Wednesday, February 4, 2015

How much you’ll pay if you do your own taxes

Jonnelle Marte for the Washington Post writes: When it comes to tax returns, most taxpayers prefer to drop the paperwork off at someone else’s desk and wait to hear how big of a refund they’ll be receiving — or how big of a check they’ll have to write.
For those in the minority who prefer to do their own taxes, the decision typically comes down to price and ease of use. Some software companies will connect taxpayers with experts on the phone or online when they get stuck. Tax companies may also offer audit assistance, which can be reassurance for people worried about messing up. Once people find a system that works, they’re likely to stick with it until they have a reason to look elsewhere. “It’s always easier to ride the same horse than to get on a new one,” says Roberton Williams, an economist with the nonpartisan Tax Policy Center.
That’s partly why so many TurboTax customers were up in arms this tax season when the company tried to change the TurboTax Deluxe desktop software they’ve previously used to prepare their tax returns, requiring customers to upgrade to a more expensive program — paying up to $30 more — if they wanted to prepare and file investment-related forms.
After many customers complained in online forums and threatened to switch to a competitor, TurboTax backed down, making it so that customers could upgrade for free this year and so that TurboTax Deluxe will include those forms again next year.
“You want your TurboTax desktop product to do what it always has done – handle the same tax situations as it did in years past,” Sasan Goodarzi, general manager for TurboTax said in a note to customers.”We’ve heard you, and we’re going to fix it.
The incident is a reminder for taxpayers to make sure the system they’ve used to file tax returns is offering them the best deal. Many people might save money by filing their returns from home using one of the free or relatively cheap options for tax preparation software available online.
But before you spend time wading helplessly through tax forms and income statements at home, it helps to know just how much you might have to spend to do-it-yourself.  Even taxpayers with more complicated returns may pay less than if they hired an accountant.
Of course, not all professional tax preparers and accountants charge steep fees. And as one reader commented last week, some taxpayers wouldn’t mind paying for the peace of mind that comes having an expert walk you through the process. SNIP, the article continues @ the Washington Post, click here to continue reading...