Tax Prep Software

[mr_economy]

Gents,

This is the first year my parents aren't claiming me as a dependent on their taxes, and I'd rather not fork over a sizable amount of my much-needed tax return to their usual accountant. Do you have any recommendations for cheap/free filing? TurboTax Online Free Edition seems to be a good starting point, do you have any experience with that particular service?

My finances are basic. My only assets are a checking account, an online savings account, and a small Roth IRA retirement account, and my income is fairly small. I shouldn't need to itemize deductions either, so the lump sum deduction should be ok.

 

[Leche]

Well the 1040EZ is the easiest and utilizes a standard deduction. If your deductions don't exceed that standard then go with the 1040EZ.

 

[chainfire]

I used to use TurboTax Business/Personal Federal & State. I've since just switched over to a spreadsheet and the pdf fill-in forms. Nothing against TurboTax, but I just found it wasn't worth the cash to do something I pretty much kept on spreadsheets anyway.

 

[Leche]

Also the 1040EZ has income caps but they were pretty generous.

 

[funkyb]

Well the 1040EZ is the easiest and utilizes a standard deduction. If your deductions don't exceed that standard then go with the 1040EZ.

If you don't have enough deductions to make itemizing worthwild, just doing the 1040 EZ by hand is 100% the way to go. It's extremely simple.

If you need anything more complicated (but not so complicated that it's worth hiring someone - say if you run a business, work from home, have a house/mortgage interest, etc.), then I highly recommend just paying the $50 to use H&R Block's Online service. It's good.

 

[Amer]

Depending on your income, I used the free online TurboTax before getting a full time job, getting married, buying a house and making things complicated. I think it has an income cap on it though.

It's still going to fill you out a 1040EZ, but it will give you the assurance that it was the right decision by comparing what you would have got with itemized deductions. Again, you probably only need a 1040EZ. Even with my tax status getting complicated last year it wound up better taking the standard deduction.

I did use the full TurboTax last year as I received it for free. I really enjoyed using it.

EDIT: The other nice thing about using TurboTax, either the online version or retail is that once you have all that information in it can also fill out your state tax return very quickly.

 

[paulboeck]

I love TurboTax and have used it for a number of years now after paying an accountant $250/year for a couple of years. I'd definitely recommend it if you can get it for free. It may be overkill for you if the 1040-EZ would work, but it's great once you start having to account for a home, kids, investments, etc.

If you use the online version as I do, all your returns from prior years are available so you never have to go hunting for the old forms and the software will fill in data related to prior years in your current return where appropriate. The offline version may do the same, but I have no experience with it.

 

[Amer]

Paul,

That's another great reason to use Turbo Tax. There's always a box on the form that asks you what, if any refund you got last year (so they can tax it, of course) and I would always have to go and hunt down forms.

Turbo Tax will just re-import that information for you (even the standalone version, if you still have the files on your PC) or it will create printouts of your last year's forms so you can look it up if you used their product last year.

 

[richmondesi]

I used to prepare Taxes for a living. First, Tax refunds are not taxed the following year. They ask questions like that for other reasons. They also ask who is preparing your taxes if it's a paid service. The IRS uses certain information to determine if you should be targeted for an audit. Wild fluctuations, deductions in percentages outside of industry averages, who prepared your taxes, and many other factors increase or decrease the likelihood of an audit...

To the OP, as simple as your return is, I'd say use a free service if you qualify. All of the tax benefits of a Roth IRA are realized when withdrawals are made (meaning no tax break now). I'd never ever recommend H&R Block... Anything that they can do well, you can do very cheap or free yourselves. If you have an involved return, go to a GOOD accountant.

 

[Amer]

Thanks for the knowledge! I didn't know!

 

[texasPI]

Yes there is a cap for the free Turbotax but once you exceed it it only charges a small amount. Last year it cost me $10 whereas in previous years it was free. Not a deal breaker.

 

[garyg]

I used to prepare Taxes for a living. First, Tax refunds are not taxed the following year. They ask questions like that for other reasons. They also ask who is preparing your taxes if it's a paid service. The IRS uses certain information to determine if you should be targeted for an audit. Wild fluctuations, deductions in percentages outside of industry averages, who prepared your taxes, and many other factors increase or decrease the likelihood of an audit...

To the OP, as simple as your return is, I'd say use a free service if you qualify. All of the tax benefits of a Roth IRA are realized when withdrawals are made (meaning no tax break now). I'd never ever recommend H&R Block... Anything that they can do well, you can do very cheap or free yourselves. If you have an involved return, go to a GOOD accountant.

+1 Do not use H&R Block or any of the storefronts, if you made it through junior high (maybe grade school in most states) you can do the forms. I did my own for too many years to count, the one time I got audited was the one year I used a "Professional" because I had so much going on.