Quick, someone order a keg, and I’ll build a shot luge. It’s time to celebrate tax season. Alright, maybe taxes aren’t quite that exciting. Unless, of course, you’ve never done your own taxes before.
That’s right. I, Broke Grad, do solemnly swear that I have never done my own taxes. After decades of being claimed as a dependent and a few years of using my free accountant (a.k.a. Dad), I am finally going to do my own taxes this year.
With that being said, I have a question to ask those of you who have done your own taxes before. What is your favorite tax preparation software and why? If you don’t use software, how do you prepare your taxes? By hand? Hire a CPA?
From the research I’ve done, the three most popular tax preparation software programs are:
I’m planning to use the online version of one of these programs to prepare my taxes, but I haven’t decided which one yet. So, please, share your opinion or personal experiences with tax preparation software and help me make my decision.
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I’ve done my own taxes for the last 3-4 years now. I’m a 25 year old full time grad student (in accounting, actually) who only worked part of the year last year. I left my job to attend school full time. I have minor savings and I still live at home. My income is simple enough for the 1040EZ. I don’t know about your entire situation, but to me, if you aren’t itemizing your deductions (and to do so, you would need more than $8950 to deduct. For most people without a mortgage, that’s a hard number to hit. So, if you are just taking the standard deduction, I would recommend filing online directly with the IRS. The website for their forms is http://www.irs.gov/efile/article/0,,id=201897,00.html
You can get the forms themselves at most public facilities like the post office or local library, if you really want to go old school. Cost will be just the postage to mail them in, and getting your refund will take a little longer. If you’ve got more complicated deductions, I can recommend turbo tax. I have used that in the past, but once I saw how easy my taxes were to do, I simply went with the forms every year.
That advice is only for your FEDERAL return. State returns vary, and some states don’t even have them. Living in NJ, I don’t have such a luxury. However, our return is no more complex than a federal 1040A.
Big fan of the blog. I have been reading over the last year or so. When I decided to go back to school myself, I came across your site on my search for personal finance for grad students.
I do my own taxes and always have. I have used free file tools online (www.irs.gov) provided by the IRS for federal and then pen and paper for all my state returns. As of last year I started working for H&R Block and can file free using their in office software (much different from TaxCut). Since I am strongly biased I will not provide my opinion on the best software.
If you do use online software I strongly suggest you also prepare the forms manually using the full 1040 and 1040 instructions. A copy of Publication 17 (can be ordered for free from the IRS) will also be valuable. Taxes aren’t as complicated as they seem if you are willing to put in the effort. This will provide insight into the system and may even save you money as you may decide (as I did) that the time spent on pen and paper returns does not justify the cost of software.
If you have any questions feel free to email me and I will respond as soon as possible.
Lucky you. My parents have been making me do my own taxes since I was 15!
I’ve only used TurboTax out of the three mentioned. It’s easy, it walks you through the steps, it has immediate chat assistance. You can always get direct deposit which provides a quicker return. I filed my taxes 1.5 weeks ago and I already have my money. Cha-Ching!
TurboTax also does this thing where it checks your taxes for any errors you might have entered.
I give it 5 of 5 stars.
Even though I am 31, last year was the first year I did my own taxes. (My dad’s an accounting professor! It’s like a waste of resources to not use him!)
Anyway, I used TurboTax as well. Being a broke grad student myself, I liked that the online stuff was free if you are broke enough (my stipend is below the AGI limit).
I just blogged about this…click here to read the entry.
I use TaxAct, but would check out IRS free file. There are lots more. Sorry for the self promotion but I just wrote the entry like a week ago and it’s directly on point.
Another turbotax user. We used the online service last year for free, and as long as you don’t try to do e-file your state return (they charge you for it – we just mailed ours) it was a pretty good deal all around.
I didn’t do my taxes last year but I did my ex’s bf taxes using TurboTax. It was SO easy. I plan on doing my taxes this year and I am super excited to do it myself.
Good luck.
I’ve used TaxACT and TurboTax in the past. I vastly prefer TurboTax, if I can use it for cheaper than TaxACT. TaxACT always leaves me wondering if something wasn’t covered, or if I did something wrong – TurboTax seems to cover all the bases and I’m never concerned at the end of it. They just seem to explain things better.
I’ll be using the H&R Block TaxCut software for the first time this year (may or may not file with it, but I’m at least going to run the numbers), so I’ll let you know.
Good for you sir – hitting 30 this year (omg i can’t believe i just said that), and i have yet to file myself. isn’t paying my accountant stimulating the economy anyways?! don’t mind at all doing my part
maybe next year will the THE year i jump in…i still enjoy waiting to see how much i’ve “won”!
Hey BGS – good luck on your returns this year! I’ve been doing taxes for quite a while now (and will soon have my CPA license in July!!). I’ve used both TurboTax and TaxCut in the past, though I’ve used TaxCut for the past three years. I would also agree with some of the other commenters regarding using the IRS Freefile option. The program has been greatly expanded for this filing year so check it out. If you aren’t comfortable with that, then I would go ahead and use TaxCut (just my personal opinion). Both TurboTax and Taxcut both “interview” you and make completing your taxes very easy. You’ll generally get a free Federal e-file option (5 with TaxCut), but you will have to pay for e-filing your state return if you don’t mail the paper forms in instead. The cost for this is about $20. So, if you are getting alot back from the state, then $20 may be a good investment to get your money back quicker. Keep in mind that states are running out of money and are delaying tax refunds (California for now). Anyway – sorry for the long comment, but good luck.
My dad does my taxes and he’s used all three of them and he says H&R Block Taxcut is the best out of all three…:)
I’ve always used H&R Block and they’ve been great…until this year. The form I needed to claim my credit for the Tuition & Fees deduction was not yet ready on H&R Block and I was eagerly awaiting my refund…So I went with TaxAct. They’re just as good except after every question they ask if you want to upgrade to the non-free version. You have to be careful not to click yes!
I have used Turbotax online and the download version of H&R Block. There is really not that much of a difference between the two. I did have trouble with the submission using Turbotax, but H&R Block has never given me any problems.
I do mine by hand for now (make a spreadsheet). My sister is becoming a CPA so hopefully I will be able to use her soon!
I’ve used TurboTax for several years, and really like it — clear, easy, thorough. It took all the Big Bad out of Tax Preparation for me. If you’d like to just up your general-knowledge-of-taxation quotient, then you should definitely look here for an explanation of the tax brackets, etc. http://moneysmartlife.com/2008-federal-tax-brackets-explained/ And then tell me if you don’t think there should be an extra bracket in between 32,500 and 76,000? That’s kind of a ludicrous gap in my opinion, one that seems like it could mean the difference between barely breaking even and having a beach house…
Also, for incomes under a certain level, many states offer free state e-filing as well — you’d have to check out your state’s revenue site to look for that.
I use TaxCut this year for the tax advisor service.
I used H&R Block TaxCut Free-File last year, because all I had was a 1040EZ. This year, I was able to get a promotional free copy of TaxCut Premium. This was a good thing – I had an internship that paid me over $600 as an independent contractor, so I had to file a standard 1040 for the first time. I’m a fan of the software, but I don’t think I’d pay the premium price to use it.
Next year, I’ll have to pay nonresident taxes to DC in addition to my federal taxes; I haven’t decided yet whether I’m going to go with TaxACT Online (because from what I’ve seen, they have the cheapest state return processing), or just file the old-school way. DC’s tax form is simple enough (I helped my roommate with his), so I may just use pen and paper.
I’ve evaluated the tax software industry for a large tax prep firm over the past year. The most comprehensive out there, by far, is TurboTax. They have the most dynamic calc engine and it’s thorough. However, it’s probably overkill for the typical college student — and more expensive. TaxAct and CompleteTax are good enough and will likely cost you less. H&R Block’s TaxCut is the least preferred and doesn’t really offer anything unique or differentiated – wouldn’t waste my time with it.