Tax Time Again

Tax Time!
Every year, it seems the onerous chore of doing taxes gets harder for me-based on those laws passed to keep more from my paycheck or deliver on a political campaign promise that I need to fill out 3 pages of tax forms in order to be eligible to qualify for a deduction- So here it is- the tax blog!

I’ll start by saving you some money. Maybe that is enough to get you in a patriotic mood. The software-based method I use is discussed below, but there are web-based tax programs that are available, however, I have not used them. The IRS provides volunteer training for those who wish to help others- the courses are good if you want to learn tax code, and the service is great is you are challenged by the process of doing taxes on your own. There is also the typical Tax service or accountant that can do your taxes for you, and the discussion below may help you to organize your records for their use as well.


What happened to the Rebates?
The major brick and mortar Office Superstores offer phenomenal deals during the Tax season, now starting as early as Black Friday (see my previous blog on that). Typical is the Staples offer where top-of-the-line Financial management software (Quicken or Money), computer utilities (Symantec, McAfee, or Computer associates), and shredders are offered free after rebate with the purchase of the Tax software. Some of these offers require an “upgrader” rebate to make it free, so if you have never purchased a qualifying program, your first year may cost a little extra. One of the new trends I noted in the boxed tax software this year is less of these rebates are offered. The three major tax software companies (for TurboTax, TaxCut, and TaxAct) have all but eliminated them. The only significant rebate program left is H&R Block's offer to refund the $16 you'll pay them for e-filing your TaxCut federal return. This news is bad for consumers since only TaxCut reduced the software price along with eliminating the rebate. TurboTax eliminated the rebate but kept the same price. However, both TurboTax and TaxCut now include their deduction management software (ItsDeductible and DeductionPro, respectively) as part of their deluxe packages (retail versions only; you don't get the freebie if you decide to download the software). Both companies used to charge $20 for these add-ons. Block has also upped its offer of help should the IRS want to delve into your TaxCut Deluxe + State return: An H&R Block enrolled agent will accompany you to any audit. And if you start to use TaxCut, then decide you need professional help, H&R Block will credit the purchase price of the software toward the cost of an H&R Block tax preparer. With a price of $30 and a rebate for the $16 federal e-file fee, TaxCut is easily the best value of the three.

Best Deal Versus Best Software.PC World Magazine states of the three major desktop tax prep packages, TaxCut probably offers the best value for the money. Those new to tax software should seriously consider H&R Block's offering--if only because they may want to use a professional preparer after spending some quality time with the tax code. Block's offer to credit the purchase price of TaxCut against professional preparation in one of their offices gives rookies a hedge against the unknown. Even though there are only three major products in the market, shrink-wrapped tax software still manages to offer a choice appropriate to individual tax situations. Choose wisely and you won't be disappointed. I believe TaxCut Deluxe is the best of the three for my use. I had to pay $30 for the cost of the product and $16 to e-file my state return.

Managing and Organizing your Finances. One of the best reasons to use Tax Software is it allows you to import your finances-charities, investments, deductions into the software directly. I use Microsoft Money, but I’ve used Quicken and there is substantially no difference from my perspective. I would state that the “Deluxe” versions of the programs can be free after rebate-so the added functionality comes without additional cost. I simply import my banking and investment files from the web into Money, update the items in Money to reflect their tax status, and export them into the TaxCut Software. Using the included chartiable deduction management software could also get you even more back on your taxes. Using your PDA/and or office software to keep track of business mileage and expenses gets you a two-fold benefit- you get the deduction for the expense, and the device or software being used becomes a deduction as well. These records can easily be saved as comma separated values files for import into any accounting program and provide an official record for auditing.