Which Tax Software do you recommend for age 67 Retiree?

[Healthy Lifestyle]

I have used a tax professional to do my basic tax filing for the last 7-8 years when I was employed - now in retirement.

I rolled over my 401K to a traditional IRA last year and have more taxes and documents that will need to be filed. I do have a brokerage taxable acct, stocks, old mutual funds,bonds, treasuries,MMF. Also have a traditional and Roth IRA.

Now I am unsure if I should continue with tax professional or go to with either TT or HR Block?

Note: I have used TT in the past before I started with the present tax professional, but this year will be a little more than a basic return.

 

[Midpack]

I’ve used TurboTax for years and find it very user friendly. But I’ve heard similar praise for HR Block. Don’t think you can go wrong with either. And it’s my understanding HR Block can read last years data from TurboTax so you could switch. Best I can tell TurboTax can import last years info in pdf for from HR Block, not sure about data.

Probably not with the OP, but for others you may have to wait to file for some situations with either tax software package. It can be frustrating to wait, sometimes it’s TT or HRB at fault, but often they’re waiting on the IRS to finalize.

Lots of online comparisons, here’s one https://www.nerdwallet.com/article/taxes/hr-block-vs-turbotax

 

[Qs Laptop]

Now I am unsure if I should continue with tax professional or go to with either TT or HR Block?

Note: I have used TT in the past before I started with the present tax professional, but this year will be a little more than a basic return.

Since you are saying you have a basic return ypu do not need to continue going to a tax professional to get your taxes done.

I used H&R Block for years and was happy with it. I switched to TurboTax a couple years ago because it can easily import the 1099's from your taxable accounts at your brokerage. This saves on a lot of typing in data by hand.

However, as I understand it, H&R Block now has this ability as well. I'm reconsidering H&R Block but a bug in their taxable IRA withdrawals was discovered by Trooper which is giving me pause.

https://www.early-retirement.org/fo...rited-ira-distributions-correctly-120672.html

 

[Aerides]

We don't use software, but we use TaxAct for online filing and find it works well.

 

[SecondCor521]

If you feel comfortable and confident that you're doing everything right, TT and H&R Block are both probably fine. Those two are the market leaders in the space last I checked, which was a few years ago. They always have early errors, and they generally fix all the main ones in a relatively timely fashion. I'm sure they'll fix the IRA 4/7 code issue mentioned above. I wouldn't file with either until late February or early March for that reason.

TaxAct is fine too. I would stay away from Credit Karma's offering; I think it's particularly low quality although it might be OK for very simple returns (simpler than yours).

A professional tax preparer is probably overkill, but if you have extra money and want the extra valet service, sure, that's fine too.

A third choice is to find a local AARP Foundation Tax Aide site and have them do your return. They can do it for free, they can e-file federal and state, and you don't need to be an AARP member to be served. There are some very broad limits on what kinds of returns they can prepare, but yours sounds like it would be within those limits.

https://www.aarp.org/money/taxes/aarp_taxaide/

Tax Aide sites usually open around the first of February, so if you're interested in this option I would get all your documents together, along with your ID and your SSN, and check the above link late next week.

 

[MichaelB]

Now I am unsure if I should continue with tax professional or go to with either TT or HR Block?

Note: I have used TT in the past before I started with the present tax professional, but this year will be a little more than a basic return.

You can always use the pro to file, also try a free online tax prep SW without filing, and buy a copy of TT (also without filing), all just to compare the 3 options to see how it goes and how comfortable you are with each option. If you find the tax SW is something you’re comfortable with, next year just go with that.

 

[pb4uski]

I have used a tax professional to do my basic tax filing for the last 7-8 years when I was employed - now in retirement.

I rolled over my 401K to a traditional IRA last year and have more taxes and documents that will need to be filed. I do have a brokerage taxable acct, stocks, old mutual funds,bonds, treasuries,MMF. Also have a traditional and Roth IRA.

Now I am unsure if I should continue with tax professional or go to with either TT or HR Block?
Note: I have used TT in the past before I started with the present tax professional, but this year will be a little more than a basic return.

I don't understand why this year will be more than a basic return. The rollover of your 401k to a traditional IRA is not a taxable event. Other than reporting the 1099-R resulting from the rollover and making sure it is a rollover there isn't anythng different this year vs last year.

What you could do is to buy Turbotax and do your return and if you are comfortable with the result then file it. If you are not comfortable, have your tax person do the return this year while you do it in parallel in TT... then next year start doing it yourself.

Where do I enter an IRA rollover?

You should get a Form 1099-R from your IRA custodian which reports the rollover. To enter the information, follow these steps:

1. Search for 1099-R and select the Jump to link in the search results.
2. Continue through the screens to import or enter your 1099-R form.
3. When asked Tell us if you moved the money through a rollover or conversion select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days) and select Continue.
4. On the next screen, Did you roll over all of this (Box 1) to another retirement account? answer Yes, I rolled over to an IRA or other retirement account (or returned it to the same account) and select Continue.

If taxes were withheld in box 4 of your form, they'll either be added to your refund or applied to your tax liability.

 

[marko]

They always have early errors, and they generally fix all the main ones in a relatively timely fashion. I'm sure they'll fix the IRA 4/7 code issue mentioned above. I wouldn't file with either until late February or early March for that reason..

If you've already inputted information, but not yet filed, do the errors get corrected/recalculated automatically? Or should one wait and enter information when all known bugs are fixed?

 

[SecondCor521]

If you've already inputted information, but not yet filed, do the errors get corrected/recalculated automatically? Or should one wait and enter information when all known bugs are fixed?

If they're doing their job right and you've entered your data accurately, you could enter your data now and wait for the fixes later and *probably* be OK.

The one exception that comes to mind is if you're using some sort of import function to pull in, say a consolidated 1099 or a W-2. If there is an issue with their import software, I suppose it's possible that could affect the import of your data. If that happened, you'd probably have to choose between deleting the bad import and starting over, or manually correcting the data that was imported.

The other possible error would be if their interview code is broken; it's possible you answer a question correctly but their code leads you down a wrong path and you never end up putting in the data because of it. In this case the main way to fix would be to go through the interview process again and hope they steer you the right way.

In theory, the commercial tax software programs could keep track of bugs and bug fixes and let you know when they apply to your return. But in practice, this is actually more complicated and more work and itself susceptible to error, so I think they don't try to do so. They probably just publish release notes and tell you to update your software before filing.

...

I file my and my entire family's returns through AARP Foundation Tax Aide where I volunteer. They use TaxSlayer, which has bugs too, but I get to see the bug lists and can generally tell which apply and which don't. I also get to see when they're fixed, and I can look at the return itself and usually can tell if there is a problem. For regular customers, Tax Aide also always does a second full quality review by a second tax preparer. The quality review sometimes catch errors, so the overall program accuracy rate is very very high.

If you're doing your own return, you can sort of replicate a quality review by doing your return one day, then coming back a week later with fresh eyes and looking it over again before filing. Even if you hire a professional tax preparer, I would recommend reviewing their work. They're usually competent, but some aren't, and the competent ones are busy enough to where they can make errors just due to sheer volume and the time pressure that comes with the desire to be profitable.

 

[GenXguy]

I'm not 67, but I use OLT online and file fed and state electronically.

 

[jim584672]

I used to use TurboTax but now use H&R Block Deluxe + State which is usually on sale for around $20 on and off.

 

[Midpack]

If you've already inputted information, but not yet filed, do the errors get corrected/recalculated automatically? Or should one wait and enter information when all known bugs are fixed?

IME with TT at least, the interview sections will note not yet ready if they aren't.

And if you look at the forms view, any section that is not ready to file will have a red exclamation point next to it and DO NOT FILE in red on the form itself. IME those all automatically recalculate correctly, you just have to wait until any red exclamations in your forms is gone to file. IIRC, if you try to file with a form that's not ready, TT will stop you. So there's almost no chance you could unknowingly file with errors due to forms, all clearly marked in forms view and on forms themselves.

 

[Sunset]

If you've already inputted information, but not yet filed, do the errors get corrected/recalculated automatically? Or should one wait and enter information when all known bugs are fixed?

I enter my information over time, and when I do an update, I click on the recalculate menu item before submitting.

They all should be designed to take what you entered and do the calculations from that, so previous entries should be good to go.

I tend not to file first thing, as lots of forms are not finalized, and I don't get all my forms and updated forms until later anyways.

 

[Healthy Lifestyle]

Thanks all for the thoughtful comments and think MichaelB and pb offered great advice: "try a free online tax prep SW without filing, and buy a copy of TT (also without filing)" to try it out.

pb4uski thank you for taking the time to give the filing steps regarding my 401K rollover when preparing my tax return.

 

[jazz4cash]

I don't understand why this year will be more than a basic return. The rollover of your 401k to a traditional IRA is not a taxable event. Other than reporting the 1099-R resulting from the rollover and making sure it is a rollover there isn't anythng different this year vs last year.

This is what I wanted to say but I was too lazy to type it up. Also, I think you can ‘test drive’ the online version of TT for free.

 

[badatmath]

IME with TT at least, the interview sections will note not yet ready if they aren't.

And if you look at the forms view, any section that is not ready to file will have a red exclamation point next to it and DO NOT FILE in red on the form itself. IME those all automatically recalculate correctly, you just have to wait until any red exclamations in your forms is gone to file. IIRC, if you try to file with a form that's not ready, TT will stop you. So there's almost no chance you could unknowingly file with errors due to forms, all clearly marked in forms view and on forms themselves.

Good to know. I haven't seen that but I guess I file late enough and simple enough it hasn't been an issue.

 

[Jackietime]

I've been using OLT.com for our taxes for both fed and state for many years. It's just $9.95. I discovered it on the IRS web site.

 

[Jerry1]

Going to be a bit of a contrarian here and say that I think you should keep using your professional. You’re right in the middle of a significant financial change in your life. Stick with what’s worked. Then, after a few years if you see your taxes are relatively consistent and you feel like doing them, go for it.

I’m sure you could do it and fwiw, I always recommend TT, but why? Go see your professional and don’t worry about your taxes until you get on autopilot in retirement.

 

[Healthy Lifestyle]

Going to be a bit of a contrarian here and say that I think you should keep using your professional. You’re right in the middle of a significant financial change in your life. Stick with what’s worked. Then, after a few years if you see your taxes are relatively consistent and you feel like doing them, go for it.

I’m sure you could do it and fwiw, I always recommend TT, but why? Go see your professional and don’t worry about your taxes until you get on autopilot in retirement.

Jerry thanks for reading my post and your comments are well taken.

 

[frank2009]

In past years I've used TT. However I thought it was a bit pricey. This year I used free tax USA. I found free tax to be not quite as polished as TT. Also as Q's laptop wrote, the import feature for brokerage 1099's is convenient. In the future I will probably use the free tax because it's not much more difficult than TT and $80 or so less expensive.

 

[Car-Guy]

Turbo Tax.... IMO, it's "cheap at twice the price"!

 

[treeofpain]

I like Turbo Tax a little better than H&R Block, but sometimes H&R is cheaper and I use it instead.

 

[Walt34]

I just use TurboTax. I'm familiar with the interface, it works, I watch the sales for a (relatively) low price, and for a once-a-year minor expenditure I'm just not gonna get that anal about the price if not doing so greatly simplifies life. Which is the case for me.

 

[CardsFan]

^^^This.

I know it. It is "reasonable" in price. I can file electronically with no issues.

Yeah, I shop for a deal (and find one almost every year), but I would probably pay full price if I had to.

 

[target2019]

Each year you delay doing your own taxes you're postponing the opportunity to learn about the complexity of your situation.