Tax software

[tea4one]

I'm asking this now so I am prepared and ready when I do see the software in the stores. For the past 4 years I have gone and paid to have my taxes done because I did it myself in the past and made a mistake and wanted to avoid that ever happening again. With the state the economy is in I am going to try and start doing my taxes again this year and saving the money from paying someone else doing it for me. What is the best software to use? What does H&R Block use? If I make a mistake will it find the mistake before I send it?

[Cinnamon Crazy]

TurboTax has been the leader in personal tax software the last few years. I've used the program and people I know like it a lot. As a tax professional my opinion is a bit biased in that I hate all home tax software...it's designed for people who don't know tax. If you're a Costco member, there is usually a week in December or January where they offer a coupon making the software insanely cheap.

Depending on your level of complexity, I would recommend TurboTax for items like wages, business income and itemized deductions. If your return offers a lot of difficulty, then it might help to have a professional look it over. Last year, a friend asked me to review their return and TurboTax computed the HSA form incorrectly. We had to override TurboTax in order to make it work.

If you have a really simple return: income, minimal itemized deductions, dependent care credits and educations credits, then you can always get help from VITA (sponsored by the IRS). These are usually held at libraries and community centers and they offer free income tax preparation.

H&R Block sells TaxCut, but that's not the software they use. All CPA firms I know do not use commercial tax software. I've not had any experience with TaxCut so I can't offer advice, but my CPA colleagues and I have a very low opinion of H&R Block.

Please know that if you do go to a paid-preparer like H&R Block or Liberty Tax, most of the people who prepare your return have specialized training on how to use their software to complete their return. That's it. They are not tax advisors. I apologize if I offend anyone, but most of the business CPA firms get is from correcting simple mistakes made by these tax shops. There is no legislation currently in CA regulating tax shops (not sure about other states). However, we CPAs have rigorous standards and laws we must uphold.

My SIL recently asked for my help. Her 2005 return was audited by the IRS (prepared by a local tax shop). It took me 2 seconds to locate the error. Apparently they prepared her return showing that she had a $10k sales tax deduction. Her income was only $45k. Huge error. Now she has to pay $3,000 in back taxes plus penalties & interest. The tax shop is only reimbursing her for a portion of the penalties & interest.

Sorry for the long response, but I hope it helps. Let me know if you have any questions. There are a couple of tax professioinals on the board that are more than happy to offer help.

-Anna

[tea4one]

What your SIL has to deal with is the exact thing I want to avoid. I get an offer in the mail every year to do my state taxes online and that would be easier for me but I don't feel very comfortable as far as how secure it may or may not be. I do have an HSA account so I would probably run into problems with that if I use software. The past few years I also had it directly deposited into my bank account and really like that you only have to wait a couple of weeks for it to be in there and available to use. I don't because I put it in my savings account.

[LakeMartinGal]

My friend is a CPA, and he uses TurboTax online! We happen to have an accountant that we trust implicitly, so we use his services, even though our business is almost non-existent! He's our go-to guy.

[Miss Giggles]

When you go to H&R block they are just using the pro version of Turbo Tax.

I took their tax prep class. Some of the employees are retired professionals but a lot of them just do it as a second job.

So it all depends on how complicated your situation is. If you just have the common deductions then you can do it yourself but any special circumstances should go to a professional.

[pharmarepgirl]

check your PM's!

[tea4one]

I checked my PM's and thank you for all the help it seems turbo tax is what I will be looking into and hopefully just be able to electronically send it in from my home.

To clarify some things here: the taxes are my personal taxes and I do not own a business. Other than the HSA account and possibly sick leave pay and you never know maybe even unemployment I can not think of any special circumstances there may be as far as doing my taxes.

I figure if I do it as soon as I get all the forms I will have everything back before the end of February if it is sent in electronically and I have it deposited directly into my account.

[Peweh]

I own a business, and I use HR Block, but I will say that the first time I went to have my taxes done for the business I had to get rescheduled so someone with the right "know-how" could help me. She is a CPA. So they're not a total tax-chop-shop. I wouldn't expect to go into their Walmart location and get my taxes done, however, that's where I agree they've just got people programmed to use their tax software.