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?