tax time: the agony and the ecstasy.

9 03 2011

once upon a time, online tax software was not readily available, nor was being online. in my tiny cockroach infested first apartment, i could barely afford to eat- let alone pay for a dial up internet connection (which back in ’99 was all a single girl could dream to afford).

well, when my mom pushed me out of the nest after college, doing my own taxes was part of the deal. but not having preparation software, or even the luxury of being able to google how to do taxes, i was essentially BONED. i had to go to the LIBRARY and pick up paper forms and instruction booklets.

i distinctly remember having a panic attack over my futon full of forms and manuals. gross adjusted what? but i pushed through, did what i thought was probably right (cried on the phone to my mom for an hour or so), and got myself a refund of $500. well, actually $250 after the IRS corrected my copious errors. but it did it! by myself!

after the trauma of paper taxes, the next year i found myself a friend with internet access and vowed to e-file, no matter what the cost. as it turned out, being single renter who had yet to start paying off her student loans (now a distant utopian memory), and was making roughly $20,000 a year (less utopian), was actually an ideal situation. i could file the 1040EZ, and that meant that there were numerous free filing options for broke jerks like me (and there still are).

i chose turbotax, and it was best arbitrary decision i ever made.

now, i can’t really speak to the ease & efficiency of other online tax programs (i get the impression that they’re all pretty similar), but the boyfriend constantly tries to cheap out on his filing fees by trying this turbo-clone and that (my personal fav being this year’s contender- TAX SLAYER), and almost always ends up getting screwed.

the difference, FEES! sure, i paid turbotax $64 (far far from free). but with the clones, if you want to e-file…FEE. if you want to direct deposit…FEE. turbotax might seem pricier, but there are absolutely no hidden fees, and you get the full boat of services. i e-filed, direct deposited (state and fed), itemized, had my info imported from last year, and got my refund in 2 weeks. to me, that seems like $64 well spent.

could i have scraped a few cents off my total tax prep investment by using johnny cutcorners online? possibly, but  not without sacrificing the consistency, ease, and reliability of my beloved turbotax. could i have saved even more by filing on my own on paper? definitely. but i would be covered in papercuts and tears and still be waiting for my  refund.

to me, being frugal isn’t just about the lowest price, it’s about spending wisely. when it comes to tax prep, i 100% think it’s worth sticking with a service that i trust and that doesn’t make me vomit with financial anxiety (gotta steer clear of the tax man!), even if it costs a few dollars more.

that said, if you don’t have a few dollars, there are still lots of resources (both online and off) to help you figure out your tax shit with limited trauma.

am i totally nuts? are all tax prep services the same? what do you do?

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11 responses

9 03 2011
Bobbi

As someone who does taxes for a living, I would never, ever, do it on paper or suggest anyone else does it on paper unless they have the easiest return possible. There are too many things that the average person doesn’t know about, such as this years Making Work Pay Credit. I always use the software at our office to do my taxes, which costs a lot more than Turbotax, but my dad (my boss) pays for that.

21 03 2011
bessmarvin

that’s good to know! (also good to know that i can hit you up with tax questions if i need too *wink*). would you ever be interested in guest posting about deductions that people should know about? or even just tips for tax time? (no pressure, but i’d love to have you!)

9 03 2011
Ev

Alexandra, I’m totally with you here. I have used TurboTax for the last three years and I trust it totally. Absolutely worth it. And I most recently saw its excellence demonstrated when I had to help my 84-year-old mother with her taxes this year. She chose one of those freebies and then got stuck. I have no idea if the software was accurate – it probably was – but it definitely was NOT user-friendly. So that, in part, what we’re paying for with TurboTax – excellently designed software. (That said, it’s pretty neat that my mom is eager to take on the virtual world at her age.)

21 03 2011
bessmarvin

the user friendliness is definitely key. especially for tax-tards like me. i can’t even imagine how many errors there were on returns in the days before online services. i had a 1040EZ and i still f-ed it up hardcore!

9 03 2011
Erica @ Just Call Me Cheap

We use H&R Block’s software for our taxes. This year we ended up getting it for one cent from some deal on Slickdeals but usually we pay whatever the going rate is.
I remember when my husband and I moved from Massachusetts to Georgia (it was the first time either of us had lived anywhere other than with our parents) we had our taxes done at an H&R Block office and when they told us our total we almost shit our pants- it ended up being hundreds of dollars! We were only twenty years old and that amount of money was massive to us, especially since we figured it wouldn’t cost that much (that’s what happens when mommy and daddy footed the bill in previous years).

21 03 2011
bessmarvin

ooh. $.01 tax prep? that is slick! when i got divorced, we went to h&r block to figure out how to split up our taxes. it was SO EXPENSIVE. maybe someday i’ll have a more complicated money situation that demands human tax prep, but for now… me and turbotax will stay besties.

9 03 2011
jjdactyl

we both use h&r block’s online program, and it’s completely worth it. the fee is right around $60, and they make it really easy to check as many refunds and credits as possible. tax time is my favorite time of year, because for me, it’s guaranteed cash in my pocket. being an unemployed student sucks, but every once in a while, there’s a perk.

21 03 2011
bessmarvin

i had a bad experience with h&r block’s “real people” service, but they did get my taxes right- they just charged me up the ass to do it. for many years, i had to pay the gov, but now that i have mortgage interest and small business income… bring on the refunds! it’s a time of great joy.

9 03 2011
Keeping the wind in a windfall | Coupon Evolution Blog

[…] It’s tax season (eek!). And although for some that means the terror of a behemoth tax bill (a topic for another day), that also means refund excitement for many others. Unfortunately, for everyone that gets to grab a chunk of change back from the government, there are at least 58 retailers lining up behind them to grab it right back. Now, I’m a firm believer that in order for the economy to recover, we do have to loosen the strings on our scrooge purses and allow ourselves to shop (at least a little).  But, instead of taking that tax bump straight to Big Box USA and blowing it all in one shot, maybe it’s worthwhile to pause for second and think about some alternatives: SAVE! Suze Orman (yes I know she’s kind of scary, but she gives great advice) is currently advising that people save up 8 months worth of living expenses. This may seem sort of extreme, but in these economically uncertain times, it’s kind of a smart strategy. I know several totally employable people who have been jobless for well over a year.  A job search can take months these days, and not having an adequate savings cushion can put you at risk for losing your home or vehicle, or accumulating significant debt. If you’re getting a refund this year, consider putting at least half of it into your savings account. Or if you don’t have a savings account, now is the absolute right time to start one! SPEND! Like I said before, part of economic recovery involves shopping (tragic!). I also believe that in order not to feel totally deprived and crazy, we do need to give ourselves a little retail love every now and again. Tax refunds are a great time for this kind of spending, but PROCEED WITH CAUTION! Definitely stop by the bank and make your savings deposit BEFORE you head to the mall (it’s amazing how fast refunds can burn when you’re not paying attention). Also, shop with a list. Sit down and think about what you really want/need. It may not be as much fun as running around town buying whatever you want, but you’re much more likely to be satisfied with your final purchase (and your savings account). STRETCH! I play this game every time someone gives me a gift card where I try to see how much stuff I can get for my money, and I encourage you to do the same with your refund. This means shopping sales,using coupons, and scrounging around for every discount you can grab (hell, I’ve even occasionally tried to talk down the price).  Just because you can presently afford to spend $80 on a professional massage, doesn’t mean that you shouldn’t bother looking for deals. Why not go online, get a couple of 50% off gift certificates, and get yourself 2 massages for the price of one! STAY LOCAL! Everyone gets bummed out when they see local small businesses hang up the “EVERYTHING MUST GO” sign of shame, but we are the ones responsible! If we want to preserve our local haunts, we’ve got to show our love with our wallets. If you decide to spend your tax refund this year, do yourself and your community a favor and get yourself something fabulously local (I’m personally coveting some Kate Spade stationery from Papier Gourmet, and no, I won’t be forgetting the 15% off coupon). Posted in Uncategorized | Tagged 15% off, 2011, 50% off, 8 months expenses, big box store, Big Box USA, bump, coupons, deal certificates, deals, debt, discounts, economy, everything must go, foreclosure, income tax, make a list, need, Papier Gourmet, planning, Portland, proceed with caution, refund, repo man, savings account, scrooge purse, shop local, shopping, Suze Orman, tax season, taxes, unemployment, want, windfall | Leave a comment […]

17 03 2011
Bingo Beads Julie

I’ve used TaxAct for the past 4 years and really like it. Your Federal return filing is free, and I paid $16.95 or $17.95 to file State. This year, I even compared with H&R Block’s online dealio to make sure I was getting the maximum return and I was golden. I dig it.

21 03 2011
bessmarvin

ooh, that’s actually a really good deal. and i’ve definitely heard good things about taxact. the truth is that i stay with turbotax because they have all my info already. a few bucks isn’t worth the pain to switch all my shit over, but i will definitely let the boyfriend know. i’m pretty sure he won’t be back for tax slayer.

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