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Old 02-25-2021, 02:53 PM   #41
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Used Credit Karma for the first time this year. My taxes are simple though; just a few 1099's.
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Old 02-25-2021, 04:47 PM   #42
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HRB basic cheapest version. Handles everything we need including SS, pension, capital gains, Roth conversion, and common deductions. The only thing I’m annoyed with is foreign tax credits and form 1116. It handled it but I had to manually initiate the form and the mini interview was pretty basic and I had to consult the IRS instructions. There are threads on this issue from several years ago and apparently the more expensive version wasn’t any better at it.

For state, I use Virginia’s free fillable forms online. Our state is pretty simple so no need to shell out for me.
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Old 02-25-2021, 11:49 PM   #43
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My bank had an offer to get Turbotax for $30 so I figured I would give it a try. This was the online version, so I don't know how it compares to the download version. It started out well, looked nice and was easy to follow. After entering some investment information, it told me I would have to upgrade to the $50 plan. Annoying, but that's not prohibitive so I continued. Entered my simple self employed income, and TT told me I would have to upgrade to the $70 plan. I saw where this was going, so I bailed out. The interface was nice, but not worth the added costs.

I also tried FreeTaxUSA today to see how it compared. I was pleasantly surprised how easy it was to use, but after trying a few different products I'm getting fairly good at entering tax forms. The only advantage I saw with H&R was the auto download of investments from Vanguard, nice to have but certainly not a necessity.

The good news is every tax program produced the same results (except EZTaxReturn which didn't record my Roth conversion as taxable income). They each have their quirks, but really any of these tax preparation tools would be acceptable.

If I can find a good price on H&R next year I might go with that, otherwise Credit Karma or FreeTaxUSA would both be great options too.
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Old 02-26-2021, 12:13 AM   #44
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.....

If I can find a good price on H&R next year I might go with that, ....
Watch near the end of Nov, I buy whenever I see the price around $22 or less.
There is usually a thread on the site about the price at that time
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Old 02-26-2021, 06:16 AM   #45
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The only thing I’m annoyed with is foreign tax credits and form 1116.
When I had REITs, I kept them in my 401k to avoid the tax madness. Last year I accidentally put most of my foreign exposure into my 401k. Seriously, I wasn't thinking. I just monitor the percentage from Vanguards portfolio analysis.

So this year, no 1116, just a low number that falls under the limit for filling 1116.

I'm not saying this is a sound strategy. I probably should spread my foreign exposure between retirement and non-retirement. I'm just saying it made my taxes less complicated.
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Old 02-26-2021, 06:40 AM   #46
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My bank had an offer to get Turbotax for $30 so I figured I would give it a try. This was the online version, so I don't know how it compares to the download version. It started out well, looked nice and was easy to follow. After entering some investment information, it told me I would have to upgrade to the $50 plan. Annoying, but that's not prohibitive so I continued. Entered my simple self employed income, and TT told me I would have to upgrade to the $70 plan. I saw where this was going, so I bailed out. The interface was nice, but not worth the added costs.
Are you sure it told you you had to upgrade? I forget the wording, but when I hit that for 1099-B it was more of a suggestion. Which I ignore every year.
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Old 02-26-2021, 07:25 AM   #47
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Are you sure it told you you had to upgrade? I forget the wording, but when I hit that for 1099-B it was more of a suggestion. Which I ignore every year.
The online version is different, but any desktop version (CD or download) can handle a typical 1099-B in Deluxe mode. TT will heavily suggest you do Premier, but you probably don't need it.

There are some things that Premier will do for you that you'd have to manually adjust (via forms) in Deluxe mode:
- ESPP
- Stock Options
- RSUs

I found Premier really helped with the above. Deluxe leaves it to you to make adjustments.

Premier also supposedly helps you with Basis information (non-covered shares). I have no visibility in to the extra help. I have non-covered transactions for last year and found Deluxe was sufficient for me since I had the information.
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Old 02-26-2021, 02:28 PM   #48
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• Individual tax returns: TurboTax Deluxe on Mac (amazon download). Handles a sole proprietorship just fine. I've been using this program since before Intuit acquired it (was called MacInTax in the old days). I e-file the federal and mail in three states. I have to wait for K-1s to arrive so I'm never able to file early.

• Partnership tax returns: H&R Block Business on Windows (amazon download). There are hints that a version of this software is also used internally by H&R Block tax prep folks (in the help documentation, it sometimes says "discuss with the client ...") The UI is quirky but after many years I've learned the tricks needed to get the job done. I e-file the federal and mail in three states.
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Old 02-26-2021, 07:32 PM   #49
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I discovered Credit Karma Tax this year after many years with Tax Act. Tax Act was getting too expensive. CKT was easy to use, straightforward and completely free for both federal and 1 state. I plan to use it from now on.
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Old 02-26-2021, 08:39 PM   #50
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I used to do on paper by hand, but later used TurboTax, or TaxAct. It seemed like no matter what I did with those I would get a note from the IRS a year or so later saying "here's some extra money we thought you'd like" or "we need more of your money." I guess the software can only be as smart as the person using it.

One year I got tired of the software and did it on my own until I got to AMT and it said I had to my taxes all over again, but this time the instruction booklet was written entirely in Martian, so I gave up and did TurboTax. These last few years I figured since I seem to get it a little wrong most of the time no matter how I do it, I might as well do it the old fashioned way.

My question is, what are the reasons to use a software package?

One is if you have to do AMT, given the Martian situation. Worth the $40 right there. But I haven't had to do that since that one year. Other than that, what is there to watch out for, for someone with a real simple situation? I have W2, then 1099-DIV. If I sell stocks then I have capital gains. No interesting investments so no 1099-INT. That's about it for me.

The other thing I can think of is deductions, but back when I used the software I would dutifully enter car payments, mortgage interest, contributions, etc. and it would come up with something about the same as the standard deduction... which seemed sort of weird, isn't the mortgage interest deduction supposed to be some giant benefit of being a homeowner? Anyway... no significant medical expenses, no commuting (2020 hah), no anything really.

Another thing I learned is remember to report your cost basis, if you have capital gains. But once again, software can't make up for the user being a klutz.
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Old 02-26-2021, 09:03 PM   #51
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My question is, what are the reasons to use a software package?
Some reasons I've had over the last few years.
  1. Foreign Tax Credit (from an Intl Stock fund)
  2. Figuring taxes with qualified dividends or LTCGs. The form for that is not straightforward.
  3. ACA Premium tax credit
  4. Keeping track and automatically transferring capital loss and foreign tax credit carryovers
  5. If I fill out my taxes and get another form such a 1099-INT I can just enter it and all numbers are updated without me having to refill out all forms.
  6. Same as above if I find on review that I entered a number incorrectly.
  7. Same as above if I have to file amended return.
  8. (upcoming) Figuring how much of social security is taxable.
  9. Ease of filling out forms. Not having to worry about my poor penmanship.
  10. Ability to E-file
  11. probably others I can't come up with right now.
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Old 02-26-2021, 11:26 PM   #52
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....

My question is, what are the reasons to use a software package?

....
A big one for me, is I finish the tax return, and the mail person delivers an amended or late to arrive tax form.

Now I have to change all the numbers related to income, etc. Doing it by had would be re-writing lots of forms, instead the software handles it all automatically
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Old 02-27-2021, 01:25 AM   #53
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Those all seem like pretty good reasons. I've been using "free fillable forms" which takes poor penmanship and my inability to add out of the equation at least. It also works for e-file, if I remember correctly. I've never had to amend a form, maybe because I usually file at the last minute. That's right, it's a clever strategy of mine. The w2 and a 1099-DIV are downloadable nowadays, so no late mail either.

I do realize here I am claiming it's simple while previously admitting to making many mistakes so... uhh... not sure how to explain myself. I do worry I miss some obscure thing that is none of the above but significantly affects the numbers. Or maybe some trivial thing that affects it by $5 but the IRS really cares about that $5 and they'll tell me about it after 10 years when the penalty has accumulated to something unreasonable.
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Old 02-27-2021, 01:30 AM   #54
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what are the reasons to use a software package?
My main reasons.

1. They do the math.
2. They send it to the IRS so I don't have to mess with printing, postage, and mailing.
3. They fill out all the lines of the various forms (such as the multiple forms for self employment income).

I've tried out a number of products lately, and still think I'm leaning towards Credit Karma for next year. I just like the way it's laid out better than the others, and just happens to be free (though I would gladly pay for it).
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Old 02-27-2021, 05:01 AM   #55
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I have used TurboTax and TaxAct and TaxHawk, my favorite is TaxHawk. And it's free for federal returns.
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Old 02-27-2021, 02:07 PM   #56
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• Individual tax returns: TurboTax Deluxe on Mac (amazon download). Handles a sole proprietorship just fine. I've been using this program since before Intuit acquired it (was called MacInTax in the old days). I e-file the federal and mail in three states. I have to wait for K-1s to arrive so I'm never able to file early.

• Partnership tax returns: H&R Block Business on Windows (amazon download). There are hints that a version of this software is also used internally by H&R Block tax prep folks (in the help documentation, it sometimes says "discuss with the client ...") The UI is quirky but after many years I've learned the tricks needed to get the job done. I e-file the federal and mail in three states.
BTW, when I bought H&R Block Business from newegg on sale last month (under $40) it was sold as "Premium & Business" & installed as two different applications (Windows) so it's like getting Premium for free...will definitely be doing the same next year.
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Old 02-27-2021, 03:38 PM   #57
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I've always used TaxAct. I never compared it to anything else, it's just the first one I picked and it does everything I need it to. It carries over information from year to year, which saves a lot of time. Sound like TurboTax is everyone's favorite here, but I'm too lazy to look into switching.
Update: Since posting the above, I took a look at TaxHawk. It very easily imported the PDF of my 2019 TaxAct tax return, and I very quickly went through all of the Q&A to do this year's taxes. It seems a bit easier to use than TaxAct - a cleaner interface, and a whole lot cheaper. I haven't submitted my taxes yet, but might be switching to TaxHawk now.
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Old 02-27-2021, 04:42 PM   #58
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My question is, what are the reasons to use a software package?
mountainsoft and runningbum have named a few reasons that mostly apply to me but beyond those things, the software keeps up with tax law. For example, I know my situation and I do a couple other returns for my DD and a old family friend. Well the son of the old family friend now has sons working. Simple returns, done them a couple years and I just did them by hand because I didn’t want to use my free TT filings for such a simple return. Then, year before last, the law changed, and sons got to deduct the standard exemption even if they were claimed on parents return. I missed that. IRS didn’t and sent them a refund. Needless to say, I was a bit embarrassed. Had I entered them into TT, I would have seen that, questioned it and filed it correctly. So, don’t think just because you only do your return and because you know yourself, that you’re up on every tax change. Of course you certainly could be, but I don’t keep up on it that well especially if it’s an uncommon item that gets changed.
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Old 02-27-2021, 04:50 PM   #59
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Update: Since posting the above, I took a look at TaxHawk. It very easily imported the PDF of my 2019 TaxAct tax return, and I very quickly went through all of the Q&A to do this year's taxes. It seems a bit easier to use than TaxAct - a cleaner interface, and a whole lot cheaper. I haven't submitted my taxes yet, but might be switching to TaxHawk now.
Use promo code TAXHAWK10 for 10% off, sometimes you can use TAXHAWK25 for 25% off. I have been using taxhawk for years and really like it.
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Old 02-28-2021, 07:03 AM   #60
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“Favorite tax SW” is sort of like “favorite hammer to smash my thumb with”. I don’t complain about taxes, but I also don’t look forward to preparing my taxes and the words “favorite” and “tax” just don’t seem to fit together.

Could be just me.
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