Let me first say that this is not a review of the tax-preparation programs out there. A good review would take at least three different tax returns with entirely different taxissues and work each of them through the different tax-preparation programs. I didn't do that. Quite frankly, I don't have that kind of time. I still have to get my returndone! And let's face it, if you stick with a big name, such as TaxCut, TurboTax, CompleteTax or TaxAct,you really can't go wrong. They all have a thorough interview process that asks you a bunch of questions and then justplops the numbers on the tax forms, unbeknownst to you. They all offer assistance along the waywith Q&As and online research. And they all enable you to electronically file your completed return. And many of you will just stick with the program you used last year, because all yourinformation will be carried forward, and that's fine. The end result is the same. But if you're looking for a new one this year or you're one of the 17 million people stillusing pen and paper (please stop!), read on to find out which program will satisfy your particularneeds. Because as similar as these products are, they each make an attempt to differentiatethemselves. So here are some of the things that make them stand out from their competitors.
If you happen to track your trades with GainsKeeper, you can import all your trading activityright into CompleteTax, and the tax program will then get that information onto the proper tax forms. Ifyou do a lot of trading, this could be a great combo for you. If you don't use GainsKeeper, then TurboTax may be a good option if you do a lot of trading.TurboTax allows you to import your Form 1099 data right from your broker onto your tax return.Remember, Form 1099 reports your trading activity, and TurboTax has relationships with more than 100financial institutions. Merrill Lynch, Morgan Stanley and Dreyfus were added this year,says spokeswoman Julie Miller. So if you have an account with any of the 100 financial institutions listed, then you'llbe able to import that information right into TurboTax. That will save you a ton of time, because you'dotherwise have to input every trade.
So you answer a few questions online, then you can either email, fax or drop off your documentsat a local office. The pro will prepare your return, sign it and e-file it for you. The coststarts at $80, but the price may go up depending on the complexity of your return. Another big note: If you have to file multiple states, www.hrblock.com will let you e-file themall. The competitors only allow one state e-file.
Get all your documentation together so that you have everything in front of you when theprogram's interview starts asking you questions. In most instances, you'll have to pay before you can e-file so have your credit card ready.Also, if you're getting a refund and want it directly deposited into your checking account, havethat number and the usual related ones handy too. Pay attention to hidden fees. That means do not request a "refund anticipation loan" so thatyou can receive your refund early! These loans charge ridiculous interest rates that can run on anannualized basis well into triple figures. If you e-file, you'll get your refund in two weeksanyway, so there is no need to pay ridiculous interest rates just to have it a few days earlier. And don't have payments taken out of your refund. Just use your credit card to pay, otherwiseyou'll be hit with a processing fee. As an example, TurboTax charges $19.95 to have payments takenout of your refund. Just because you clicked "send" and e-filed doesn't mean you're done. Be sure to check backin a day or two to make sure the IRS accepted your return. You'll then be assigned a unique14-digit Declaration Control Number, or DCN, that serves as proof that your return has been acceptedas electronically filed. So keep that number in your records. Don't forget, if you owe money to Uncle Sam, you still have to pay him, even if you e-file. Foryour federal return, you can either use a credit card or have your bank account debited. Somestates will let you do the same. To pay your federal taxes by mail, send Form 1040V along with your check. To pay your statetaxes by mail, send a check with the corresponding form for your state. So just because I didn't officially review these products doesn't mean you can't. If you havea favorite tax-prep program, let me know.