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Income Tax prep software?


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Typically we've used the services of an accountant, and have been pleased with the results. This year however, we need to go it ourselves. What software do you recommend and why?


Many thanks,

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Been using TurboTax for years. Easy to navigate and it automatically retreives my information from last year's return. I honestly haven't tried other software, so I can't speak to those. Depending on your income level, you can even get free stuff.



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And another vote for Turbo Tax. We quit doing them by hand when we bought our house. Never had any major problems, but we don't have anything very complicated to report.


We have not, however, tried Tax Cut, so I can't speak to how it works.



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John Ranalletta

With no basis for comparison, I would recommend TaxCut. Likely, if one's income is solely W-2 based with no or few uncomplicated, outside sources of income (rents, K-1, 1099, etc.), any of the packages and online services would suffice.


Your 401k or mutual fund provider may offer online tax prep at low or no cost like Vanguard.

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Another one for Turbo Tax.


Brings forward my info from last year. Being retired, our income is pretty straightforward as are my deductions.


Don't know how it works for self employed folks such as yourself.

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Silver Surfer/AKAButters

Another Turb-tax fanboy here. I have been using it for the last 7 years without a hitch. I like the way it walks you through the forms, points out possible additional deductions you might be overlooking, and performs an assessment comparing your return with similar returns for possible audit flags.

Good tool.


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Like most of the others, TurboTax. It imports not only last year's tax return info, but W2s, and statements from many banks and brokerages.


If it's good enough for Tim Geithner, it's good enough for me. :/

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I've used TaxAct for past 8 years mostly to keep from doing it by hand and for electronic filing and it pulls the stuff from previous years return for comparison and lessens the amount of typing.


I don't have an overly complicated return, I itemize mortgage interest and property tax and get the forms for some investments, some charitable donations and that's about it.

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Another vote for TurboTax. I've used it for.......ever, so I cannot offer any comparison to the others out there.


I guess the fact that I've never even thought of changing horses is the best endorsement I could give.

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I've used Turbo Tax forever as well. It does annoy me that they change the user interface every year. Clearly they need to change the back-end, but leave the stinking interface alone.


That being said, the functionality is good.

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Joe Frickin' Friday

I've used TaxCut since '04. Have not used others. Don't know if it's the best or worst, but it seems to work OK.


No matter what software you pick, sticking with it in subsequent years is attractive, since it automagically pulls up a lot of info from previous years, saving you a bunch of repetitive data entry. The flip side of that is that no matter what you pick, the first year may be tedious since you have to manually enter all of your personal info. OTOH, it's better than writing stuff out by hand...

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Like many others I have used TurboTax for many years and have no experience with others. It has handled, gains and losses, dividends and interest, self-employment income, home office, K-1s, child care credit computations, AMT, hobby income and expenses, depreciation, etc. without a hitch. I was even audited without change for 2004 (third time in my tax paying life). :)

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I used to use Turbo Tax but about four years ago I tried 3 different ones to see which I liked best and gave me the best return. I used Turbo Tax, TaxAct, and HRBlock. I ended up going with the online HRblock and have kept with it for the past 3 years. I like it because I don't have to buy and install any software just login. It keeps the previous years info. I used to use the online TurboTax and also like it just started using HRblock and have been happy.

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I've always paid someone else to do my tax returns. I would like to be able to do my own. I'm considering trying Turbo Tax..My income comes from salaries, pension, dividends, interest, farm, and gains/losses from the sale of stock and mutual funds.

I have many years of stock losses to carry over and still a few items to depreciate from the farm..I do not itemize..Should I continue to pay others to do it or is this a return I could do myself? How diffficult is the program to use?

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TurboTax is insanely easy to use. Our return is pretty simple and I can generally get through it in about 20 minutes. It was somewhat more involved when I was self-employed and dealing with all of that extra BS, but still very easy. It's a wizard-based system that walks you through the process asking about your various sources of income, expenses, etc. There are videos included that explain things, there's a very good help file, and I believe you can call them directly and ask questions if you need to.


At the end, it'll handle the e-file for you, show you suggestions on how to reduce your tax burden in the future, etc.


One option if you wanted to try it out....do your return yourself with TurboTax and then take your stuff to your regular tax preparer and see how they compare. That'll be pretty cheap (I seem to recall that TT is less than $50) and gives you a good way to try it out.


I've been using it for more than 10 years and every year it seem to get easier and faster.

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Another happy Turbo Tax user for 10+ years. The wife has a business and it really does simplify our taxes. There are other options that have been mentioned, but we've stayed with what works well for us.

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Nice n Easy Rider
One option if you wanted to try it out....do your return yourself with TurboTax and then take your stuff to your regular tax preparer and see how they compare.


I did that one year (at my wife's insistence). After she saw that I (and TurboTax) found more deductions and got more back than the 'professional' tax preparer she sat back and let me (and TurboTax) handle it from then on.

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I assume you have to buy a new version each year????????

How do you save your return for use next year??


Yep...buy a new version each year.


You can save your return in the TurboTax electronic format and/or you can print it out. I usually do both.



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$50 dollars will buy a nice pair of riding gloves, just say no and do as I do--prepare your own return and use the paper forms/booklets.


I'm POSITIVE that I'd spend MUCH more time doing it that way than going through Turbo Tax.


And I wouldn't get the "Audit Alerts", accuracy check, and other helpful tips that Turbo Tax provides.

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I was a Turbo Tax user but switched about 3 years ago to Tax Cut because of a lot of bugs in Turbo Tax especially when you try out different tax scenarios. Also Turbo Tax used to install spyware on the computer to monitor licensing usage (and some argue that it was much more). Do a google search on "Turbo Tax spyware" and be prepared to be overwhelmed. The spyware could not be uninstalled using normal methods and needed a lot of manual cleanup to get rid off.


No software is bug free but I have encountered relatively fewer bugs with Tax Cut.


Disclaimer: I have no association, financial or otherwise, with either Intuit or H&R Block.

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........especially when you try out different tax scenarios.



Is there more than one way to do my taxes correctly? :eek:




Just kidding, of course. It's my understanding that the form you file is merely the first round of negotiations.

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........especially when you try out different tax scenarios.



Is there more than one way to do my taxes correctly? :eek:




Just kidding, of course. It's my understanding that the form you file is merely the first round of negotiations.




But that being said, I am a tax accountant by trade and there is nothing wrong with using third party software to prepare your return. It is *not*, however, a replacement for a good tax accountant (either an EA or a CPA whose business is tax prep). I have several clients who do their taxes with turbo-tax and bring it in for a 'cheat-sheet' while we do the return. I have been caught out once or twice in my 15 years of practice, but on the whole I prevent a lot more mistakes than I cause (knock-on-wood).


The main limitations to using tax prep software are GIGO and plain lack of knowledge of tax law. The programs will create a fine return if you truly understand the ramifications of al lthe questions they ask you. However, if you have a multi-state issue, depreciation recapture from years prior to your use of the software, NOL carrybacks, etc, they virtually never do the return right. It is not the fault of the software, really, it's just that a competent tax accountant will see evidence of a tricky tax issue in the numbers and know to ask you about it where the software generalyl doesn't. Also, the audit check feature is severly limited as your local tax accountant is going to know far more about your local IRS office's current target programs than your software does.


If you truly want to do your taxes yourself, then I would adise you to first go to a professional (preferably personally referred to you by a peer with similar socio-economic status) and ask lots of questions so that you understand the ramifications of your particular tax situation. Then so long as your financial and tax situation stays similar and you are willign to keep up on tax changes via internet/newspaper, then you should be able to handle your returns without too much dificulty.



I would *not* recommend you do your return yourself if you fall into the following categories:

1. You own your own business (Sch C, Subchpt S, LLC, LLP, 1065 Partnership)

2. You earned income out of state of out of the United States

3. You sell property (real or personal) which was ever used in a trade or business - even if you havent had the business for a long time -- this includes real property that has ever been used as a rental, even if you subsequently moved into it or converted back to personal use, such as vacation property

4. You own rental property

5. You own farm land

6. You are the beneficiary of an active estate or trust

7. You are partaking in any kind of property tax relief program (usually administered by localities)

8. You worked multiple jobs during the year or received any income as a contractor (1099 misc)

9. Anything substantial changed from year to year

10 You are, or have been, subject to Alternative Minimum Tax

11. You receive stock options as part of your compensation package

12. You receive a per-diem


The above list is *not* all inclusive, but contains the most common pitfalls I have encountered by tax payers using third party software.


NOTE: I do not warrant tthe accuracy of any infomation contained in this post, consult your tax advisor, blah, blah, blah...


A final note...


The test of a tax professional is NOT how much money he saves you, but rather, if he prepares a return properly. There are MANY unsettled areas of tax law and only someone who deals with hundreds of returns a year and is intimately familiar with current IRS opinions on the law is going to help you negotiate this uneven terrain.


A tax professionsl that you develop a good realtionship with will bring a LOT more to the table than just his ability to use tax software, however. This is a person who you can bounce ideas off of, ask al lthe dumb questions that you wish you could ask, take your calls in the off season before you decide to do something like buy or lease a car, and generally act as an interpreter in the arcane area of tax law.


All that being said - rock on!



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