Looking for opinions on TurboTax. I have heard about it but don’t know anything about it. Some acquaintances are recommending the wife and I use it, but I dunno.
An accountant, an ex-IRS official, does our taxes for $250. We both have regular taxable income in the US as well as foreign income and investment income. Our federal and state income tax forms always total a combined 40-something pages.
Is TurboTax really free? I’ve heard there are some fees to pay. Would TurboTax be as simple as it’s made out to be if our taxes are so complicated?
I have been using TurboTax since the early 90s and I like it a lot. It’s only free for people with very simple tax situations which yours is not. You will have to pay but it will be less than an accountant.
It is very easy to use. You just answer the questions that it asks and eventually you are done.
You will not qualify to use the free version, but you can get started for free with the online version, and if you don’t like it, you’ve only wasted time. You will have to look at a table of what the regular, deluxe, and premier versions cover, and buy the one that is appropriate for your needs. The last few years I’ve been buying it at Costco, but it is occasionally just as cheap on Amazon and other places. It is usually the most expensive directly from Intuit.
The one time I had somebody do my taxes it cost much more than $250. Maybe I got ripped off, but if yours are complicated, then $250 seems pretty good to me, as you’ll probably be spending at least $60 on Turbo Tax, plus 2-3 hours minimum to enter it. That’s starting from after you’ve collected and organized all of your information. If you’re extremely lucky, Turbo Tax will be able to directly download your forms from your employer, bank, broker, etc.
So, if even though you have lots of sources of income, you’re basically just adding them up, applying the standard deduction, or a few normal ones, and doing the math to see what you owe, then Turbo Tax might work for you. If you hate things that are deliberately obtuse, extremely detail oriented, and with a (very remote) threat of severe penalties if you get something wrong, then stick with your accountant.
I did have a tax guy in Thailand, an American who lived in the North, dividing his time between there and Washington, and he charged only $100. Then he retired, and my current guy I got off a list at the US Embassy in Bangkok. He’s here in the US, so maybe that’s why he’s charging more than the guy in Thailand.
I’m a lazy bastard, and if I have to pay $60 and maybe more anyway, then that’s going to be less than $200 to save me at least a couple hours’ time. Probably I would always have a nagging suspicion that I wasn’t doing something right and thus was screwing myself over. Will still take a look at TurboTax and am still interested in everyone’s experience with it though.
I usually just do mine by hand, but I’ve used both Turbo Tax and H&R Block’s software. The latter was cheaper and worked pretty much the same way. No foreign investments though so YMMV.
I used Turbo Tax for more than a decade, but then my taxes got kinda complex and I switched to a professional. Just based on your comments, I’d lean toward keeping your live preparer.
I don’t think that alone indicates complexity. My tax return is fairly simple (enough that I used the free online version of TurboTax last year and I think the final versions with all of the forms was close to forty pages. But I never printed anything out. That was just what the PDF document was. Given the particular complexity of your situation, I wouldn’t fault you for hiring someone to do your return, particularly as you chose someone familiar with the Thai tax laws. The $250 you paid is probably worth it for the peace of mind.
I use H&R Block’s TaxCut, but TurboTax should work just as well.
For most users, neither one is essential, but they are nice to have. They more or less walk you through filling out the forms, prompting you along the way to consider options that you might otherwise have missed, and keep you from making arithmetic errors. This turns a long evening’s work into a half hour to 45 minute job.
I have used TurboTax for at least 25 years. I have long- and short-term capital gains, interest, dividends, itemized deductions, have had rental property, passive income, and also done my MIL’s taxes including a foreign bank account.
I also use Quicken, and Turbo Tax can import data from Quicken, greatly speeding up the process (if you keep everything up to date in Quicken all year long).
Turbo Tax can handle just about every situation. However, even though it can walk you through everything, it is possible to make mistakes or omissions in Turbo Tax and get a false sense of security. It’s good but it’s not magic. For best results you really have to understand all of the tax rules that apply to you and all of the required forms and what the information means.
You are not charged for the service until you attempt to actually file or print the paperwork. I recommend this year that you set up an account (setting up the account is free). Take your time and go through the whole process of entering your income, listing your deductions and liabilities and the whole nine yards. The whole time you’re working on it, there will be a running tally in the top left corner of the screen that says how much tax you have to pay (or how much your refund will be…). So when you are all done entering everything, it will say what your total bill/refund will be. It will also tell you how much their fee will be to proceed. If you don’t submit anything, then you don’t have to pay a cent. Now, go to your normal tax preparer as usual. Compare the results.
This way, you will have a good feel for the level of difficulty in using TurboTax, and you will know if it is going to save you money and, if so, whether it’s worth the hassle.
$250 seems like a very reasonable price considering your situation.
The free software only give you federal free, state returns cost extra. And then only free if your income fits a certain limit (about $66,000). In many situations learning to do it yourself is better. But your situation seems like it might be safer with a professional.
TurboTax is owned by Intuit so I personally dislike them (monopolist jerks). There are many competitors, which don’t make inferior products necessarily.
Thanks again for all the responses. I feel I will probably stick with our accountant. Hey, he sent us an e-Christmas card this year, so I would hate to disappoint him. But I do like the idea of setting up a TurboTax account just to compare the results with what the accountant says and may do that. Then I can decide whether to go with TT the following year.
So we used our accountant, who filed our taxes over the weekend. I blew off shadowing him on Turbo Tax, I just didn’t have time. But I’ll tell ya. Initially, the accountant said we would receive a $45 refund from our federal taxes but have to pay $490 for our state taxes. But then he did some digging around and told me he found some sort of foreign tax credit from our 2012 (!) return that could be rolled over to the wife’s Thai-government pension for 2018. And while we still have to pay $490 to the State of Hawaii, our federal refund increased from $45 to $910. Wow! Good man. I don’t believe I could have uncovered this via Turbo Tax. I still don’t understand what this magic was that he worked, but he earned his $250 this year. 2012 was even before we started using him.
We’re not worried about the state tax. The wife’s Thai pension does not undergo withholding of course, but she sets aside a portion each month as an informal withholding, so we have that covered.
I use Turbo Tax for the ‘Import’ feature allowing me to import my tax related investment portfolio (interest, sales, capital gains, wash sales, etc) from my financial institution. I don’t have huge investments but without the import feature, I would have about 10 tax pages to complete that may change my refund or amount due by about $100.00.
Late to this party, but I used Credit Karma this year. It was completely free for both federal and state taxes, and it didn’t matter how complex or simple things were, or how much money I made.
My company had been doing my taxes since 2009 due to international assignment situations, and I’d always, always used TurboTax (né MacinTax), but that seemed wasteful this year, since, holy cow!, taking the standard deduction was better.
Presumably you gave him a copy of your 2012 (or newer) return when signed on with this guy, and included with it was a foreign tax credit carryover worksheet. The foreign tax credit is a dreadfully complex beast, and there are two possible scenarios each year: You either paid more in foreign taxes than you are allowed to take as a credit this year based on the percentage of your income that’s foreign, your total income, and your US tax bill before the credit, or you paid less in foreign taxes than you are allowed to take for the credit. These situations can offset each other in future years, allowing you to make use of the excess limit or the excess taxes in years where the opposite is true. For most people this never happens because they tend to be in the exact same situation every year. But perhaps with the change in the US tax law this year, things are different.
Based on the above, I definitely recommend anyone who has significant foreign-source income (more than you get as a retail investor with 25% in international stocks) to use a professional and to get them every tax return you’ve filed with that foreign income. If you have a professional that worked that hard for you and you only pay him $250, be very glad. My firm’s base rate for people that come to us is $300, though obviously we assume that something complicated’s going on (or they are extremely lazy) if they’re coming to us instead of doing it themselves or going to H&R Block. While some people pay $250, they would generally have a somewhat simple return. The only way to get less than that is to piggyback on a more expensive return and have an extremely basic return. Most people pay more than $300, but obviously most people coming to us either have complicated returns that they don’t want to do themselves or they make so much money that our fee saving them an hour or two of work is very profitable to them. There’s a lot of people that balk at our prices, but we have plenty of work based on what we charge so we’re not particularly sad to not get a new client because we charge so much.
For reference my firm is in the Northern Detroit suburbs and has 6 employees: 3 CPAs (of which I am the junior by cert date), one in training, one secretary, and one semi-retired person who mainly just fills for the secretary when needed (she theoretically does some accounting work still, but very little). It has been around owned by the current family since around 1980, and has quite a few clients who have been around from the beginning. Most of the returns we do by raw numbers are very simple and are mainly rich lazy people, though by time it’s mainly those with businesses.
Bumping my thread to say I love our accountant, mentioned earlier in this thread. He just finished our returns for the tax year 2020. This year we’ll get a smallish refund from federal while making a smaller payment to state, so a little bit of a surplus.
BUT … The wife just became a US citizen last October. The accountant started thinking about that, then took a closer look at the tax treaty between the US and Thailand. He discovered the wife’s Thai pension probably should not have been taxed at all while she was just a permanent resident here, so he has compiled amended returns for the past couple of years, which we are submitting. We expect to receive an extra $875 total for those on top of what we already got back previously.
I think TurboTax is probably good for some people, but I would not give up our accountant.