Tax Software and Advice Thread (2008)

[dmention7]

In the past I've always used Tax Cut, and been perfectly happy with the software, but I wanted to get some other opinions. Specifically, I've been considering just using TaxACT, since their online federal filing is free and includes e-filing. I'm not too worried about state filing, since that pretty much just involves plugging in numbers from the federal return.

I should have a pretty basic return this year--one W2, and some deductions for mortgage interest and a couple of donations, so I don't think I'll need anything fancy.

Has anyone else used TaxACT before? Anything weird to watch out for?

(also, post any other 2008 tax questions in this thread!)

 

[cosmicspd3]

well taxcut is free online, and the federal? is free online too. Ive never done my own taxes yet.... but I have taxcut 2008 to try this year..

 

[AJ]

I've only looked at online programs like Turbo Tax and for basic taxes year by year I like the way it keeps all the info from past years. For the last two years we have gone to place we use for our tax needs. With the rental property it's better safe than sorry.

 

[dmention7]

Main reason I used it last year is because I saw the deluxe version in a store for $20 and it came on a 2-gig USB drive, and I kind of wanted the USB drive... lol

Anyways, I'm giving TaxACT a shot as we speak. It's free, so I guess the worst case is I waste an hour or two.

 

[Jana]

I've heard good things about TaxACT. People have seen higher returns with TaxACT over TurboTax. Since you can use TurboTax for free as well (up to the point of filing), I'd be curious if this really were the case.

 

[dmention7]

If I have the time, maybe I'll run my return through TurboTax's free online service and report back if there's a difference. I have a pretty basic return, so I'd guess not, but it never hurts to check!

 

[Picklz]

Just make sure whichever one you choose will offer itemizing (if you need it). Turbo tax will ask you some questions and then show you which direction is better (standard deduction or itemizing). I've used TurboTax for the past 4-5 years, I'm sure others out there are just as good but I see no real reason to switch, I like that all my previous years filings are stored in one spot for easy review/access if needed, and importing last years information is easy that way. In past years I've used just the basic, but with the home and other investments I have now, I jumped up to Deluxe this year.

 

[ZoomZoom Diva]

If you have simple taxes, I would just do the taxes on paper and send them in. I have found I can do my taxes quicker and easier by hand than using software... as the software asks for enormous quantities of information that are completely irrelevant to the tax forms.

 

[dmention7]

I agree with that to a certain extent. My main reason for preferring software is that I would rather be given superfluous prompts for information than miss an important entry because I did not know about it, or did not understand it.

Granted, you are probably coming at this process from an entirely different perspective than I am. Where you see the software asking for information that is irrelevant to the actual forms, I might see it as speaking ordinary english... lol

Anywho, it only took me about 30 minutes to get everything done today (and yes, about half that time was spend clicking "no" or "skip this section" hehe)

 

[DrWebster]

Something for everyone to keep in mind -- if you got a stimulus check back in 2008, expect your refund (if any) to be reduced by about that amount. That is, if you got a $1k Federal refund in 2008 (for the 2007 tax year), and the amount of tax you owed in 2008 is about the same, expect to get only a $400 refund this year if you got a $600 economic stimulus check. Basically, those stimulus payments were simply advances on any refund you had coming for the 2008 tax year; your employer automatically adjusted your withholding to compensate. I have a feeling a lot of people will be surprised by this, wondering "where did my refund go?" when in reality, they got a good chunk of it back in 2008.

 

[dmention7]

Are you sure that's how it works? I know if you got less than $600 last spring, you could be eligible to have your refund increased by the difference. Though, without directly comparing the tax tables, that could just be a semantic difference. I always was under the impression that stimulus payments like that were recouped over a much longer timeframe.

 

[DrWebster]

I know if you got less than $600 last spring, you could be eligible to have your refund increased by the difference. Though, without directly comparing the tax tables, that could just be a semantic difference.

You're probably right in that it likely varies based on which tax bracket you're in, but I can tell you that our federal taxes only went up by $200 this year, yet our refund is about $1100 smaller.

 

[JustROLLIN]

I didnt find that to be true, as I received a $600 stimulus, but my refund deduction did not correlate 100%.

On another note, I normally use TurboTax for my online filing. I actually started to use it again this year, but ran into trouble when trying to enter options trades I made earlier in the year. My friend then told me that TaxCut allowed a direct upload of a summary file from my discount broker. Soooo, I ended up using TaxCut. I had zero issues and ended up with quite a bit larger return....although I have no idea how. LOL.

 

[dmention7]

Colin, one factor there is that you bought a house in tax year 07 (as did I), and I forget the specifics, but there were benefits for first-time buyers that I received last year, but obviously not this year.

 

[DrWebster]

Colin, one factor there is that you bought a house in tax year 07 (as did I), and I forget the specifics, but there were benefits for first-time buyers that I received last year, but obviously not this year.

Possible, but all of the numbers between 2007 and 2008 for us are very close...except for the amount our employers withheld, which was down by about (not exactly) $1200. We actually had more deductions in 2008 than 2007, but they generally just offset the slight increase in income we had. We didn't change any exemptions or anything else. I'm going to call our CPA this afternoon to get the final word, but I'm pretty sure this is how it works.

 

[Jana]

Something for everyone to keep in mind -- if you got a stimulus check back in 2008, expect your refund (if any) to be reduced by about that amount. That is, if you got a $1k Federal refund in 2008 (for the 2007 tax year), and the amount of tax you owed in 2008 is about the same, expect to get only a $400 refund this year if you got a $600 economic stimulus check. Basically, those stimulus payments were simply advances on any refund you had coming for the 2008 tax year; your employer automatically adjusted your withholding to compensate. I have a feeling a lot of people will be surprised by this, wondering "where did my refund go?" when in reality, they got a good chunk of it back in 2008.

That is not correct, so you probably should check your facts before posting up.

The only reason you need to indicate what you received is so they can calculate if you'll receive any additional refund on your tax return. If you received the full amount, then you won't receive anything additional but they also do not subtract it from your return. (www.irs.gov)

 

[Picklz]

Jana has it correct.

 

[Jana]

Possible, but all of the numbers between 2007 and 2008 for us are very close...except for the amount our employers withheld, which was down by about (not exactly) $1200. We actually had more deductions in 2008 than 2007, but they generally just offset the slight increase in income we had. We didn't change any exemptions or anything else. I'm going to call our CPA this afternoon to get the final word, but I'm pretty sure this is how it works.

Your deductions just lower your taxable income. So ifyou have about $1200 less in taxes withheld, that would be the greatest impact on your refund (which is why you are seeing the difference in your refund). Increase your withholdings if you want to see a larger return (or I should say, reduce the number on your W4, as you'll have greater taxes withheld).

 

[Workdawg]

Or decrease withholdings/increase exemptions if you don't want to give the govt a free loan

 

[ZoomZoom Diva]

Or decrease withholdings/increase exemptions if you don't want to give the govt a free loan

Agreed. Just put the amount each check into a savings account, write it in a notebook to keep track of it... and you get two "refunds" the first year you do it

I bought my china cabinet with the "extra" one... I bet others would have uses they would find more interesting.