Thursday, February 11, 2010

Tax Time Begins

By now we all should have the stuff (W-2's, interest statements, etc.) mailed to us that we need to do our taxes. Yippee! I'm a tax junkie. I'm not sure why. I usually have it filed and get my return by late Feb or early March.

Here's how I handle the tax season. I use TaxAct for my federal Return. It's free and quite accurate. Over the years, I have sized TaxAct up to other tax services like Turbo Tax and they all do a good job on federal returns. I settled on TaxAct, as a matter of personal preference. Like with all free online tax services, you have the opportunity to upgrade your account to get more help, in the end paying for your "what-began-as-a-free-return." With TaxAct, I learned that you shouldn't upgrade unless you really, really want to. Once you have upgraded, you can't change your mind and "down-grade." Instead, you have to set up a whole new account and input all your info again. I learned the hard way a few years ago.

As soon as I get the first tax form in the mail, I get on my TaxAct account and input the info and logout. I continue to do this each day I get new info and by the time I get the last tax document, I'm pretty much done. I print off the return and go over it on my own to check for errors.

I don't use TaxAct for filing my state return. Why? For one, because it costs. For another, I have found that online commercial tax preparation services don't always have very accurate state returns. For state returns I found that I am better off going straight through the state. Most states have efile options on their web page that are free to use. I've had the best luck with this in all three states that I have done taxes in, as opposed to using commercial filing services.

FYI: TaxAct's free version (free, no matter your adjusted gross income) can handle a variety of tax forms/situations. For example, handling moving expenses, independent contract work, tuition deductions... etc. Happy filing.

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