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Tax preparation software

Discussion in 'TUG Lounge' started by theo, Feb 11, 2019.

  1. theo

    theo TUG Review Crew: Veteran TUG Member

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    Historically, I have paid a CPA for state and federal tax return preparation. My long time accountant will be retiring soon. As an experiment, I recently purchased Turbo Tax in order to prepare a "dummy" return of my own, just to compare my self-preparation results to what will likely be the last CPA-prepared return (at least with this particular accountant).

    To say that I am "underwhelmed and unimpressed" by Turbo Tax would be a polite understatement. Data entry was easy enough, but I question how thorough the product really is. The software has already declared to me that "you're done and ready to file" --- but I am very dubious.

    For specific examples on my skepticism, the software asks about IRA contributions during the year (none, in my case). However, nowhere does the software seem to ask about (taxable) IRA distributions, as near as I can tell, whether MRD or non-mandatory. I'm over 59 1/2, so could take IRA distributions (but haven't yet ever done so). I'm not yet 70 1/2, so am some years away yet from any minimum required IRA distributions. However, the software does not seem to ask anything at all about distributions withdrawn, mandatory or otherwise. Really? How can it not at least ask? I also see no inquiry or any entry option for reporting allowed carry over capital losses from prior years. Really? How can it not at least ask? I'm no tax guru so frankly don't even know what else it fails to ask about before prematurely and incorrectly declaring a return "done and ready to be filed". :ponder:

    I am not looking to start a tax discussion or request any tax advice --- not at all. I am instead asking strictly about your first hand, direct experiences, informed input or personal opinion about this (or any other) commercially available tax preparation software. My own initial reaction after sticking my toes in those waters is that I sure hope that there are better products out there than the truly unimpressive Turbo Tax product that I've just been toying around with. :eek:
     
    Last edited: Feb 11, 2019
  2. needvaca

    needvaca TUG Member

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    I love turbotax. I've been using it for years. It definitely takes some work the first year to get all your information in, but then it rolls forward easily after that.
    Make sure you get the Premium version if you have anything at all complicated. Mine is pretty complicated, but I feel like it handles it all.
    And no, for $70, it's not going to know to ask you every individual question about your unique situation, so if you have a form that you know needs to be filled out or information you know needs to be entered, then keep clicking through the income items until you find the area you need.

    That being said, if you or anyone isn't 100% comfortable that it is including everything or calculating correctly, then you absolutely should stick to a CPA. But the really good CPAs (who know everything they could/should be asking) are not cheap
     
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  3. VacationForever

    VacationForever Tug Review Crew: Rookie TUG Member

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    Did you get the 1040 Easy version as opppsed to the full version? We used Turbo Tax for the first time last year and we used to always have a CPA do taxes for us, and thought it was very thorough. We also paid for CPA consultation, as needed, with the online Turbo Tax software. We did schedule a consultation with their CPA to ensure that we not miss any carry over from our previous year tax return as well as whether we needed to prepay estimated taxes for 2018.
     
    Last edited: Feb 11, 2019
  4. bogey21

    bogey21 TUG Member

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    I have used Turbo Tax successfully for over 20 years with all kinds of dicey stuff (too many to enumerate here) on my Returns with great success...

    In answer to your specific issue I think Turbo Tax relies on you getting a 1099R from the entity who has paid you your distribution. If it hasn't asked you for one, the easiest way to get to the right place is click on the "Help" button and insert "1099R". Then click on one of the answers which is something like "Take me to 1099R" and you will be there. Another way is be to click on "Financial" then "Income" and answer all the questions from beginning to end. All in all I have been very satisfied with Turbo Tax for the 20+ years I have used it...

    George
     
    Last edited: Feb 11, 2019
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  5. davidvel

    davidvel TUG Member

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    What version do you have? It seems you need the Premier version for assistance on IRA/Retirement:
    TurboTax Version Comparison

    We stopped using TurboTax a while ago and switched to H&R block software, as TT versions were all so confusing.
     
  6. theo

    theo TUG Review Crew: Veteran TUG Member

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    No. I bought Turbo Tax "Deluxe" (at Costco). Did not buy the "Basic" version and did not need the "Premier" or Home and Business versions since we don't have rental property or any complex investments and were not / are not self-employed.

    It seems to me that the specific shortcomings I have pointed out would be basic and fundamental for any filer and therefore should be be an integral and necessary data inquiry item within any "level" of the product, no? :shrug:
     
    Last edited: Feb 11, 2019
  7. theo

    theo TUG Review Crew: Veteran TUG Member

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    Thanks for the input. Having always used a CPA, I know they are not cheap and I'm glad to pay one I know and trust.

    In specific regard to tax preparation software, I guess I feel that I (and / or other users) should not have to "divine" what forms need to be filled out, when some issues (IRA's being a good example) are potentially applicable to virtually anyone using the product. It shouldn't require a "scavenger hunt" to find and enter info on simple and universally applicable items --- at least in my personal opinion. :shrug:
     
    Last edited: Feb 13, 2019
  8. rapmarks

    rapmarks TUG Review Crew: Elite TUG Member

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    I always get asked by turbo tax about my rmd or 1099R. I do have the premiere version, as I do five returns.
     
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  9. davidvel

    davidvel TUG Member

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    I'm not defending TT (see prior post), but they do have a comparison chart (I linked) that says you should get Premier for retirement issues. This is how they do it, just like the airlines (I think you bought a reserved seat, but need premier class...)
     
  10. Bernie8245

    Bernie8245 TUG Review Crew: Veteran TUG Member

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    I do too.
     
  11. geekette

    geekette Guest

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    Cruise back through the interview, it asks you about everything you indicate applies to your situation. I have used TT for over 20 years and have never had to guess what I need. That's why I use it. Check your data, if your birthdates are not correct, there is no way to guess RMDs would apply.

    A while ago they started doing the different versions, pain in the butt, imo, but don't forget that there are a lot of people out there that only file EZ and if you have that version, that's all you can file. You may be able to upgrade in-program if you need to.
     
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  12. b2bailey

    b2bailey TUG Member

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    I would think this question alone would be reason to need CPA consultation:

    I also see no inquiry or any entry option for reporting allowed carry over capital losses from prior years. Really? How can it not at least ask?
     
  13. rapmarks

    rapmarks TUG Review Crew: Elite TUG Member

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    It probably asked in the beginning of the process, where you mark situations that apply.
     
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  14. mpumilia

    mpumilia TUG Review Crew: Veteran TUG Member

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    I did not take well to Turbo Tax. I wish I did because the mutual fund company I use gives us free usage of the basic and discounts on other versions and all my accounts automatically download right into it.

    I use the on line version of Tax Act- for years now. It is fairly simple- especially more so this year with the new simplification of the tax code. You can "play" with it on line and you don't have to file or pay anything if you don't like it. Some forms do automatically download- like W-2 forms from ADP, etc. The rest you have to do manually. You can do the quick entry right onto the forms or follow along with questions and it will put the numbers on the forms for you.

    It carries over my capital losses from previous years and so forth, as well as basic info from previous returns so I don't have to put it all in again each year.

    I do our Federal return for free and just pay for the state return.

    PS Yes- be careful with those RMD distributions. With my inherited IRA, for years Tax Act messed up and I was paying NYS taxes on the distributions because it had a defect in the program! Not to get into all the dirty details, but I realized it when I turned 60 and all of a sudden owed less NYS taxes than I had previously. Well- this time it recognized my age and now assumed because of it I did not owe, because that would be the case in some states- my turning 60.

    It was right I did not owe- but not because of my age in NYS. Upon researching it further- in NYS, the tax is based on my deceased mom's age- not mine- and because SHE was over 60 when she passed- I should have NEVER paid taxes on the RMD's! So- I quickly brought my past returns to an accountant- one was already past the limit for filing an amended return- so I lost money on that one. But I was able to recoup quite a bit of money, even after paying the accountant.

    I have done an amended return once on Tax Act and it was fairly simple, but I could not do all these on Tax Act because of the glitch in their program! So I had to pay the accountant to do it on her program.

    Theo- it all takes a bit of getting used to. Over time- years- you get used to using it more and more and it becomes easier to navigate and search out what you need.
     
    Last edited: Feb 11, 2019
  15. rapmarks

    rapmarks TUG Review Crew: Elite TUG Member

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    I know turbo tax asks if the Ira is inherited, also annuities. I download all my brokerage statements into turbo tax.
     
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  16. artringwald

    artringwald TUG Member

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    My retirement accounts are in Vanguard and Fidelity. TT will download all the necessary data from them and put it into the correct form. I do that first and then go through the questions. It always has put the information in the right place. I haven't tried any other tax software because TT can also pull in info from Quicken. The only year I didn't use TT was after I inherited a trust from my parents. The account charged so much, I decided to dissolve the trust so I could keep using TT.
     
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  17. bogey21

    bogey21 TUG Member

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    I find it better to use the on-line version as opposed to the version you buy at Best Buy, etc. The main reason is that you have to update the store bought version whereas the on-line version is always current...

    George
     
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  18. controller1

    controller1 TUG Member

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    CPA here. I've used TurboTax for over 25 years for my personal tax return. I've always used Premier or Home & Business versions. I have a couple of IRAs, taxable stock accounts, retirement income and non-retirement income. TurboTax picks them all up through their questions. I've only once had an issue that TurboTax could not handle without my manual intervention.
     
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  19. Talent312

    Talent312 Tug Review Crew: Rookie TUG Member

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    IME, the questions are all there, but sometimes in fine print, below the box.
    That makes it quite easy to miss or skip over questions about some items.
    I've said, "Wait. I had a 1099 for that," and manually returned to enter it.

    But even if not obvious, these topics are covered --
    1099-R Instructions:
    "Just enter the information as it appears on your 1099-R form. We’ll use it and your answers to a series of questions to determine the taxable amount of your distribution. We can help you enter your 1099-R or search for a 1099-R and select the 'Jump To' link from the drop-down list."

    Capital Loss Carryover Instructions:
    If you transferred last year's TurboTax return over, you don't have to do a thing – we've already entered it for you. Otherwise, just open your TurboTax return, search for capital loss carryover, and then select the Jump To link in the search results. We'll take you to the screen where you can enter that info from your prior year return.
    .
     
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  20. Shankilicious

    Shankilicious Guest

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    This year, the itemized deduction vs. the new standard was within $800 of each other. I feel like itemized is going to go away or lose its benefits. FYI, I'm only 31 and have a standard two income home with one kid and a couple 401ks
     
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  21. joestein

    joestein TUG Member

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    I have used TT for many years. I think it works well, however, I think you should understand how your taxes work before using the software. You want to be able to ensure the results make sense. If you are the clueless type who inputs their information and hopes for the best, you are probably better going to a paid preparer.

    Case in point.... I am an HCI and get back a portion of my 401K contributions. Even thought I get a 1099-R, TT adds the returned contribution to my salary and wages. I know this because after I did my taxes for the first time, I was wondering what happened to the 401K income, and looked through the return in detail until I found it. Some years, I have gotten a letter from the IRS stating that I have not reported the 1099-R on my taxes. I have been able to show them it is on the salary and wages line.
     
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  22. mpumilia

    mpumilia TUG Review Crew: Veteran TUG Member

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    Yes- Tax Act also asks if the iRA is inherited. But in my case it failed to consider the age of the deceased and the applicable NYS tax law regarding the RMD's.

    And- Tax Act only has the capability to download forms from certain companies and unfortunately T Rowe Price is not one of them. Probably because they have an agreement with Turbo Tax.
     
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  23. "Roger"

    "Roger" Tug Review Crew: Rookie TUG Member

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    As others have said, if you took a MDR, you would have gotten a 1099R form that you should have entered. Turbo Tax asks if you have any such forms.
     
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  24. Talent312

    Talent312 Tug Review Crew: Rookie TUG Member

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    Amen.
    It's important to educate yourself, either thru IRS Publications or irs.gov.
    Otherwise, you're just stumbling in the dark and likely to screw up.
     
  25. isisdave

    isisdave TUG Member

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    I've used TT forever. It carries everything I need forward and provides a 2-year and 5-year tax history if you used it last year and identified your last year return when you start.

    Like any non-trivial tax situation, the first year will be harder, and you'll need to compare to last year's return to be sure you got everything.

    I'm pretty sure that if you used the Interview mode, it asked you if you got any 1099's. I always use Forms mode (hit Ctrl-2) as it's much faster for me.
     
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