situation is very basic, I find using TurboTax easier than filling out the paperwork on my own, so I’ll recommend it just for ease of use.
I am related to an accountant (albeit not one who focused on personal finances) who had to hire another accountant to help sort out an issue with stock options and the AMT. At the time, this was too complicated for TurboTax. So on the continuum of 1040EZ to whatever that mess was, I imagine there is a range where TT helps a lot.
I bought it once because I wanted to play out a bunch of “what if” scenarios, and it cost less than the time I would have spent building spreadsheets. Otherwise I would have done it on paper like I usually do.
This may be one thing worth either looking into carefully or paying money once. Itemizing being worth it can sneak up on people who never need it. State taxes and mortgage interest are the biggies. It can start kicking in around $100k income for a single filer paying state taxes. Obviously YMMV.
Yes to both… but it’s true something could slip by I imagine.
As it happens I do use turbotax’s online calculator to do quick estimates here and there, and I know it did take the Making Work Pay credit into account so there’s that… If I hadn’t already known about it, I would have learned about it then.
(Also it’s not like they sneak it past you. The MWP credit, for example, is referred to as a line item on the 1040 for 2010. I didn’t check on the telephone one.)
Yeah MWP was pretty hard to miss. The phone thing didn’t apply to me.
If you’re the sort of person who often has to pay others to notice things for you or remind you of things, then this is probably something to add to your list of expenses. For everyone else, don’t bother.
Well… I would agree with you if it wasn’t for the number of people who actually did miss it. If they hadn’t come into my office in later years for something “complicated” they wouldn’t even have known that they missed it.
Even TurboTax isn’t a guarantee that you catch everything. Probably 25% of clients who come to me with old TurboTax returns have missed the state sales tax deduction on their Sch A.
That’s intereting. I don’t doubt you but I just did my taxes and TT explicitly asked about it. My State income taxes exceed the sales taxes so it doesn’t apply to me. My shopaholic ex-gf when I did her taxes, not so much.
There is an intermediate step between purchasing a software package and just filling out the paper forms - you can go to an e-filing site recommended by the IRS and do your taxes online without needing separate software. I’ve been doing this since 2003, and I love it. I’ve recommended it to friends and family members with great success. Basically I fill in an online W-2, answer a bunch of questions (most of which I am able to skip) and the site spits out a return that they will e-file for me. I also have the option to print a .pdf and mail it in, but I’ve never done that. Initially I was able to do it all (state and Federal) for free, but eventually I crossed the income threshold and now have to pay $9.95. The site retains all of my information from the past year, so it keeps getting quicker and easier to file. I think the whole process now takes me about 30 minutes. Of course I have a very simple tax situation, but it sounds like yours may be similar.
TurboTax for me for the past several years. I have a few deductions, plus Massachusetts state income tax. The state allows you to deduct some things that are unusual (like travel to and from medical appointments, a certain amount of rent, etc.). I don’t know all of the ins and outs, so I use Turbo Tax.
This year I’ll probably use a professional – I screwed up a return in 2008* and can’t get it sorted out with the state. I’ll pay someone to fix that for me.
*****not the fault of Turbo Tax – I didn’t use the right damn form to show that I didn’t live in the state from January through May, so I was hit with a fine for not have health insurance in Massachusetts. Where I didn’t live. :smack:
Worth it to me for my charitable goods donations. Plus I have tons of investments. Not worth it when my daughter was in college and all she had was a summer job.
I used to buy the version without the state return, since you pretty much have all the information you need from the federal return printout. One year I was unsure and got the Deluxe version - and found that my hand done state return had me paying $400 more than I had to.
The first time you run into one of those worksheets where you do massive amounts of calculations only to find it winds up as $0 tax software becomes more useful.
I prefer the fillable pdf forms that the IRS provides. Fill them out, save them, print them out, and you’re good to go. If all you have is mortgage interest, property taxes, state and local taxes, tuition expenses and student loan interest, what’s so darn difficult? Gathering the documents takes more time than filling the forms. Paper may be old school, but nobody is going to hack my paper form.
It’s not that darn difficult, but neither is TurboTax that darn expensive. They hooked me when it was free for active duty military but now it’s worth whatever few bucks I pay. I like that it shows me what I did the previous year so I don’t even have to think. Takes me 10 minutes and I actually enjoy doing it because the software works so well.