Tax Preparation Software Review

The IRS has extended your due date to July 15^th, 2020 but don’t wait till last minute. 

These tax software reviews are based on my ~20 years of filing tax returns online while running my businesses and as an employee. Also do my sister’s tax returns who’s health issues kept her below the poverty level. Have encountered several challenging situations was able to solve and file using different programs. Don’t overpay to get them done. Most people can do this easily without the upgrades offered to you.

Stimulus Checks, for people who don’t file taxes: IRS.GOV website front page there is a box “Non-Fillers: Enter Payment Here”. Simply enter your bank’s routing number and account number. Both are on your checks, or you can look them up online. Don’t pay anyone to send in this information.

If your Adjusted Gross Income (AGI) is under $69,000 and you use the standard deduction, filing your federal taxes are free. Normally a fee to do state taxes. AGI is your gross income less 401K/HSA deductions plus interest & investment income. If your income is over $69,000 you can shop several programs below to save. With higher standard deductions of $12,200 for single and $24,400 for married couples, approximately 90% of filers only need standard 1040A.

On the IRS.GOV home page click the box “Do Your Taxes for Free”. Click the box “Choose a Free File Online Product”. Then you can read which programs you qualify for. IRS.GOV provides “Lookup Tool” to prequalify you showing which programs work for you.

The terminology of taxes is confusing. The IRS provides Publication 17 “Your Federal Income Tax (for Individuals)”. It is free and explains plain language with more detail what you need to do in each tax section and box no. if you are confused. This was my bible from the days of preparing my taxes on paper. Between Publication 17 and Google have figured out several complicated situations correctly.

FreeTaxUSA.com - did my sister’s taxes in about half hour. This year she needed to cash in a savings bond and required filing Schedule B Interest form. FreeTaxUSA has simple navigation between sections and help explanations were short and easy to read. Comfortable to use. Uploading last year’s PDF form failed, but no issue entering data. If you have any experience with a 1040A provides basic support State return costs $14.99.

TaxSlayer.com - have not used yet but gets great reviews. $0 Simple tax return including state tax return. If you don’t qualify starts at $17 plus additional for state return. Premium is $37 and Self Employed is $47. Will work for most people who are comfortable filling out forms with basic support.

TaxACT.com - used for my sister’s return until this year. The fee they wanted for a Schedule B Interest form drove me to research FreeTaxUSA and TaxSlayer. Good program for those who are comfortable filling out forms with basic support.

CreditKarma.com - has expanded into tax preparation. All basic federal and state returns are free. Has a new entrant only a few reviews, but a good choice if you made over $69,000.

H&R Block (hrblock.com) Online & Phone App - On of the largest nationwide tax preparer organizations. Their training is the standard CPAs often take annually to know updates. Have not used myself, but Dad and Mom worked for H&R Block after retiring. Reviews are good too. Online provides Free, Deluxe, Premium and Self Employed levels that are higher priced. If your situation is more complicated may well be worth the money.

TurboTax.com Online & Phone App - been using for almost 20 years now and is my favorite. Software suggests deductions you may have missed. Excellent online and community support if you have a questions. Makes filing painless. If you have business, investments, side hustles and itemize worth the money. However the upsell offers are Annoying! Why do I have to answer the same question multiple times? Do take advantage of any discount from credit union, Costco or filing early.

CPA/Tax Preparers - If you have multiple businesses, investments or rental properties well worth the investment for advice, professional contacts and guidance. Recommend my former CPA in CA any day. Wish had those investments.

Enjoy using online tax software since they are updated daily, very accurate, and catches my errors and typos. E-filing and direct deposit is the way to go. For most of us this is a simple process of less than 2 hours. Start with all your forms, because hunting for forms just make data entry and tax filing seem to go on forever.

Last Minute Tax Advice / Software Review

 

Taxes are due Monday April 18^th 2016. If you haven’t filed, at least file an extension by Monday. Suggest you send an estimated payment with the extension request to avoid interest and penalties. Did that successfully when self employed and records were misplaced during our move.

All is not lost if you haven’t started. Did my own taxes and my sister’s taxes last weekend. Online tax software is wonderful and free if you earn less than $62,000. Very affordable for everyone else as well.

SCAM ALERT - the IRS will only contact you by mail. Ignore any scammer who calls, texts or emails you. The IRS will not arrest you without giving you time to repay first. Anyone who wants a prepaid card or Bitcoin is trying to Steal from you. Hang up and don’t answer them. See more on irs.gov website.

The big 3 tax software companies are TurboTax, HR Block and TaxAct. Used 2 out of 3 online software over the weekend to file taxes.

TurboTax used over ten years, except when had a CPA for my business. Very simple yet detailed questions to get you every deduction you deserve. Support, descriptions, and researching tax / system questions has improved every year. Millions love TurboTax. There are different levels and prices depending on the complexity of your return. As an employee with a home mortgage & charities was simple. Even had a discount through credit union & Costco this year.

Only annoyance this year was the upselling as you answer questions. Patiently had to say no upgrades and did not need audit protection. Did have one technical issue, which has happened before. Imported a form from my bank to save time. During the review before filing that form caused an issue. Had to delete the imported form and type the data in by hand to resolve it.

Overall give TurboTax a 9 out of 10 and highly recommend it.

My sister earns below the poverty line, but is self-employed and rents out a room. She has the most complicated taxes. Last year used TurboTax to file her taxes, but this year could only do the EZ/A form for free. Would have had to upgrade to a higher level. Had to use another software for her taxes.

She had used TaxAct before, so tried that instead of paying. TaxAct has a great feature, importing a PDF of last year’s taxes. That saved a lot of data entry and time. The questions were basic and easy to understand. Referred to last year’s tax forms, and was able to complete & E-file her taxes on the first try (for free).

Highly recommend TaxAct for preparing your taxes, especially if you are below $62,000 income. Give TaxAct 8 out of 10.

HR Block has online tax software with a great reputation. Do not have personal experience, but expect it is as good as TurboTax and TaxAct. E-filing your taxes online is the way to go. The other benefit of online software is always having the latest software and security updates versus buying a disk.

Don’t panic. Get your W-2’s, bank statements, and charitable deductions together. Then sign in to one of the big 3 online services. If you get stuck on a question, search inside your software. Next Google the question, including your software name. Someone has figured it out before you. You can be done with taxes in a few hours.

Hope you even get a tax return this year.