What Tax Software Do You Use?

r_jensen11 asks: "I know this topic has been asked at least once before, but seeing as how 6 years have passed, I figured the question is due again. It's about that time of the year again when we find out how much we owe Uncle Sam (or as in my case, how much Uncle Sam owes me). Software has changed drastically in the past 6 years, since the previous query I found on Slashdot, as well as many tax rules. Does anyone here use tax software other than TurboTax and TaxCut? I know that there are also online forms I can fill out, but which ones are accessible to people that use OSes other than Windows and Mac OS X? I'd preferably use a program that I can use off-line and store my information locally instead of using eforms, but if I have to resort to eforms, which ones should I investigate and which ones should I stay far away from?"

Comments

i'm old school

[east coast]

It's still pen and paper for me, just like d&d.

Re:i'm old school

[Menelkir]

I need to assume that pen & paper works better. But like ad&d and gurps.

H & R Block

[Anonymous Coward]

Have an accountant do your taxes. They're cross platform, less error prone, and in many cases charge about the same price as popular tax prep software costs.

Re:H & R Block

[alshithead]

"Have an accountant do your taxes. They're cross platform, less error prone, and in many cases charge about the same price as popular tax prep software costs."

As complicated as the US tax code is, this is the BEST advice for anyone above the poverty level. It is also why our tax code will not be reformed. There are way too many accountants out there who make too much money on handling taxes, and they support the candidates who will keep the status quo. Tax reform is very much needed in the US. I lean towards a flat tax or national sales tax.

Re:H & R Block

[dreddnott]

Yeah, H&R Block for me as well. My only mistake was in filing married, jointly.

Re:H & R Block

[woolio]

My only mistake was in filing married, jointly.

Hmm.... One can only wonder:

1) Was the mistake in filing as *married* when one is not?
2) Was the mistake filing *separate* returns with both marked as "married, filing jointly"
3) Was the mistake getting *married* in the first place?
4) Was the mistake in filling out the returns *jointly* (or not?) with (or without) one's spouse?

lol......

Re:H & R Block

[MindStalker]

Note!!! H&R block people are NOT accountants!! Sure they have accountants for dealing with buisnesses. But the people who the average joe tax return at H&R block are not accountants and are just trained to fill out the same form you would if you went to their online website...

In Florida the CPA association filed a advertising complaint against H&R block because several of their commercials implied their people were better than accountants "We'll catch the refunds that your accountant missed" and crap.

Re:H & R Block

[value_added]

As complicated as the US tax code is, this is the BEST advice for anyone above the poverty level.

The qualifier "for anyone above poverty level" applies especially to H&R Block. For anyone needing more, a qualified tax accountant is often the better choice.

The analogy here is that an H&R Block preparer is like a poorly trained Windows sysadmin who subscribes to the policy of locking down users in the interests of job security. Or better, yet, a Help Desk employee who's memorised the phrase, "That configuration is unsupported".

My own past experience is that if you are indeed at poverty level, you can feel free to muck up your return without worrying too much. The folks at the IRS are quick, eager and duty-bound to rewrite it correctly.

Re:H & R Block

[Zadaz]

Wish I hadn't burned my mod points on trolls. This was my first thought. If you're filling out anything more complex than an EZ form, have a human do it. It will pay for its self.

Maybe not H&R Block, but a trained professional.

However I've had good luck with H&R. Go in the off season and you'll find actual accountants who are full-time employees. Go in April and you'll find it almost all temp data-entry people.

Re:H & R Block

[ericdano]

Yup. I have my accountant, Sara, do it for me. Costs about $100, but it is well worth it. Another thing is to keep track of your money and expenses. Having everything on Quicken makes it a breeze to print, and then mail off the stuff to her when it is tax time.

Re:H & R Block

[Arceliar]

Agreed, some tax reform ought to be done. However, national sales tax has a inherent flaw: it only applies to sales. Consider that 10% of the U.S. population has 80% of the wealth (and world wide it's far worse). If you make money faster than you can spend it, much of it is not taxed. Flat rate seems better for that reason, assuming there's some way to let people below the poverty line get a break somehow (food stamps, WORKING public housing, etc).

Re:H & R Block

[Anonymous Coward]

As a former employee there, I can say Block does not compete on price. They compete by being able to front refunds so people can walk out with parts of their refund.

The skill level of Block is a little erratic, but then there are scores of "1 W2" returns that are simply too cut and dried to make any serious money for the top Accountants. Block usually does a passable job on these.

I believe the tax code is not deliberately complex to suit the accountants; some of us get grumpy at being dragged into obscure situations that won't result in any great prep-revenue, but only serve to give a harried preparer room to get nervous. The good preparers put it on hold to dig/ask, despite pressure to get rid of returns.

The tax code is a combination of "Think of The Injustice to (foo) Group" and ugly language designed to stop sneaky schemes of IQ-180 tax sharks. The rules used by "normal" people fit into under 500 pages, as demonstrated by the retail tax guides at the big bookstores. If you own your own business, or rental properly, or play fast and loose on Wall Street, you have no right to complain about complexity.

Re:H & R Block

[mspohr]

You have an accountant that charges $29.00 ?!!

Re:H & R Block

[mspohr]

Most of the tax software will compute your taxes both ways (filing jointly or filing separately) if you're married and tell you which is the least expensive.

Re:H & R Block

[XxtraLarGe]

I have an even better method. We do a 1040. We had H&R Block do our taxes once. Now I use Turbo Tax online. The nice thing about Turbo Tax is that you can do your taxes without paying until you actually file. I try to duplicate the result myself using the forms, following what H & R did. If I come up with the same number, I just use my form (it's happened the last two years now), and don't pay Turbo Tax to file. It's a great way to verify your results. If in the event Turbo Tax comes up with a better refund, I will use them.

Re:H & R Block

[bigbigbison]

Honestly, at H&R Block and places like that, a lot of the taxes aren't done by accountants. THey take classes and all, but one of my friends did it and she said that they basically use the same software that H&R Block sells to consumers. If you get something complicated then you get bumped up to a full time employee, but for the basic tax returns there isn't much difference between using H&R Block's software and having H&R Block do it for you.

Re:H & R Block

[tchdab1]

Having an accountant do my taxes is great for getting my taxes done this year I agree. But it doesn't teach me enough about the process to help me make decisions throughout the following year.
Doing it myself keeps me informed of what is being taxed and how.
Having a program helps reduce the time it takes to enter the data and make the calculations and find help and forms when I need them. I can get into it as much as I need to (which you might say is true for an accountant too), I have all the records and processes when I need to consult them later to see what the tax implications are of doing or not doing something, etc.
Plus to use an accountant I have to assemble all my documentation myself anyway (all the taxable records) which is a major part of the tax effort - once I got all my papers the rest is not so bad.

Given that, I use one of the major programs, and I don't believe it matters much which you use.

Re:H & R Block

[gfxguy]

I've been a supporter of the Fair Tax for a while now. It answers the question of people living below the poverty level, and has a lot of other benefits.

Part of the reason is that we're already basically paying a national sales tax anyway. I mean, where does an employer get the money to pay payroll taxes? It's embedded in the price of goods and services you already get. A national sales tax just eliminates the complexity.

The problem when discussing a system like this is that people feel compelled to bring up the pathological cases, like Bill Gates, and complain he's not being taxed enough. In such a case, they're willing to scrap a viable plan that has tons of benefits over the current system because they can't squeeze the uber rich enough.

Re:H & R Block

[bzipitidoo]

I'm getting to where I don't use any of the major tax programs because they cop a patronizing attitude "taxes are very very VERY complicated. You NEED tax preparation software" and then try to show they're right by driving you all over the tax code with those "interviews", all the while trumpeting how easy their fantastic linear interview process is making it, and nagging you to upgrade to their premium software. The user doesn't chose what data to enter or what order to enter it in, the tax program chooses. It's annoying checking, one screen at a time, "no, I didn't operate a farm with dairy cattle", "no, I didn't collect rent on real estate property I own", "no, I didn't catch and sell fish", "no, I didn't make over $600 in winnings from gambling", "no I don't have any 401K rollover, Roth conversion or whatever from something I did 5 years ago" and 20 questions later, coming across a reminder of something that means you should've checked yes to one of those questions, And all the while, you aren't being shown jack about how the numbers you're blindly entering are affecting your taxes.

Add in that there isn't any tax preparation software for Linux. This year I'll probably go back to the old standby, paper forms and a handy calculator and spreadsheet program. Plus, paper is the easiest way to just dodge all the schemes they have for squeezing a few more dollars out of you in "electronic filing fees" (free after the rebate!), "get your refund early" with a quickie loan, and that sort of thing. When I did use a program, I printed out the results and mailed it in.

I have used PDFCreator to deal with tax programs that save data in a proprietary format, or have the save function crippled to try to force you to upgrade. PDFCreator looks like a printer to Windows, but actually creates a PDF file. Sort of like adding "save as PDF" to any Windows program's File->Print function.

Re:H & R Block

[Reaperducer]

I agree with what you say about having an accountant do your taxes, but I disagree with the notion that H&R Block even approaches a real accountant's quality.

A couple of years ago I cheaped out and went with H&R instead of a real accountant. Eight months later the IRS notifies me that they screwed it up and I owe an additional $750. Well, good thing I paid extra for the goof proof insurance that they advertise on TV -- the stuff where H&R promises to go with you to the audit and pay for the money you owe. *Bzzzzt* Doesn't work. H&R won't honor the "guarantee." No explanation of why, either. It took six months to even get them to let me file a claim and then it just comes back "denied." No explanation. No remorse. No appeal process. And no one in H&R will take responsibility for it.

Bottom line - I went with H&R block and it cost me $750. So much for getting my taxes done "cheap."

Re:H & R Block

[xtinct]

i got a bit of a laugh from your post.

*most* people only want to do their taxes once (if even)... not 2-3 times to make a game of it!

Re:H & R Block

[b0s0z0ku]

They're cross platform, less error prone, and in many cases charge about the same price as popular tax prep software costs.

Not everyone uses tax prep software or needs to - I just spend some time every year and calculate my taxes by hand and using a spreadsheet. I keep all paper receipts for deductions and bank statements to prove earning in case of an audit. And signing off on something an accountant does for you without evaluating it carefully isn't a great option anyway since you might be liable for some fines later if there's an error.

-b.

Re:H & R Block

[winwar]

"As complicated as the US tax code is, this is the BEST advice for anyone above the poverty level."

Only if the time saved is worth the money spent. Or if you really have a complicated return (business owner for instance). Or are a blithering idiot.

Tens of million of people can fill out the 1040 form and be done with it faster than getting the info to the preparer. Add this to the fact that two preparers will likely get different answers for the same dataset if it has any significant complexity....

If you have only W2 forms and a few basic deductions the tax return takes less than an hour.

Now what really sucks are the companies that take months to send W2 forms.

Re:H & R Block

[alshithead]

"Having an accountant do my taxes is great for getting my taxes done this year I agree. But it doesn't teach me enough about the process to help me make decisions throughout the following year."

Change accountants! A good accountant can spend a little time looking over your previous taxes and asking you some questions in order to suggest to you strategies that will help you for this year...and should be available for quick questions throughout the year at no charge.

"Plus to use an accountant I have to assemble all my documentation myself anyway (all the taxable records) which is a major part of the tax effort - once I got all my papers the rest is not so bad."

No, no, no! Assembling the documentation is the easy part. The hard part is knowing all of the rules and loopholes that help you pay the least tax possible.

Disclaimer: I am not an accountant. My sole reason for recommending an accountant is to help you navigate the chaos of the US tax system to your benefit. A complete overhaul or major change of the US tax system is long overdue.

Re:H & R Block

[tchdab1]

>>A good accountant can spend a little time looking over your previous taxes and asking you some questions in order to suggest to you strategies that will help you for this year...and should be available for quick questions throughout the year at no charge.

Yes, true. In the past when I had some questions and felt unsure of answers I had found, I would consult one. I was never told that I had missed something, and so my self-assurance was reinforced.
I think I would still do that, still consult someone if I felt unsure, and I also recommend it. But if you're not doing anything new, and you're paying attention, you should be able to do it yourself.
Anyone who can work through a series of half-baked customer requirements and program a useful product can get through the tax process, and better understand it when you do.

Most questions seem to come during the year - What's the tax implications if I sell this? Are they taking enough out of my paycheck? Am I into Alternative Minimum Tax, or can I get a useful deduction if I do this? What are all these business rules? etc.
I guess I have most of the answers myself now, which is the point of doing it myself and focusing.

And if you saw my record keeping, you'd know that gathering/filtering the documents is in fact the hard part.

I agree that asking for help from an accountant is useful and often vital.

Re:H & R Block

[contrapunctus]

Small claims court.

Re:H & R Block

[tverbeek]

I use last year's return as a template for this year's. Except in cases where my income situation changes drastically (e.g. the year I spent mostly on unemployment, when I started/stopped college) all that changes are the specific numbers to fill in. I have a spreadsheet that I enter the source numbers into, which does all the calculations for the spots on the form that require you to show your work. I'm not exactly an EZ filer (I do consulting on the side, so Schedules C and SE come into play), but it's all about 30 minutes of work, including printing the IRS PDFs. I'd spend the same amount of time just talking to an accountant, or installing and entering my personal info for a desktop app. I recently tried one of the free online filing services, and found the whole mess of pages they wanted me to wade through more trouble than it was worth. I already know what the bottom line will be, based on my last pay stub, so I'll just ink and mail the forms as soon as I get my W2, and wait for my smallish refund check in the mail.

Re:H & R Block

[SEAL]

Add in that there isn't any tax preparation software for Linux.

Most of the web-based tax preparation packages are fairly solid - I don't see why you'd need a Linux-specific one. I've used Turbotax on the web with Firefox in the past with no hassles.

Re:H & R Block

[nolife]

I can understand your position on that because I have done my taxes by hand for years but there is nothing wrong with using some software. There is software out there that allows you to run the show and fill in the blanks but it only does the calculations and basic sanity checks for you. Far easier then paper and pencil and still allow you to call the shots and methodically go through the forms as you would by hand. TaxSlayer is one of them (unless they have changed recently), really really basic and very little coaching but gets it done. These types of software are more of an aid and not a complete DIY kit or guide for those that have no idea what they are doing. I use TaxAct myself but I still like to look at a 8.5x11 1040A and the official IRS documents to follow along with it if I need them.

why not just use the forms?

[Gothmolly]

Print the forms, get a calculator, and do the math....whats the problem?

Re:why not just use the forms?

[4105]

When I am finished with my taxes I print a hard copy. That produces a pile of paper 1/2" thick. I dont trust myself to fiqure out the forms required. Saving $30 bucks on software is not worth the risk. I don't think my taxes are very complicated either. I have one job, a mortgage, ira, 401k etc.

Re:why not just use the forms?

[Harmonious Botch]

What's the problem???? If you do anything more than endorse 26 paychecks, fill out a W2 and a 1040ez, there are lots of problems.

Once you get past the surface, the tax laws are not clear. Many of them use phrases like "reasonable proof" or "adequate documentation", or doing something by "industry standards", or "commonly accepted methods". You have to be an experienced accountant to have some idea what those phrases mean, and that meaning may change depending on which IRS agent you talk to.
This, IMHO, is one of the reasons that the IRS has not pushed for an explicit law that states that one must pay income tax. ( You would think that they would want a law like that to simplify the problems of dealing with people like Ed Brown ) If there were such a law, it would be found unconstitutionally vague. Then they would have to rewrite the whole thing.

Re:why not just use the forms?

[TaoPhoenix]

I sincerely hope you're kidding.

Print the Forms, Get a Calculator and...

Figure out the partial reductions on child-benefits that interact with other parts of the code;

Disover that when you moved from one state to another you end up with Dual Status state returns;

You decided it would be fun to rent that side building next to your house to a guy needing a room, and now you have to figure out the depreciation.

Sorry; software is where Taxes are today. TaxAct, being free as in Beer, is a strong force on the scene.

Re:why not just use the forms?

[JimBobJoe]

Print the forms, get a calculator, and do the math....whats the problem?

I made $7000 last year gross income and Turbotax printed nearly 16 pages of various forms. Of course, the reason for that is because I work 1099 jobs, so I become a mini-little business and quite a lot of things become deducting-eligible. TurboTax did in about 1 1/2 hr what I couldn't do with days of research into the awesome complexities of Schedule C.

Re:why not just use the forms?

[b0s0z0ku]

That's fine if you've only had one job that year, and you work as a wage-slave for someone else, and you don't have a lot of investments.

BTDT as a freelance 1099 consultant for the past 2 years. It's easier than you'd think. Sure, there's a lot of grunt work involved (addind up receipts, etc) but it's doable. And at least you understand what you're signing before you send it.

-b.

Re:why not just use the forms?

[winwar]

"Once you get past the surface, the tax laws are not clear. Many of them use phrases like "reasonable proof" or "adequate documentation", or doing something by "industry standards", or "commonly accepted methods". You have to be an experienced accountant to have some idea what those phrases mean, and that meaning may change depending on which IRS agent you talk to."

Those phrases are perfectly clear. If they aren't then you shouldn't be taking the deduction (and probably don't have sufficient documentation to give to an accountant anyway).

If you wouldn't feel comfortable getting audited, then you don't have "reasonable proof" or "adquate documentation".

TurboTax online

[cmeans]

As I recall it worked equally well with Firefox as IE last year. We've used it every year for the past 4 years or more. I'm not sure what a standalone program might do for us over the online offering. My returns are simple, but my wife has to deal with Schedule C, and investment stuff, it's served us well, as far as I can tell.

Re:TurboTax online

[nmb3000]

TurboTax online

I think it's the same service (provided by Intuit), but other students or such like myself who have an AGI of $27,000 or less can go to taxfreedom.com and do their federal taxes online for free. The program this year is actually quite good from both a technical and interface point of view.

For state income, some states let you do free filing online via their own websites (like UT), but AL, AR, AZ, GA, ID, IA, KY, MA, MI, MN, MO, MS, MT, NY, ND, NC, OK, OR, RI, VT, and WV are all members of the Free File Alliance, and you can usually file taxes in these states for free online.

I'm a poor student, so my only goal is to get my refund back as fast as possible. Granted, my return is simple, but it took only 6 days last year from submission to direct deposit. In any case, I've found that there's no reason not to file online, especially if it's free.

Re:TurboTax online

[horatio]

Ohio also provides a free and mostly painless site to file state taxes.

Re:TurboTax online

[Mattintosh]

I don't know about the other states, but in MO, "file online for free" means "download a PDF-that-looks-like-a-tax-form-and-is-every-bit-as -confusing-and-non-explanatory-as-the-real-thing-b ut-it-does-the-calculations-as-you-fill-in-the-bla nks-and-generates-a-bar-code-when-you-print, then mail it via snail mail". So it's a bit of a misnomer.

Re:TurboTax online

[bluephone]

Dude, I had no idea about that site. 2006 was kinda rough, so this makes it a little easier. I'd mod you up but you're already +5 so I'll just reply and say Thanks. :)

Re:TurboTax online

[nmb3000]

I'd mod you up but you're already +5 so I'll just reply and say Thanks. :)

Oddly enough, I'm not really at +5, but +4. The extra point comes from my karma bonus, though I thought that went away after you got near +5. When it shows +5 is there still the moderation drop-down menu? I wondered why I never seem to break the +4 barrier--maybe I should start disabling the bonus.

In any case, no problem :)

Re:TurboTax online

[b0s0z0ku]

I'm a poor student, so my only goal is to get my refund back as fast as possible.

Don't get a refund. Adjust your allowances on your withholding forms so that you'll owe 10% of your total taxes or less than $1000 on April 15. Under either of those conditions, you don't pay penalties. To hell with giving the government an interest-free loan for 3 months (actually the best part of a year)...

-b.

taxact

[Anonymous Coward]

taxact.com

already done and efiled - no charge if you go directly to their site. DO NOT visit the IRS site first or you will pick up a cookie which will make them try to charge you for efiling if your AGI is above $52k regardless of how you actually enter the taxact site later.

Re:taxact

[rgbscan]

Same here. taxact all the way. I use the d/l'd version though. I just feel better about having my tax info stored locally.

Re:taxact

[fredklein]

Yup- Taxact.

I've already filed! And with Direct Deposit, I'm looking to get my refund in just a few more days!

Re:TaxAct

[DaveJ45]

I too have used TaxAct for the past few years. I find it easy to use, and less expensive than TurboTax.

Typically I file 3 seperate tax returns (for each of the 3 individuals in the household) plus 3 additional state tax returns (Michigan). All are filed electronicly, and the refunds, if any, are deposited directly into the appropriate checking accounts within 2-4 weeks.

Total cost for all of this is in the neighborhood of $50, much less than the cost of having three visits to the local tax preparation office.

All in All, no problems whatsoever in 4 years of use, and I expect this year to be no different.

TaxAct also has a free online tax prep site, if your return is simple enough to meet the guidelines.

Re:TaxAct

[mspohr]

My TaxCut box for 2006 taxes sitting here on my desk says it works on the Mac and my friend installed it on his Mac so I don't think they've ditched the Mac.

Re:taxact

[eggoeater]

I third that.

On line is the way to go vs. software.
It automatically imports all your personal information from last year so you don't have to enter info on your family again. It will also give you a PDF of all your forms filled out.

Also, I usually do my taxes on paper and then do them on line, just so I know what to expect.
I'm a fairly smart guy but it seems EVERY YEAR the TaxAct web site comes up with a slightly different
number than I did on the form and I can always trace it back to a mistake I made on paper. (I blame the IRS.)
Never will I do a tax return by hand for that reason!
It's a good web site and a good value.

Re:TaxAct

[seebs]

Maybe they brought it back? It wasn't an option last year.

Hire an accountant

[Anonymous Coward]

A good accountant will do your taxes for you.

A great accountant will have a tax loophole named after him/her.

I hope you don't think

[MerlynEmrys67]

That Uncle Sam returning that nice interest free loan you have given them by over witholding is "Giving you money back". Biggest fallacy in the book, have the standard tax tables overwithold - then make people think "Gee, the government is giving me money - they are so nice".

If you are getting a large refund - look into talking to an accountant that can tell you how many deductions you REALLY need to be closer to break even. My goal is to hit somewhere between a 100 dollar refund to paying 500 dollars. I can afford 500 dollars, and I'd just assume be making the interest while the money sits in my bank account before giving it to the Man.

But PLEASE don't take my advise - talk to an accountant (IANAA) to find out what is correct for you

Re:I hope you don't think

[RzUpAnmsCwrds]

That Uncle Sam returning that nice interest free loan you have given them by over witholding is "Giving you money back". Biggest fallacy in the book, have the standard tax tables overwithold - then make people think "Gee, the government is giving me money - they are so nice".
If you are getting a large refund - look into talking to an accountant that can tell you how many deductions you REALLY need to be closer to break even. My goal is to hit somewhere between a 100 dollar refund to paying 500 dollars. I can afford 500 dollars, and I'd just assume be making the interest while the money sits in my bank account before giving it to the Man

While this is certainly true, a $500 refund amounts to about $60 in interest (if you invest it in the market and get a decently-good 10%). Compared to the amount of tax you're probably paying, it's not a huge amount of money.

Note that significantly underpaying tax can be considerably more expensive, because the penalties add up quickly. If you don't have an accountant, it's probably best to err on the side of caution, though you shouldn't be getting a $1000 refund.

Re:I hope you don't think

[MindStalker]

HEHE, cept if you have kids, you now get $1000 bucks per kid back even if you didn't pay that $1000 in. Getting $2k back more than I paid this year :)

Yea I really am that poor.. :)

Re:I hope you don't think

[parliboy]

Amen. Last year, some breaks I wasn't expecting (didn't consider moving deduction at the time) pushed my refund to about $150. This year, I'm estimating $15 in refund. And that's only because the telephone excise credit swings it around from me owing them $15. Good times, good times.

Re:I hope you don't think

[MerlynEmrys67]

I don't even begin to know where to answer this one....
Lets start with 60 being a 12% annual rate of return on 500 dollars
Lets move to the government only has your money on average for 6 months - doubling your annual rate of return
Lets just say that I don't plan on earning 10% in the market - some years I've done 25%, I've had a few years of "bad luck" in the market recently
Lets just say the 25 dollars I'd expect to earn in interest on that refund can keep me in WoW for a bit over two months

Re:I hope you don't think

[ximenes]

Consider that it is not the interest that one could earn on the hypothetical $500 rebate but rather the rebate itself that is in question here. If I received that money up-front in my paychecks, I could potentially avoid additional use (and accumulation of fees) with credit cards, make some purchases earlier or at all, and have a better idea of my available funds for budgeting purposes rather than receiving this windfall later on.

A lot of people have very simple taxes: one paycheck, one residence, no real property or investments, and don't itemize. If you know that your income is only coming from your paycheck, then you should be able to figure out your tax for the year ahead of time and get the withholding information right. Even if you receive a raise that skews things, it should be close.

Re:I hope you don't think

[Antony-Kyre]

I would think people know that already. Isn't the general rule to pay 90% of your taxes and owe 10% which could be sitting in a saving account earning interest?

Some people take the safe approach out of fear.

On a side note, the burden of income taxes affects us all. If the government is by the people, for the people, and of the people, then why don't we just have them change it to something less regressive? A few ideas...

1. A national sales tax, but not on the essentials. Might as well make used items exempt too thus allowing the poor to avoid paying it.

2. An income tax exempting the first $100k of adjusted gross income. Tax everything at a flat rate over that. Adjusted by reason of not wanting to tax disability payments, malpractice payouts, insurance settlements, etc.

3. A gross wealth income tax. Large exemption bracket to exempt a lot of people. Own more than $5 million in property total and you hit the first bracket that has a rate greater than 0%. Bill Gates would be at the highest bracket obviously and would probably pay like 50% of his INCOME, whatever that may be.

Re:I hope you don't think

[drsquare]

1. A national sales tax, but not on the essentials. Might as well make used items exempt too thus allowing the poor to avoid paying it.

You want a less regressive tax, then propose a more regressive tax? Under your scheme a billionaire could live a normal lifestyle and not pay any tax!

3. A gross wealth income tax. Large exemption bracket to exempt a lot of people. Own more than $5 million in property total and you hit the first bracket that has a rate greater than 0%. Bill Gates would be at the highest bracket obviously and would probably pay like 50% of his INCOME, whatever that may be.

Seems like a good way to drive rich people abroad so there'd be no money coming into the government at all. Then the poor would have to pay their own way.

Re:I hope you don't think

[ClosedSource]

"Seems like a good way to drive rich people abroad so there'd be no money coming into the government at all. Then the poor would have to pay their own way."

That might work if they plan on living in a third-world country, but most modern countries don't allow foreigners to become residents without following strict requirements. You can't just buy your way in.

Re:I hope you don't think

[Azghoul]

Billionaires don't buy anything? Huh, who knew?

Re:I hope you don't think

[JavaRob]

So the government takes money from a citizen, then after a year returns it to him or her. To you, this is not "giving you money back"? Isn't that basically the definition of giving something back? Here's a test. See if *you* can get a stranger to just give you a bunch of money, and tell them you'll repay them the exact dollar amount in a year (so technically less money after inflation). No takers, huh?

There's value in HAVING the money. If the government is holding it, they can use it however they want until refund day (but not paying you a dime in interest). If YOU'RE holding it, you can earn interest on it from your bank, you can invest it, etc..

In the normal situation, if you loan the government money (by buying treasury notes, savings bonds, etc.), they have to pay interest for the use of your money. When you screw up your withholding, they don't.

Re:I hope you don't think

[doktor-hladnjak]

In most developed countries, it's easy to immigrate if you promise to drop a huge amount of money to start a local business thereby creating taxable income and new jobs.

Re:I hope you don't think

[Trogre]

I can afford 500 dollars, and I'd just assume be making the interest while the money sits in my bank account before giving it to the Man.

That's just as soon, you'd just as soon be making the interest while the money sits in your bank account before giving it to the Man.

Re:I hope you don't think

[Antony-Kyre]

It is a progressive tax, not a regressive tax. I don't know why you're trying to claim otherwise.

Re:I hope you don't think

[james caird]

i suspect you won't care, but the "correct" cliche is "I'd just as soon be" rather than "I'd just assume be" ... FYI.

"At least once before"

[Noksagt]

I know this topic has been asked at least once before, but seeing as how 6 years have passed, I figured the question is due again.

It has been answered several times in the past couple years:

• 2005
  • Best Tax Programs?
  • Open Source Tax Products?
  • Tax Time Again: Any Linux Solutions?
• 2004
  • The Future of Tax Software on Linux?
  • Tax Preparation Software for 2003?

Just don't be like this guy

[the Gray Mouser]

here and think that taxes are voluntary. The government isn't too keen on that apparently.

Re:Just don't be like this guy

[StupidKatz]

Funny, as many people are of the opinion that the reason taxes are paid is because the IRS will send jack-booted thugs to kick down your door and shoot your dog if you don't. The IRS has never once disclosed what law compells ordinary wage slaves to pay taxes on their salaries. The ONLY gotcha is that most people "voluntarily" fill out a W2 and/or otherwise "volunteer" their wages for taxable status.

You know what the IRS said when folks asked them about the law? "We're answering them through enforcement actions." Gee, how nice of them. 'Bout time to give them the boot?

Re:Just don't be like this guy

[damiangerous]

Are you serious? The IRS has an entire FAQ on that issue.

Re:Just don't be like this guy

[LouisJBouchard]

Please tell me you are not serious. The courts have ruled time and time again that wages are income and on other such nonsense.

In fact, this website http://evans-legal.com/dan/tpfaq.html will show you the fallacy in the arguments of those like Ed Brown.

What he is trying to do is to start another Ruby Ridge so that Congress gets involved, people like the Brown's tell sob storied (Even though they are even robbing their own employees by taking their withheld taxes and not paying the government) and congress puts another leash on the IRS. I do believe that the IRS needs to hold restraint in some cases but not in this case. Those idiots owe more in taxes than I have made in almost 15 years of working. It is time that they pay up.

Little of both

[the_nightwulf]

I grab forms from the IRS site and figure them myself. Then hit up the list of Free File companies and see how I did.

This way I get my refund quicker, and I feel like I've actually used my head for something other than a hat rest.

Excel 1040

[__aapopf3474]

Google Excel 1040. It works for me. I blew off Intuit after their activation debacle. That and the fact that Office Despot consistently has lower prices for Intuit's products than Intuit's website. After Intuit, H&R Block's product seemed ok.

FreeFile

[Noksagt]

Over two thirds of tax payers can file online for free. The IRS runs Free File, which helps you to select a service to file through.

Most of these were browser and OS agnostic last year & a good choice for those with AGIs low enough.

Re:How about... none?

[NineNine]

Regardless of the legality of income tax, lots of men with guns will eventually show up to put you in jail. So, you can just think of taxes as your "get out of jail" card. The only problem is that it's not free.

The joys of TurboTax

[akohler]

For the past 10 years, I have have been using TurboTax to file my taxes. I've been using TurboTax Online since 2001 (on Linux). I now use GnuCash to keep track of my finances and import the data into TurboTax Online. If you want more info, please see my journal entry on TurboTax Online.

For the record, though, I still mostly use pen and paper for D&D.

Re:The joys of TurboTax

[Skewray]

How do you import from Gnucash? Last time I checked (about two years ago), there were no export capabilities in Gnucash. Did they add something new?

Re:The joys of TurboTax

[akohler]

Yes. It used to be not compatible.

Now there is a standard tax file format that a lot of software is implementing.

Quicken and other packages also import this. TurboTax will ask you if you want to import from Quicken. Just say "yes" and then choose .TXF format when it asks you. Smooth sailing from there.

Swift move...

[NineNine]

...Ex-Lax.

It's better to use real accountants.

Always found it strange

[TheLink]

That there's a market for tax software in the USA.

Are there other countries where such software would be worth it?

In the country I live in the income tax system seems simple enough that anyone who is too stupid to figure it out is unlikely to be making enough money to fall in the taxable bracket.

Re:Always found it strange

[ColaMan]

You could live in a country that will supply you with free (not Free) software downloadable from the Tax Office website, which walks you through the whole process, step by step, asking reasonably easy questions with decent, context sensitive online help to boot.

Then after establishing your bona-fides with them using details from a previous tax cheque/bill that was mailed to you, it all gets submitted online to them, with the option of a direct transfer into a bank account of your choice once it's been processed.

Beats the hell out of paper or the $70-$100 that tax people charge these days for a basic return.

Re:Always found it strange

[Dunx]

What a very amusing conceit, that only the US could produce tax law baroque enough to require software to navigate!

I know that the forms for UK tax returns are easier than US ones, but using software was still a better bet for me when I had to fill one in, especially since the online tool that the Inland Revenue supplied could not at the time deal with non-residents.

I was going to start ranting about the US tax code, but this is not the time.

Re:Always found it strange

[nicholdraper]

The tax system in the United States is one of the best in the world. The system in India is considered the most complex. Actually, the salaried income taxes are a simple three tiered scale in the US. They can be read off of a simple table so that individuals don't even have to do any math. The opportunities for economic advancement is greater here than in many other countries. So the over 50 pages of tax forms that I submit, are really 50 pages of calculating my earnings in my various businesses and investments.

Re:Always found it strange

[cibyr]

Yeah, if only that software didn't suck so much :(

Why on earth is the size of the window limited to 800x600, when almost every page requires scroll bars?!?

Re:Always found it strange

[John Hasler]

> You could live in a country that will supply you with free (not Free)
> software...

That is not free. It requires the purchase of a Microsoft operating system.

Re:Always found it strange

[John Hasler]

> The tax system in the United States is one of the best in the world.

Or in other words, most of the others are even worse, hard as that is to believe.

Re:product activation - turned me away

[MindStalker]

Oh yea, I definately don't use turbotax software. But the online turbotax is really one of the best out there. Used it for the last few years. Lucky for me my wife got a job at a CPA firm last year, with a nice perk of free taxes... Hmm her boss gets to know EXACTLY how much she is underpaid.. :)

hrblock.com

[geekboybt]

Been using them for the past few years now. It's not terribly expensive (only $10 for the federal, then do your state ones elsewhere), and totally browser-form based. Works great in Firefox 2 on Mac; I don't see why it wouldn't work on Fx on other platforms (Linux, etc).

The best tax technology on earth

[svunt]

...is a qualified tax accountant, which you can access via an online virtual community called OutDoors, which features amazing high res graphics and panoramic 3d first person perspectives. When you locate the tax accountant, he or she will upload your financial data at a staggering speed with his or her eyes and ears, and using the revolutionary HumanBrain processor, calculate the maximum refund available to you.

It's quite a rush, get ready to ride the mongoose.

Re:The best tax technology on earth

[Osty]

...is a qualified tax accountant, which you can access via an online virtual community called OutDoors, which features amazing high res graphics and panoramic 3d first person perspectives. When you locate the tax accountant, he or she will upload your financial data at a staggering speed with his or her eyes and ears, and using the revolutionary HumanBrain processor, calculate the maximum refund available to you.

But a qualified tax accountant will charge $50+ for basic preparation, and quite a bit more if you have any special circumstances. Now if you do have special circumstances, the money is well worth it to make sure that you're protected in case of an audit. On the other hand, if you have a very basic filing (deductions such as mortgage interest fall under the "basic filing" status IMHO), tax preparation software is only $20 compared to the $50+ you'll pay for an accountant and will do the job just as well. Pen and paper is free.

I'm not saying that a tax accountant is a bad idea. I'm just saying that for 90% of us it's way overkill and a waste of money.

Re:The best tax technology on earth

[svunt]

I agree entirely. Either way, pen and paper or a professional should be the only choices you look at. Software for tax is either overkill or underkill.

Re:The best tax technology on earth

[spacey]

I can't disagree more with the recommendation to use basic tax software. If you have any non-1040 income (i.e. almost any independant work) then you may discover, as I did, that turbotax is monumentally stupid. It's had me overpay by >$1000 two years in the past. The IRS automatic checkers refunded me that money. You can't imagine how it sucks to drain your bank account, only to have the IRS send you back some of that money 2 months later.

Also, if you've done any work outside of a regular job (edit some html, write some php, have a meeting to advise someone, minor things that are billable etc.) if you have even a few square feet, a percentage of your apt/house dedicated to work, and if you've bought a computer or any computer-related equipment and had any business-related meals with your co-workers, consultants, professionally-related friends etc. then you need an accountant to get that money out of your taxes. Turbotax just doesn't do it.

After 2 years in a row with turbotax screwing me, I've hired an accountant for the last 2 years and it's been far more than worth it.

-Peter

Re:How about... none?

[kalidasa]

Unconstitutional? There's a Constitutional amendment, the sixteenth, that explicitly authorizes income taxes, ratified in 1913. To quote:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

Now, as most of our rights are guaranteed by amendments to the Constitution (like the right to keep and bear arms), and as most of the time when laws are struck down it is because the violate the terms of the amendments and not of the original articles (particularly those pesky first ten amendments), I think you're going to have a hard time arguing against the validity of the sixteenth amendment.

By the way, by definition, amendments have priority over the text of the articles - after all, they are *amendments*. Any discrepancy between an amendment and the articles must be resolved in favor of the amendment.

Re:How about... none?

[jdigriz]

Sorry, you are incorrect. The Supreme Court cannot strike down a Constitutional Amendment as unconstitutional. If an Amendment is ratified, it is in the Constitution by definition. And things that are in the Constitution cannot be unconstitutional. See Amendment XVI http://www.archives.gov/national-archives-experien ce/charters/constitution_amendments_11-27.html

Re:How about... none?

[nido]

fire your employer, disappear from the IRS's tracking systems. Cash and barter are your friends.

srsly. I've never filed a return myself, and haven't had one filed on my behalf since I used up all the college money my dad had saved. Had a regular job after teh college, and eventually filed a W2 with teh employer that told him to withold nothing, as I made less than $7k/year.

Be a small fish in a big pond, and it won't be worth their while to bother you.

Yearly tax returns don't bother me, because the government always ends up owing me money.

That's a funny way to look at it. How much did they take from you total, and what percentage do they "owe" you back?

me too

[twitter]

It's still pen and paper for me

Sure, but it's easier to get the forms with a browser and KPDF than it is to drive to the library. Also, it's easier to add the stuff up with gnumeric than it is to use a calculator. After that, the check's in the mail.

Of course, all of it's a stupid curse. Uncle Sam knows exactly what you made and has the resources to present it to you over the web. Taxes should be as easy as going to a web site and choosing between "I agree" and "I have something else to report" then doing it.

I'm going to continue to use paper as long as Uncle Sam does, mostly because the programs made to do taxes have proved themselves less than trustworthy.

Re:me too

[b0s0z0ku]

Of course, all of it's a stupid curse. Uncle Sam knows exactly what you made and has the resources to present it to you over the web.

Not really, especially if you're a small business owner (like me) who accepts payment from clients. Some of the payments are income, others are reimbursements for expenses and purchases of equipment. Unless you're just working for wages and don't qualify for any credits and deductions, it isn't really that simple.

-b.

Re:me too

[b0s0z0ku]

After that, the check's in the mail.

If you owe less than 10% of your total year's liability or less than $1000 on April 15, you don't get any penalties assessed for late payment. If you can make sure to adhere to those limits, it's better to underpay a bit during the year and send a final (small) payment on April 15 rather than getting a check back. Why give them an interest-free loan for 3 months?

-b.

Re:me too

[CastrTroy]

This is my opinion too. As long as I can't file taxes for free online, without pay some third party, I'm going to continue to use paper. I have nothing against most of the tax software companies, but I think the government should at least provide a web fillable tax paper for free. Let the other companies provide services that step you through the process, but at least provide a way for the rest of us who don't need our hand held (and don't want to miss out on important deductions) to file our taxes online. I tried one of these services a few years ago, when I was in University and it was free, because I made so little. It didn't even have a way for me to claim my rent (AKA property taxes). Plus with all the stories I've heard about them overwriting your boot sector when you install the software and other nicities, I'm not about to start paying money ever year for someone else to screw up my taxes.

Re:me too

[StikyPad]

And SBOs are also the biggest source of tax fraud. I'd find my references, but I gotta run and Google is always available.

Re:me too

[b0s0z0ku]

And SBOs are also the biggest source of tax fraud. I'd find my references, but I gotta run and Google is always available.

Your point being? Actually, I suspect since small businesses don't have high-powered accounting firms and tax lawyers working for them (usually), a lot of them overpay or aren't as aggressive with deductions as they can be as well. I don't see how a workable system for "easy" small business taxation would work.

-b.

A bigger falacy.

[twitter]

That Uncle Sam returning that nice interest free loan you have given them by over witholding is "Giving you money back". Biggest fallacy in the book ...

The biggest fallacy in the book is that fiat currency has an intrinsic value. Look up Alan Greenspan's little essay on the gold standard, and realize that you are not free without a secure store of value. The withholdings are a time consuming but insignificant part of the bigger scam.

Re:A bigger falacy.

[Schraegstrichpunkt]

What are you talking about? Yeah, the value of fiat currency floats. Yeah, the government uses that to mess with the economy. It's called monetary policy. What's your point?

Re:A bigger falacy.

[jb.hl.com]

I think his point is, rather, that if your currency is not backed by something of value (e.g gold) and then the value of it floats around, it is far too easy to have that value withheld from you in an instant, as you actually don't own anything except paper banknotes.

Not an unreasonable point, if that IS what he's getting at.

Re:A bigger falacy.

[poopdeville]

The biggest fallacy in the book is thinking that gold has any intrinsic value outside of its industrial uses. And copper alloys are superior for most applications.

The price of gold is just as arbitrary as the 'price' of a dollar. Having no intrinsic value means that extrinsic value -- price -- is its only value.

Re:A bigger falacy.

[twitter]

The biggest fallacy in the book is thinking that gold has any intrinsic value outside of its industrial uses. The price of gold is just as arbitrary as the 'price' of a dollar. Having no intrinsic value means that extrinsic value -- price -- is its only value.

The problem that Mr. Greenspan noted forty years ago is that you are not free to chose your store of value. When people are free to chose, government has no choice but to follow. Fiat currency only has value because you are not free to chose another.

Re:A bigger falacy.

[winwar]

"I think his point is, rather, that if your currency is not backed by something of value (e.g gold) and then the value of it floats around, it is far too easy to have that value withheld from you in an instant, as you actually don't own anything except paper banknotes.

Not an unreasonable point, if that IS what he's getting at."

Debatable. Gold has value for the same reason paper money has value. People value gold. While gold is finite, it isn't very rare-we could destroy the value of gold if we desired. Paper money is backed by the US government. As long as people value the US government, its money will be valuable. Both gold and paper money fluctuates in value.

If the US goverment collapses, gold isn't going to be very useful. You don't eat it, it's hard to transport, people will want to take it from you, etc.

Re:A bigger falacy.

[StikyPad]

Backed vs. fiat currency is all just semantics. In either case, the government controls the supply. If a "backed" currency economy collapsed, do you really think the government would let you trade in your currency for whatever it's backed against? Of course not.

Things are, and have always been, worth what someone is willing to pay for them, and that includes currency. It is impossible to tie currency to an actual standard, because no single thing has the same worth to every person, including gold. Since gold would be nearly worthless in an economic collapse ("You want some water? I need some food, and that shiny metal doesn't look very nutritional!), it's pretty pointless to use it to back your currency. And since everything is in fluctuation in both supply and demand, there's really nothing suitable.

Currency represents an idea; a measure of something intangible, presumably work done. If people suddenly decide that a currency worthless (or worth less, or worth more), then it is. If the government floods the market with more currency, then it will result in inflation, fiat or not.

Re:How about... none?

[larry bagina]

A Constitutional Amendment which was not properly ratified is unconstitutional.

TaxAct

[seebs]

I used TaxAct last year. Haven't touched TurboTax in years --Intuit are fairly nasty and willful spammers, with a long history of abuses, spyware, and other charming traits. TaxCut was okay, but they ditched the Mac, so I had to go with something else anyway, and H&R Block is not one of my favorite companies; I'm sure they get taxes okay, but they don't understand computers or web pages very well.

Mod Up, people should know this...

[Anonymous Coward]

This is part of a negotiated settlement between the IRS and for-profit tax preparation companies during the Clinton years. It, after all, makes more sense for the IRS to offer free software for the public to encourage everyone to file electronically and standardize everything, etc. More efficent for the IRS, and therefore you. But that would hurt some big companies (I'm sure you can intuit whom I mean). Thus a deal was struck a while back, which as far as I know is not promoted/advertised by the tax-prep software companies.

The result is that people who make less than a certain amount (Adjusted Gross Income (AGI) of $52,000 or less) are entitled to free software by the "Free File Alliance, LLC" (ie, the tax software industry). During the Bush administration, the # of people who has qualified for this has gone down every year...

The government believes that private industry, given its established expertise and experience in the field of electronic tax preparation, has a proven track record in providing the best technology and services available. In addition, the government believes a partnership with private industry will: provide taxpayers with higher quality services by using the existing expertise of the private sector; maximize consumer choice; promote competition within the marketplace; and meet objectives in the least costly manner to taxpayers.

FYI.

Re:Taxcut 2006 is free

[Arker]

Ummm, no, 'completely free' it is not by any means.

It's free of additional charge, for those who have already paid the high price of using Windows 2000/XP/Vista. It's not available for real operating systems or alternative hardware, and naturally the actual software is not available for review, just an opaque binary blob. So no, it's far from 'completely free.'

Using TaxCut since TurboTax requires admin to run

[fuzzyLarry]

A few years ago, TurboTax started requiring admin rights on Windows to run, not just install. When I talked to a TurboTax tech support manager, he claimed the IRS "requires" it run with admin rights. Not trusting Intuit that much, I returned the SW to Costco. It is also interesting to note that TaxCut has never required admin rights. TaxCut works ok, but the interface seems clunky compared to my memory of TurboTax.

My Web Browser

[Em Adespoton]

Title says it all. I have an account, log in once or twice a year, and file my taxes. I can do it wherever I am, on whatever computer is available, as long as it has internet access and a secure web browser. Back when I used software, I found I was always waiting for the software patches to come out, and they always came out AFTER most of the features of the software would have been usable (right near the end of filing time, instead of in January during planning time). Now, it's always up to date, and I can check in whenever I want to see where my registered savings and charitable contributions should be to maximize my return. Plus, such sites are generally free for people below a certain income level (and cheaper than tax software for people over that level).

Re:e-tax from the ATO

[unfunk]

Agreed. While it's not exactly the most user-friendly program out there, you gotta give it some leeway, in that it was produced by the Tax Office.
I've used it for the last three tax returns, and gotten a decent refund each time, and within less than a week!

But then, I suspect that the American taxarion system is substantially more complicated than ours is...

Of course its asked again...

[LordEd]

This is the tech industry. Things tend to change. Perhaps there are new programs/vendors out?

I personally have used quicktaxweb.ca (canadian) for the last few years, but this year i bought the desktop app because my household plans to file more than 1 over the free filing limit.

Vomit Time

[rdforsyth]

Why is it that every year, someone bitches about taxes, and how the government is taking us for a spin? Sure, there's a plethora of governmental bodies, and maybe more than needed, but without them, where do streets and street repairs come from? Street lights? Police officers? Schools? These things we take for granted, but are integral to our lives, and our children's lives. Money doesn't just poof from somewhere to pay the bills of street cleaners, or the guys that fix our street lamps. Who pays for all the electricity? Who plows our backlanes for free? We pay taxes up the ass to enjoy the sweetest life imaginable. Who cares if you paid $3000 in taxes and only got back $2900. That $100 paid for someones back breaking labor (heh) on our streets, to ensure our tires don't get beat up by potholes. Oh, when ANYTHING in the country goes wrong, who do we turn to to shell out the big bucks to get it fixed/done? The government. People need to stop complaining. It's not like they're taking your first born. Unless your American, then, sorry. You should move your kids up to Canada. Up here we build igloos and have stick figure parties. Armies? That's for the ones with more than 3 fingers. Ain't many of them around here.

Re:Vomit Time

[Baba Ram Dass]

Sure, there's a plethora of governmental bodies, and maybe more than needed, but without them, where do streets and street repairs come from? Street lights? Police officers? Schools? Each one of those are paid for with your local taxes.

That $100 paid for someones back breaking labor (heh) on our streets, to ensure our tires don't get beat up by potholes. No, it didn't. Local streets are paid for by local taxes. Highways are paid for by an excise tax on gasoline.

Oh, when ANYTHING in the country goes wrong, who do we turn to to shell out the big bucks to get it fixed/done? The government. I don't, but you're right; most people do. But that's only because government has all the resources, and it has all the resources only because it's sucked the private sector dry through taxes in the first place.

Unless your American, then, sorry. Damn, I thought I had one! Oh well, I'll just pretend you were talking about US taxes and post anyway. :)

Re:Vomit Time

[Baba Ram Dass]

Yeah, it is pretty stupid. Of course, the solution is pretty simple: don't ban stem cell research, but don't use other people's money to finance it either.

OpenOffice Calc

[julesh]

If you know enough about what money you can include in which figures in the return to use tax software, you can go a step further, get the notes on how to fill in the return, and work it all out in a spreadsheet.

(Disclaimer: I've only ever done UK tax returns this way, but the principle's the same...)

Re:OpenOffice Calc

[leeward]

I'll have to agree with this (I'm in the US). I have been using OpenOffice Calc to handle all the bookkeeping and taxes for me and my small (1 person) business for about 6 years now. Of course, I can no longer blame mistakes on someone else.

How to pick your CPA for dummies (or geeks)

[darrint]

Since it's fashionable to bash H&R Block in this thread, I thought I'd do some good and help you all pick a good independent
CPA. I did and never looked back. I made one error. So I hope I can help the next geek avoid a pothole.

Assume that sometime in the future you might want to quit the day job and run your own technology company and make your million, a la Paul Graham. You will want someone to help you with money and advice.

Your CPA, if he's good, will open the door to untold riches and contacts. So while any qualified CPA ought to be able to handle your filings, what sets them apart is their Rolodex. Mine was only okay this way, and I'm not switching to another until I have a really strong reason.

So, all that said, if I were to go CPA shopping today, I'd ask more than one candidate:

"I can imagine that in the future I will want to build a company building technology in the [Real Estate] industry. [Fill in your weird talent or special license.] I'm going to come to you and ask if you know any interested investors. If I did that today, what would you be able to do for me?"

Compare and contrast the answers and you should find a CPA that will make you very happy.

Someday when you have that company and will get a SCARY letter from the IRS. You will immediately call your CPA and that's the last you hear of it.

Paper return

[nuggz]

I'm Canadian, but I just do it on the paper forms and phone it in.

Are you tax forms really that complicated?

Re:Paper return

[TaoPhoenix]

"Phone it in" says it all.

We all agree 1 W2 is a snap. "Tax Forms" is PLURAL, and once you start getting plural forms, it tends to get *very* plural, very fast.

Anyone who says "taxes are easy" simply hasn't performed the activities that tend to trigger the ugly wrinkles. Taxes beyond a certain point aren't allowed to be phoned in.

TurboTax

[Ferretman]

One year I did the taxes with both TaxCut and TurboTax to see which one I felt was easier to use. TaxCut was cheaper but I didn't understand how it went through its deducation interview process....seemed to me it missed some things. It had a much better interface for recording donations though.

In the end I went with TurboTax, if only because I understood how it got what it got.

Ferretman

Re:How about... none?

[LouisJBouchard]

It is common law actually. There are many cases quotes (see this site: http://evans-legal.com/dan/tpfaq.html#voluntary ). The truth to that statement is that paying taxes in the US is NOT voluntary. The government has the right to use force to collect your taxes (including assess the taxes without your input and demand payment).

Congress and the courts however felt that the use of force would be unwise in most cases and as such, allowed the citizen the choice of being able to voluntarily comply with the tax laws. Voluntary compliance means that you present your data to the IRS, you determine what tax you pay, and you pay it without force. If you refuse to comply, then the IRS can resort to force.

Re: Explicit Laws!?

[TaoPhoenix]

It's pretty clear - paying taxes is required by law.

Don't sidetrack down those alleys based on 1957 cases talking about "voluntary taxes"; that's a deliberate mis-interpretation out of context of the word "voluntary".

The basic idea is that people submit their information of their own accord; the IRS does not send "door-to-door" agents.

Re: Software Overkill?

[TaoPhoenix]

Software is efficient. It keeps you from having to look up all the sliding scales. Pen & paper is terrible. Heaven help you if you forgot that your depreciation changed on your truck and forgot to re-check the EIC because your Ex has custody this year.

For Canadians

[quacking duck]

Taxman is what I've been using the last three years. It's free, and when you're done you just print off the necessary pages (no electronic filing, which the author says would cost him significant time and expense to implement due to red tape).

Windows-only, unfortunately.

Re: Tax Software vs. Professionals

[TaoPhoenix]

This many years into the program, I doubt it's a fault of the raw code. Usually it's a combination of a misleading interface and user error.

Professionals use software to do taxes. Therefore, a professional could probably bludgeon Turbo Tax into an accurate return. The engine is there. I have seen the interface, and it looks a little hokey. I did just fine with TaxAct.

Re: Tax Software Interface

[TaoPhoenix]

This feels closer to the real issues. I don't have the funding to do a paid study on the raw code accuracy of multiple programs; what IS serious is whether the interface tricks the user into mistakes.

I think I had to make the dialogs go away and enter a couple of numbers by override on TaxAct a few years ago. But once the number got there, it was calculated correctly throughout the form.

Anybody use Taxsoftware.com?

[G4from128k]

This year, I'm considering using an online place called Taxsoftware.com for our partnership and personal returns (I've gotten tired of paying a professional for this stuff). Taxsoftware seems to offer a relatively complete set of forms for both personal and business (e.g. 1065, 1120, etc.), including both U.S. federal and most states, JAVA-based platform-independent online system, and reasonable prices.

But I haven't found reviews that give me a warm-fuzzy about trusting my data (and time) to the place nor any obvious horror stories.

Has anyone used these guys?

Re:How about... none?

[gatkinso]

Stoopid.

I can't recommendTaxCut

[Xesdeeni]

I punted H&R Block's TaxCut last year. I had a 1098 form that didn't have my real estate taxes in block 4. The instructions in their "interview" said, that was OK, and they'd ask for it later. But they never did. As a result, their calculations had me paying an extra $1700 in taxes!

I contacted their customer support with a very detailed and specific query:
"When entering Mortgage Interest Statement Information, my 1098 doesn't have my real-estate taxes in block 4. I have a separate statement from the county showing the real-estate tax paid.

The help on the side says I will be asked for this information later if it's not in the 1098. But IT NEVER ASKS FOR THE INFORMATION! If I add the info to the 1098, it makes a huge difference in my tax burden!

And looking back at last year's return, filed with Tax Cut 2004, I see the forms are different and the real estate tax paid was asked for, even though it wasn't on the 1098 last year either."

They suggested I contact my "financial institution" to get a 1098. So I tried again, and again, and again, and again. After FIVE back and forth e-mails (each mistakenly beginning with "I have read and fully understand...") they finally seemed to comprehend what was wrong. Then their response was that I needed to modify the forms manually.

So basically they were saying if I hadn't been paying attention, a bug in their software (I program for a living, and this was most definitely a bug) would have cost me $1700.

And when I did notice, they were asking me to bypass their software and enter the taxes manually. H&R Block never admitted they had a problem.

Exactly what had I paid for!? So I asked how I could verify that what I was manually entering into the form was correct, since that would be bypassing their s/w, which is what I had purchased. They said they'd be happy to give me advice about the problem, if I'd use their "Tax Advisor"--for a fee:

"H&R Block offers an Ask a Tax Advisor service, which features highly qualified H&R Block tax professionals who will answer your tax questions. The Ask a Tax Advisor feature is available within the TaxCut program and allows you to connect with an experienced H&R Block Tax Professional via phone or e-mail for $19.95 per topic."

What a scam!

I purchased TurboTax (at a significant discount, at the last minute) and it didn't have such a problem.

I let H&R Block know that they'd lost a customer. I'm not sure what I'm going to do this year. TaxAct is interesting, but I'm not entering my tax information into someone else's database.

Xesdeeni

Re:I can't recommendTaxCut

[cdipierr]

Um. Sorry to burst your self-righteous bubble, but TaxCut did indeed ask for property tax paid separate from a 1098 (ie. you're not using escrow). I haven't had any problem doing this for all the years I've used Taxcut (switched from TurboTax after their activation crap).

Re:I can't recommendTaxCut

[Xesdeeni]

You call ME self-righteous? You weren't in front of my machine, but you claim you know what TaxCut did!?

I ran through the "interview" three times. It most certainly said it would ask later, and it most certainly did not. If I put the tax paid into the interview as if it were on the 1098 form, things worked as expected. Except that the instructions were very explicit that I should not do that (and filing the taxes that way should have easily been flagged by the IRS, since the 1098 and the 1040 forms wouldn't have matched).

BTW, we DO use escrow. And perhaps the 1098 should have had the tax. But it didn't and the instructions from TaxCut on what to do about it would have cost me $1700. And their technical support never denied the problem or led me to the place where you say it asked for the tax.

Also, as I said, the previous year's TaxCut most certainly DID ask for the tax. But not last year's.

Re:How about... none?

[chris_eineke]

That reminds me of Aaron Russo's Income Tax movie. There's also a related article on this whole issue.

Re:How about... none?

[kalidasa]

Yes, because of course it is an entirely rational argument to claim that differences in punctuation invalidate a ratification (they don't), or that Ohio didn't become a state until 1953.

CPA

[YetAnotherBob]

As I have a side business, I use a CPA. No software can take the place of a real expert. I have tried doing my own electronicly, and by hand. The expert usually saves me enough to pay his fees. And as an added bonus, I havn't been autided since I started using him. When the IRS has questions, the CPA can answer them. (he keeps records.) Government auditors will have respect for a certified accountant.

Taxslayer.com

[slayermet420]

Of course, the real benefits of this site are only available to Active Duty military. Taxslayer.com is 100% free for active duty to file their taxes, both state and federal.

Re:Let the Government do it for you

[b0s0z0ku]

California had a program called ReadyReturn. The state tax agency would prepare your return from the information on W-2s, 1099s, etc. and send the return to you.

The State has an interest in collecting as much money as possible. This represents a conflict of interest.

-b.

Online Tax stuff

[sorphin]

http://www.online-taxes.com/ that's who i use

Re:why not just use the forms? ... TaxAct

[TaoPhoenix]

Because your fallacy is that $$$ is required to be spent.

TaxAct, free as in beer, doesn't require any $$$ for the Federal side. Not all states are equally complex, so you may not need to spend any money on the state side either. The choice was between paper and TaxAct. Unless you like the IRS form of Sudoku, ... software wins.

Re:How about... none?

[chris_eineke]

You claim they don't. I googled for 'lawsuit misplaced comma', which lead me to this page. Scroll down and you'll find

A misplaced comma in a contract can give rise to a lawsuit. See, e.g., Crandon v. U.S., 494 U.S. 152, 110 S. Ct. 997, 108 L. Ed. 2d 132 (1990).

There's also this. I'm not a lawyer. Punctuation is not the sole argument they're bringing forth.

Re:How about... none?

[cfulmer]

26 U.S.C. 1(a): "There is hereby imposed on the taxable income of ..." and then goes to list different classes, including "every individual".

26 U.S.C. 7805(a) "... the Secretary shall prescribe all needful rules and regulations for the enforcement of this title ..."

26 C.F.R. 1.441-1(a): "Taxable income must be computed and a return must be made for a period known as the taxable year."

In general, the statutes and regulations of the tax system are in 26 U.S.C. and 26 C.F.R., respectively. They can most easily found at www.law.cornell.edu. There are other sources of law that affect taxes, like court decisions and interpretive rulings. But, the meat of our tax system is in the Code and the Regulations.

State Farm & TurboTax Online

[brycenut]

Only for State Farm Insurance (or investments, etc) customers, but they'll give you a free federal and one state filing through Turbotax online. Just login to their webpage and it should be on the left of your account summary.

If you have a policy/account with them, but haven't signed up on the webpage, it will take a few hours to a couple of days after you register for the link to appear.

Confused..

[nausicaa]

What I don't really understand is why any regular Joe should ever need an accountant och tax software to begin with.. I mean, sure, once you start hitting the stock market, and/or buying/selling stuff for profit, have a company of your own, sure, but before that?

I realize it's very different over there compare to here (Sweden), but for the last couple of years I've tried new ways of confirming my taxes. I get a form, read through it and compare it to the controlstatements I've gotten from whatever institution that gives me money that I'm supposed to pay tax on, then I follow one of the procedures available to confirm. As of now I can sign the form and leave it in a local drop-box, send a text message with my id and the code I get with the form, do the same online using the key file I have for my banking and the specified code I got with the form or even call (I think, never did try that..) and confirm it.

As long as I don't need to change anything it's that simple. If I do need to change anything, I do and then drop the form down the chute like I used to do before.

Send them to the gov't

[PhraudulentOne]

Note, I am Canadian.

I put all my tax information (T4 slips, receipts, invoices, etc) into a big brown envelope and send it to the government. I let them do my taxes for me. I remembered reading somewhere years ago that the government couldn't force you to do your own taxes. It was then that I decided to let them do mine for me, and not pay someone, or bug someone else to do them for me. Also, I couldn't care less about following the tax changes each year.

Re:How about... none?

[DudeTheMath]

A Constitutional amendment can be unconstitutional if it conflicts with a part of the Constitution that came before the amendment itself. Income taxes were found to be constitutional, but the question of income taxes did have to be looked at by the Supreme Court.

Thank you for playing. What part of "amendment" is giving you trouble? By definition, any amendment must supersede any previous text (original or earlier amendment), I suppose premised on the belief that the people really know what they want, this time.

Consider the amendment repealing Prohibition. Would you argue that, because it conflicts with the amendment enacting Prohibition, it is unconstitutional? Or suppose we passed an amendment restriciting the vote to white male property owners thirty years old and up; is that unconstitutional because it conflicts with the amendment granting women the vote, or the one granting the vote to eighteen-year-olds, or the one granting the vote to blacks? Of course not! If the people (i.e., the Congress) pass an amendment, and the required supermajority of states ratifies it, then, no matter how ridiculous, it is the law of the land.

Here in sunny Florida, we know all about ridiculous amendments. It is in fact possible to pass two contradictory amendments in the same election, mostly because a majority seem to believe that if it made it to the ballot, it must be good, so the sheep vote "Yes" (or is it just because "Yes" is always the first option?); now what?

Re:How about... none?

[drxenos]

I think I'd rather keep my income and pay taxes, then make only $7k/yr.

You do know that your

[DRAGONWEEZEL]

Tax preparation software is deductable right?

Re:You do know that your

[jaredmauch]

Generally speaking, yes. YMMV depending on your situation.

Re:You do know that your

[CastrTroy]

I'm from Canada, so this probably doesn't apply to me, but I'd like to know more about how this works. Is it a deduction as in

A) I paid $39.99 for my tax software so I pay $39.99 less in taxes.

Or

B) I paid $39.99 for my tax software so I deduct $39.99 from my total income, so I don't pay income tax on it, but I still don't end up getting $39.99 back. I probably end up getting $20, or less depending on which tax bracket I'm in.

If its A, I kind of don't see the point of them charging in the first place, you should just be able to go to the store pick up a copy of the software, and the government send a check to the company after the software is used to file the tax return. Although, I still might opt to do it by hand, so I can still see what's going on, and so that I can still claim things that for some reason the software doesn't let me enter.

Re:You do know that your

[DRAGONWEEZEL]

I may not be correct here, but I believe that with most tax deductions B is the correct situation.

Reducing your taxable income, so that the ratio of what you paid to what you should have paid is larger in your favor.

Re:You do know that your

[humblecoder]

Tax software is only deductible if you itemize deductions. Also, tax software is considered a "miscellaneous deduction". For miscellaneous deductions, you can only deduct the amount that is above 2% of your income. Therefore, for most people, tax software will not end up being deductible.

By the way, I am not a CPA, but you can reference http://www.irs.gov/pub/irs-pdf/i1040sa.pdf if you have any doubts.

Re:You do know that your

[nolife]

Yes YMMV.
It is globbed in with a other potential deductions that must exceed 2% of your adjusted gross income before it even can be considered. "Job Expenses and Certain Miscellaneous Expenses" on the Schedule A is the section it is under.

I've used multiple systems

[cspariah]

I generally use whatever is the easiest for the amount of work I had to do. When I was in college, I had a small trust fund that my parents had set up to pay for as much of school as possible. During that time, the accountant who managed my trust fund also did the taxes. When the trust fund ran out and I was a barely-employed college student, I did my 1040EZ by hand. When I got out of school and had a real job, I did the 1040EZ via the web, I think for free. At some point, something kicked in (I think the deduction of my college loan interest) so I had to switch to a 1040. One year Massachusetts still let me do it online, the next year they had shut down their own program but sent me a free voucher for Intuit's website. I used Intuit's website until my 2004 taxes, when I had to prepare federal, MA and CA at the same time. The web interface didn't do this as nicely as the stand-alone software, so I switched to the stand-alone. Kept using the stand-alone in 2005 when I had some obscure form -- schedule K, maybe? -- because of money I inherited from my grandmother, who passed away that year. I also liked it because I could mess around with numbers for my IRA and see what would work best for me. It was especially helpful when I had to file an amended return -- CapitalOne sent me a form that they were choosing '05 to declare a cancellation of debt (long story), and then, AFTER I'd filed, they sent me another form saying, "We take that back, we're gonna do that some other time." I'll most likely be using TurboTax again this year. I've got another schedule K, and I think I'll be itemizing my deductions this year. It does a good job of reminding me of the limits on various deductions and the like.

Re:None at all

[gmb61]

Most of us who e-file do so because we are expecting a large refund and want to get it as soon as possible and are willing to pay a little to get the money sooner. Personally, I e-file the minute I have received all my W2's and 1099's, usually late January/early February. If I actually owed the IRS money, I would snail mail the return on April 15th like many, many other people do, so that I could hold onto the money for as long as possible.

You Americans are around 20 years behind the time

[jb666]

Here in the UK I can file all of my self assessment details and calculate the tax payable at the Inland Revenue website, and yes, this does work just fine with Firefox on Linux.

                  John

Dinged every year. No dupes, yet.

[Cragen]

I do my taxes by hand (and brain) the exact same way every year (w/deductions) and I get a different error code each year. Seriously, I get dinged every year, but for a different reason every time. Never the same reason twice. And I do it the exact same way every year. If I ever get the same reason two years in a row, I'll figure out that I am getting close to right.

Obvious question

[kiwimate]

Simple solution: just stop paying it. If the IRS takes you to court, simply point out that the IRS tax code is not based on or empowered by any law. After all, for you to be committing a crime, you have to be breaking a law.

So how long ago did you stop paying it, and what's happened since?

Oh, and so as to not get off-topic...I usually use TurboTax, but this year I've had a headache of a year with buying a house and all kinds of other complexities, so I'm going the tax preparer way. For the sake of a hundred dollars or so, it's just worth the peace of mind for me this year.

In New Zealand I always just filled out the forms by hand. Here? Not a chance...it's insanely complicated. The cost of TurboTax is dwarfed by the amount of time I'd spend doing it by hand.

Depends on income level and type...

[Lanboy]

Your question is clearly excessively vague, but I'll bite.

If you are going to take the standard deduction, then do it with a scractchpad or the IRS web site.

If not I recommend turbo-tax premier up through thier home and business software, or an ongoing cordial business relationship with a tax accountant or tax lawyer. I personally like trurbotax especially if you are trying out hypothetical situations. (Hmmn, maybe that was actually a home office expense, or what if I paid a lot more for that?) but a good tax professional can really open your eyes about what you should be paying. They know what the govies care about and can run the edge for you.

Intuit was a bunch of dickheads a few years ago (registering per computer, very bad idea and it cost them) and TTax is windows and mac only but life sucks. Maybe wine can get it running, or use a vmware running that windows 2000 work image.

If you have employees you should establish a relationship with a tax accountant or tax lawyer.

Re:Depends on income level and type...

[east coast]

Your question is clearly excessively vague, but I'll bite

I never asked a question.

B, or it is not deductable at all.

[Lanboy]

A. is what is refered to as a tax credit, which are great and you should jump on them when you see them.

Deductions need to be over the standard deduction to be worth the effort. Tax preparation software as well as accountant fees are generally fully deductable, reducint the amount of taxable income.

A good accountant can help you find things that are deductable, the home office is a beuatiful thing.