Turbo Tax vs. family help

kmurphy2131 · January 2015

I'm looking for experience with various ways of doing taxes. I have always had my dad just do my taxes but at this point between a minor miscommunication and because my husband is not comfortable with them being done at the last minute, we are not going to do that this year. My husband has had his taxes done by a family friend who is a retired account for free. I am not super in love with that idea because he does not really ask any questions just takes whatever papers my husband gives him and paper files. I am worried we may owe because I did last year and did not change my withholdings until May when I found out about the issue in mid-April. I want to file through turbo tax so that I can look at all the possible available deductions in hopes we do not owe/do not owe much. We got married last April so this is the first time we are filing taxes as married and I am unsure if we are filing married jointly or married but filing separately.

Questions:

1) Any reviews/recommendations about turbo tax and is it worth paying the $35 or should I do the free program?

2) married filing jointly vs married filing separately - does it have any impact?

3) if we go with H's family friend - is there any place I can get a good list of what deductions exist so I can make sure that we are taking advantage of what we can before he does it?

Thanks!

kyrgyzstan · January 2015

1. I generally do our own taxes. I run it through H&R Block and TT just to see if there's a difference.

2. There is a huge impact. There are almost zero instances where MFS is better for you. If you're doing IBR on your SLs is one where maybe it could be better. It affects deductions and credits. MFJ is better for almost all taxpayers. You can run it both ways on TT/HRB to see the difference.

3. http://www.irs.gov/Credits-&-Deductions

Are your taxes particularly complicated? Do you own a rental, have a side business, foreign income, etc.? If not, there's no reason why you can't do them yourself. It's something you should learn how to do anyway, and the programs walk you through it. Just avoid the parts where they upgrade you (you have to click no thanks to these additional benefits several times).

als1982 · January 2015

Unless you have a complex situation, Turbo Tax should be fine. (We used it last year and plan to again.) You should check as I think the free version might only allow you take the standard deduction.

It's my understanding it's almost always best to file jointly.

Typical tax deductions to consider are children, student loan and mortgage interest, and charitable deductions, including gifts in kind and mileage. (Do note you can deduct donations of amounts to qualifying organizations of $250 or less without a recipt, in case you've happened to lose those over the last 12 months). There may be additional deductions if you're in school, pay an extensive amount in medical bills, made qualifying energy improvements on your home, and incur qualifying work expenses.

kmurphy2131 · January 2015

kyrgyzstan said:

1. I generally do our own taxes. I run it through H&R Block and TT just to see if there's a difference.

2. There is a huge impact. There are almost zero instances where MFS is better for you. If you're doing IBR on your SLs is one where maybe it could be better. It affects deductions and credits. MFJ is better for almost all taxpayers. You can run it both ways on TT/HRB to see the difference.

3. http://www.irs.gov/Credits-&-Deductions

Are your taxes particularly complicated? Do you own a rental, have a side business, foreign income, etc.? If not, there's no reason why you can't do them yourself. It's something you should learn how to do anyway, and the programs walk you through it. Just avoid the parts where they upgrade you (you have to click no thanks to these additional benefits several times).

Thanks. Our taxes really shouldn't be that complicated. I have two jobs but recieve a W2 for both, H has two jobs and gets a W2 from one. He may end up with a 1099 this year from the other (one of the reasons I think we may owe). We rent our apartment, and I pay back student loans. Otherwise nothing crazy.

I want to be independent and learn to do it myself - but H likes the idea of someone experienced doing it.

kmurphy2131 · January 2015

als1982 said:

Unless you have a complex situation, Turbo Tax should be fine. (We used it last year and plan to again.) You should check as I think the free version might only allow you take the standard deduction. It's my understanding it's almost always best to file jointly. Typical tax deductions to consider are children, student loan and mortgage interest, and charitable deductions, including gifts in kind and mileage. (Do note you can deduct donations of amounts to qualifying organizations of $250 or less without a recipt, in case you've happened to lose those over the last 12 months). There may be additional deductions if you're in school, pay an extensive amount in medical bills, made qualifying energy improvements on your home, and incur qualifying work expenses.

Come to think of it we may only qualify for the standard deduction anyway. I have student loans and had high communting costs earlier this year (tolls are deductible from MA state taxes) but otherwise I'm not sure what we qualify for. it may be best to just do the standard deduction I will have to look into it. Thanks!

hoffse · January 2015

1) Any reviews/recommendations about turbo tax and is it worth paying the $35 or should I do the free program?

TurboTax is fine. This year they did kind of a shady thing where they moved Schedules C & D to the premium version (if you wanted to be able to do those electronically). We need schedule C so we switched to HR block this year. The programs are virtually identical, so from now on I will simply buy whichever is cheaper for our needs. They both work the same way, and switching back and forth between them is NBD from year to year.

2) married filing jointly vs married filing separately - does it have any impact?

Like PP's mentioned, huge impact. You almost always want to file jointly unless you have an unusual situation.

3) if we go with H's family friend - is there any place I can get a good list of what deductions exist so I can make sure that we are taking advantage of what we can before he does it?

If you don't itemize your deductions (and you probably won't itemize unless you own a house), then the deductions you are most likely to encounter are student loan interest (these are capped) and the standard deduction. There are also personal exemptions that you each take, and like PPs said there are deductions for other special situations. Many deductions require that you itemize, though, and if you don't itemize then the list gets significantly shorter.

TurboTax and HR Block will ask you questions and add up any deductions that would be itemized. If your itemized deductions are less than the standard deduction, then the program will automatically give you the standard deduction. If your itemized deductions are more than the standard deduction, then you will itemize on Schedule A. I'm pretty sure you need the paid version of one of these programs to get schedule A, but you don't need the premium versions. You can buy them on Amazon, and I'm pretty sure there's a chart to show you what each version contains.

Most people don't itemize until they own a house and can deduct mortgage interest and property taxes. HOWEVER state and local income taxes are also itemized, so if you pay a high state income tax rate or local taxes (H and I actually have to pay local income taxes on top of our state income taxes) you might itemize even without a house. I would check your W2's and quickly add up what you guys jointly paid in state/local income taxes. If you're close to the standard deduction, then I would probably get the paid version of TurboTax or HR Block with the Schedule A included and just let the computer do it for me. Even if you wind up with the standard deduction, these versions are not very expensive, and then you know it's done correctly.

If your state income taxes are way under the standard deduction and you don't own a house, then the free version with just the standard deduction should be fine.

The standard deduction for 2014 is $12,400 for couples who are married filing jointly.

vlagrl29 · January 2015

We have a CPA do our taxes every year. Filing joint is the way to go - it has more benefits and filing single. We have lots of deductions because of self employment so it is worth it to us to hire our CPA.

Knottie37373131 · January 2015

I use H&R block every year and never had a problem. My taxes are very basic as I am not a homeowner and really only have to put in my W-2's most years. This year Groupon has a deal that I just bought today for H&R block. The Premium version plus state is only $31.99. This also includes 5 free e-files. I normally use the CD they send to my house every year but that was still more expensive being that the Deluxe was $30.00 by itself and Deluxe with state was $39.99.

I have never tried turbo tax before but I remember my mom never liked it so she never bought it. I am experienced using H&R block and have always found it to be simple and self explanatory.

https://www.groupon.com/visitor_referral/h/3981d315-8395-45be-a521-e256a1b7cb94

smerka · January 2015

If your husband gets a 1099, I doubt any software will be free. Two things I feel I should mention. If your family friend will have you sign the return as Self Prepared, I would just do it yourself. I've seen a lot of people get screwed over when they pay a preparer who then has them sign as Self Prepared. If you have insurance through the ACA marketplace, there will be new forms to fill out so a retired accountant might not be up to date on all the changes. If you get insurance through an employer or govt program, it shouldn't be any different.

MommyLiberty5013 · January 2015

Another thing is that in this tax climate, the little nitty-gritty things can change, which theoretically Turbo Tax and HR would be updated for...your dad and a guy who used to be an accountant, might not be current on their tax info.

Also, it's a good principle to avoid mixing your financial matters with personal relationships. If you need to have someone do the taxes for you, than hire a well-reviewed neutral party.

Wulfgar · January 2015

I have used turbo tax for years prior to the free files that came out a few years ago. It has only been recently that MW and I don't qualify for the free versions which work just as well as the paid for version.

My company is getting a reduced cost version again this year from our 401(k) provider for TurboTax so that is what we are going to use.

I am not sure about H&R Block, but TurboTax pulls my W2 information from the ADP site so I don't have to enter in anything from my W2s which saves time and errors.

As others have also said, I wouldn't want to go to anyone that isn't up on the latest IRS rules and if you got your health care from one of the exchanges and had a partial subsidy I would really have someone or a program like TurboTax do your taxes this year. I am wondering if that is one of the ways that the Federal Government is trying to post employment during the winter months by making the tax code so complex that people that use to be able to do them by themselves can't.

Melliewood · January 2015

Has anyone used TaxAct? That's what I have been using for years.

Erikan73 · January 2015

If you wait until after January 20th, you can go to the irs website & go under personal & free e-file. If you make under $60,000 you click on one option. This allows you to pick from several different IRS trusted companies (H & R Block is one of them) to do your taxes & e-file them for free. It's very easy because the H & R block site asks you several questions regarding changes in your life, have you gotten married, did you change jobs, etc & then if you try to itemize, it will determine for you if you will get better results with the standard deduction or with the information you listed for itemizing. If you make over $60,000 I believe it's $19.99 to do it. Also before paying to e-file your state taxes, go to your state tax website. I know in Ohio you can e-file for free, all you have to do is re-enter your w-2 info. To me, it's worth the free filing to take 2 minutes or less to re-enter those figures. And if you have local taxes, if you can't figure them out, I know the ones in my area, if you fill out the basic info on their forms, include the w-2, they will do the work for you & if you owe, they will send you a bill, but check with your local tax department to see how they work.

One other tip, because of us not having any kids and how the state of Ohio tax laws are written, my husband and I the past two years end up with a larger return filing seperately. I still work up the numbers both ways (married vs married filing seperate) to see which way we end up with more money in the end.

smbenevides1989 · January 2015

@melliewood I use TaxAct.

I have been using it for the last 3 years. Easy to use and it is step by step.

kmurphy2131 · January 2015

Thanks for your advice everyone! I think that I am going to prepare through either HR block or turbo tax. Even though we can get it done for free, I too wonder if he is outdated.

Dreamkeeper03 · January 2015

I use turbo tax and my FIL. Filing jointly is usually better, but in MT married filing separately on state taxes only got us a way bigger refund for state, same for my ILs. I've always been happy with turbo tax even though I could just run my stuff through and file my own for free (I'm lazy when it comes to that)

dancinxqueen324 · February 2015

We always have TONS of forms because we have several free-lance jobs and Turbo Tax works great. We can't use the free one, but it still ends up being cheaper than having them done. It's very easy to put in deductions and the program walks you through step by step. I also enjoy tedious organization like that, so I don't mind going through all of my receipts and bank statements to find deductions myself.

Our first time filing as a married couple, my husband had worked as a waiter with all cash tips, so he hadn't had any taxes taken out all year. When I tried MFJ, I got dinged for his income not being taxed. When I tried MFS, we didn't get any tax breaks. It ended up working out better to file jointly in the long-run, but you can definitely futz around with it and see what works best for you.

kyrgyzstan · February 2015

Dreamkeeper03 said:

I use turbo tax and my FIL. Filing jointly is usually better, but in MT married filing separately on state taxes only got us a way bigger refund for state, same for my ILs. I've always been happy with turbo tax even though I could just run my stuff through and file my own for free (I'm lazy when it comes to that)

Montana is one of the few states that allows a different filing status for couples federally and locally. California, for example, only allows it if one or both members of the couple are in the military. South Carolina and Georgia don't allow it even with military.

Turbo Tax vs. family help

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