Monday, January 17, 2011

The Tax Man Cometh

Have you started getting your official Tax documents yet?

Over the weekend, we got our mortgage statement for taxes.  How pathetic that we spent over $14,000 just on interest?????  I know it is a tax write off, but I can think of a billion better ways to spend $14,000.  

Our taxes are pretty straight forward.  House, 2 kids.  That pretty much takes care of our deductions.  Because of our FSA, our medical expenses don't reach the 7.5% limit.  Our charitable donation are small.  A little bit on student loans, but again, not much.

I usually do our taxes myself.  I have used Turbo Tax for years and I find it easy to navigate and have never had a problem.  But now I am debating what to do about our taxes for this year.

Option 1Continue using Turbo Tax.  Cost is about $40-$50, plus electronic filing fee.  I have used it before, and it gets the job done.

Option 2:  Use one of the "free" programs that are available.  I have never really investigated any of these, so I don't know the layout or ease of use. 

Option 3:  Go to a professional.  Not sure of the cost, but if there is more to deduct than I am aware of, the extra refund may be worth the fee.

I am leaning toward Option 2 right now.  I know approximately what we have gotten back the past several years, so if the refund isn't in that ball park, I can always revert to Option 1.  But if I can save the $50, is $50!!

I am sort of curious about our state taxes this year.  We ended up owing state tax last year (BOOOOO!!!), so we adjusted our withholdings to compensate for that.  I think we will get a refund (albeit small), or possibly owe just a bit.  But either of those options are better than owing the $500 we did last year.

What do you all do?  Are you a DIYer, or do you bring a shoe box full of stuff to someone?  If you use someone, how did you find them???


  1. I thought TurboTax was free -- I've used it for years and only paid the filing fee. Are you buying the packaged software or using it online?

    (My confusion could also be that I am not dealing with mortgage interest deductions or anything like that, but I do have to use their Home Business version since I file multiple Schedule C's along with my 1040. I've still never paid more than the filing fee.)

  2. I use Turbo tax online(free federal filing) and then I go to the state of ohio website to do our state and school district filing for free. It is pretty easy to do and there is something about doing it myself that gives me satisfaction. Most people I know that have had someone else do it was spending over $100 for them to do it, and that was just to do a straightforward job, one w2, no deductions other than kids, etc. That seems ridiculous to me. I enjoy doing ours.

  3. I have bought the Deluxe packaged version in the past. When you read the description, it covers home deductions, retirement, etc. It may be "too much" software for what I actually need....hence my debate!

  4. I use TaxActOnline. I am not a fan of Turbo Tax even though I use Quicken. I find their fees a little steep.

  5. we go to a pro. the year we decided to go that route was the year my husband thought we owed $500. the pro found more deductions and we got $2000 back! Worth it to us!

  6. Since your situation probably does not change much from year to year why not go to a pro the one time and also do it on the free software, compare the results and then you know what to do going forward.

  7. I like Sandy's idea, maybe go to the pro and do a comparison this year to see how it all works out. I use Turbo Tax, but I'm thinking of doing that myself. Good luck!

  8. Why not do it your self first just don't file. Go to the tax pro and give them your papers. If they find more deductions pay them and be pleased. If not any different you will have your answer. Hubby and I did taxes for one of these companies. Not only did we make money during the tax season but we could do our taxes in the slow season for free. Saved us a lot of money. Not doing taxes this year so hubby will down load the turbo tax and do ours. we have a business and medical or more than simple tax form.

  9. I'm lucky in that my aunt is a tax person and she does my taxes...

    i still buy her a certificate we pay about $30 just as a thank you...

  10. I did what Sandy did. Then the next time my tax situation changed, I used HRBlock online. Now I do HRBlock & TurboTax online to compare, and then actually complete & pay/file w/ whichever company gets me the higher refund. I actually read the tax code b/c I'm a nerd, but still believe that doing it the old fashioned way isn't worth the time. Most pros simply use tax software similar to TurboTax unless you have a crazy situation. Most states have some sort of free file system.

    Wow, tax act is cheaper, thanks! Usually a 1099-DIV ups the price.

  11. We used turbo tax before my husband got licensed to do taxes several years ago. After he got licensed he realized that turbotax screwed us the year before, so we filed an ammendment the following year to get an extra $1500 back.

    He does our taxes now, but thats because he's a tax professional. Yeah, I'm a little biased and believe in tax pros now, but that's because of our personal experience when the online software didn't help us get everything we should have.