My income is mostly salary (W-2), but I do have some self employment income and depreciations from prior years. In addition I have a adult child in college that I support and deduct for.
Last time I counted my return ran 12 pages (Federal)
I use a pencil and a calculator.
I don’t see the point in spending 50-100 for someone else or some software to fill out a 1040, and schedules A, B, C and SE.
I find the instructions for the tax forms pretty easy to follow for my situation.
I did the same thing this year, but started out with TaxCut. After entering all the info identically, TC provided a lower personal exemption, lower child tax credits and a lower refund. Haven’t a clue as to why. I emailed TC and they couldn’t tell me why either.
I filed with TT and am getting a little over four grand, as opposed to $2500.
REALLY confusing.
I’ve been using TurboTax for the past 6-7 years. It seems to work well enough even for the occasional unusual situation: we had paperwork from an estate last year, that had to be input - schedule K1, I think - and we have a nanny so there’s childcare and household employee tax to deal with. We haven’t gotten audited yet…
However - I do print out everything and go over it with a fine tooth comb to make sure all my input numbers are there and correct. Once I’ve done that, I trust the software’s calculations. So far, so good <<crosses fingers>>
I have only used TuboTax, so I have nothing to compare it to. Since I’m happy, I am not sure that I have any reason to try something else.
That happened to us, too, actually. Each year I enter my info on at least two sites so as to check the results of one; last year we had a pretty big disparity between the end numbers. Turns out that one site, it seems, had problems with us living in one state and working in another; otherwise, sticking with the usual formula (i.e., federal plus one state) produced identical results.
TaxAct was the site that showed the accurate results, and I can’t recall what the other site was (or the third one we used to double-check the first two).
There are some key words in your post. You said you had not been audited “yet”. From what I hear, the Feds are losing their “kinder, friendlier” status these days and are ramping up the number of auditors as well as employing private companies to be collectors. The IRS is not going to accept that you printed everything out as a reason why you did not pay them what they say you owe (and YES, you DO have to prove that YOU are right). Personally, I want someone to call.
You also said you “trust the software’s calculations”. That is where I laugh at the Turbo Tax commercials. They guarantee the calculations. Great. Notice that they do not guarantee that you understand the questions you are asked well enough to have the right calculations used. Personally, I want someone to work with to whom I can say “what do you mean?” and get a response. “Ask the box” stops being funny when you are staring at the screen yourself. “Call the box” is even worse when you get that IRS letter.
Like I have said on another post, I also do not do my own dentistry, my own surgery, or fix my own transmissions, either.
I think the questions are extremely clear. If I need some background about the question or why it’s being asked, there’s always a little icon (a question mark? I forget) to click for more info. I’ve never had a problem understanding the question or why it was being asked, but would agree that if you do, it would make sense to have a live person doing the work. Assuming, of course, that their track record is as solid and error-free as the tax prep software companies’.
Wow, am I really the first person in this thread who uses H&R Block’s online service (unless that’s what BarnOwl meant by “H&R Block’s services”)? It walks me through every step, there are actual people available if I need help (for a fee, of course; so far I’ve never had to contact anyone), I can save at any point and come back later, and I can work on my taxes 24/7. In my jammies, even. 
The small filing fee is well worth it to me, and everything gets submitted electronically with digital signatures. I get PDF versions of my completed returns, which I save locally for my records.
I can’t imagine buying/installing software or taking my taxes somewhere, but then mine are pretty simple: W2(s), interest statements, and student loan/tuition stuff. I’ve been using H&R Block online for the past 4 years or so, and before that I did my taxes by hand every year.
True enough. However - verifying every single line on the return is a big part of making sure it’s correct. Nothing goes on that return unless it’s backed up by the original documentation (W2, receipt, whatever). If I put garbage on a return I prepare myself, I could provide that same garbage to a professional. In either case, I would expect to be caught, audited, and forced to pay up. In short: I take responsibility for everything on the return however it’s prepared.
As should anyone - whether they use a preparer, or the software. I personally know of a couple who used a tax preparer one year (and this was a private accountant, not a H&R Block storefront person with 3 months experience) and were was delighted to get a huge refund. A few months later they got a very scary letter from the IRS. It seems they got a duplicate of some income document (W2 or 1099). The accountant double-counted the tax paid… but did not double-count the income. So that big refund turned into a huge liability. Had they looked more carefully at their returns, this would have been caught. They’d have been better served, in their case, doing the returns themselves.
Yeah - you have to be able to read and understand the questions. If you don’t, then I won’t argue that it may be better to take your tax situation to a live person. As I wouldn’t hesitate to do (and have in the past) if I had anything unusual going on. I have a very slightly better-than-average understanding, growing up with a mother who was a tax accountant, and a brother who has continued in the family trade… and I know my limitations (as I was reminded when I screwed up a multi-state return in the early 90s).
As far as trusting the calcs - well, I do check that all the totals in the various categories are correct. Haven’t found any errors yet that weren’t explained by, um, operator error!
The closest I’ve ever come to an audit was pre-TurboTax - I didn’t file a childcare tax credit form (since I had a flex spending account, and therefore was not due a credit, I thought it was unnecessary). A 10 minute phone call sorted that out, and no money was due. TT would have filed the correct paperwork, as I found in later years!
Dentistry: check (unless you have a Dremel? :p). Surgery: check. Transmissions: check. But as a better comparison, you might do your own oil-change. That’s what I see as resembling a mostly-uncomplicated tax return. You might still want to take it to a pro (I let Jiffy Lube handle that!) but a lot of “civilians” can do it themselves with the right tools.
It all boils down to knowing one’s limitations, using the tools correctly, and checking everything.
Really? You have a software company with a track record for successfully fending off IRS audits while maximizing your return? :rolleyes: I prefer a tax accountant, myself.
Like I said in a previous post, I have been taken through the IRS code and shown places where it conflicts with itself in some areas and is “gray” in others. Simple questions and clicking on icons are just not going to take you through those.
As with others, I will stick with a tax professional. They earn their money. As mentioned elsewhere, mine is not a CPA. She is an EA and has a Masters in Tax. (Kind of like comparing a general practitioner with a medical specialist.) She works in an office that specializes in complex taxes. Even though it has “H&R Block” on the window, it also has the word “Premium”, so its not exactly the same. I think I will stay with it.