Thursday, January 29, 2015

The Health Care Law’s Effect on You

Nearly everyone is affected by the Affordable Care Act and will need to do something new when filing their taxes this year. The following chart will help you better understand how the health care law affects you and everyone on your return. This chart is also available on IRS.gov/aca.
To help navigate these changes, taxpayers and their tax professionals should consider filing returns electronically.Using tax preparation software is the best and simplest way to file a complete and accurate tax return as it guides individuals and tax preparers through the process and does all the math. There are a variety of electronic filing options, including free volunteer assistanceIRS Free File for taxpayers who qualifycommercial software, and professional assistance. 

IF YOU…
THEN YOU…
Are U.S. citizens or are non-U.S. citizens living in the United States
Must have qualifying health care coverage, qualify for a health coverage exemption, or make a payment when you file your tax return

Have health coverage through an employer or under a government program such as Medicare, Medicaid and coverage for veterans for the entire year

Just have to check a box on your Form 1040 series return and do not read any further
Do not have coverage for any month of the year
Should check the instructions to Form 8965 to see if you are eligible for an exemption

Are eligible for an exemption from coverage for a month
Are not responsible for making an Individual Shared Responsibility payment for that month, and must claim the exemption or report an exemption already obtained from the Marketplace by completing Form 8965Health Coverage Exemptions,and submitting it with your tax return
Do not have coverage and are not eligible for an exemption from coverage for any month of the year
Are responsible for making an individual shared responsibilitypayment when you file your return

Are responsible for making an individual shared responsibility payment
Will report it on your tax return and make the payment with your taxes
Received the benefit of more advance payments of the premium tax credit than the amount of credit for which you qualify

Will repay the amount in excess of the credit you are allowed subject to a repayment cap
Need qualifying health care coverage for 2015
Can enroll in health insurance through the Health Insurance Marketplace (Marketplace) during the open enrollment period that runs through Feb. 15, 2015; once open enrollment ends, individuals can enroll only if they qualify under special enrollment provisions  

Enroll in health insurance through the Marketplace for yourself or someone else on your tax return

Might be eligible for the premium tax credit
Did not enroll in health insurance from the Marketplace for yourself or anyone else on your tax return

Cannot claim the premium tax credit
Or another person on your tax return who is enrolled in coverage through the Marketplace is not eligible for health care coverage through your employer or under a government program

 Might be eligible for the premium tax credit
Are eligible for the premium tax credit
Can choose to get premium assistance now to lower your monthly payments or get all the benefit of the credit when you claim it  on your tax return

Choose to get premium assistance now
Will have payments sent on your behalf to your insurance provider. These payments are called advance payments of thepremium tax credit

Get the benefit of advance payments of the premium tax credit and experience a significant life change, such as a change in income or marital status

Report these changes in circumstances to theMarketplace when they happen
Get the benefit of advance payments of the premium tax credit
Will report the payments on your tax return and reconcile the amount of the payments  with the amount of credit for which you are eligible


Posted on 9:51 AM | Categories:

Thinking of switching from Turbo-Tax

Over at Bogleheads we came across the following discussion:

Thinking of switching from Turbo-Tax

Postby tennisplyr » Wed Jan 28, 2015 9:29 am
Have been using TT for the last 3 or 4 years but am tired of their high costs. Has anyone switched from them? Am curious who you are now using....was it easy to make the transition? I use TT premier, I like that they pull in all of my investment info from Fidelity and VG. I'm 65, wife and I are both retired. PS, I'm not afraid to spend for service but wonder if I am being wasteful. Thanks.
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Re: Thinking of switching from Turbo-Tax

Postby flyingbison » Wed Jan 28, 2015 9:32 am
I've used TaxAct a couple of times in the past, but clicking through all the questions drive me nuts, so most years I just use Free Fillable Forms.
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Re: Thinking of switching from Turbo-Tax

Postby ThankYouJack » Wed Jan 28, 2015 9:51 am
I'm in the same boat as the OP. Is TaxAct pretty similar to TurboTax? I really like TurboTax but am wondering if it's worth the extra ~$80 for me.
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Re: Thinking of switching from Turbo-Tax

Postby BigFoot48 » Wed Jan 28, 2015 9:57 am
I switched from TT to H&R Block this year and so far it looks very good at about half the cost but check back in April for a final report.
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Re: Thinking of switching from Turbo-Tax

Postby Sbashore » Wed Jan 28, 2015 10:27 am
I've been using Turbo Tax for many years. I'm switching to Tax Act this year.
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Re: Thinking of switching from Turbo-Tax

Postby neurosphere » Wed Jan 28, 2015 10:36 am
I've only every used TaxAct for personal and client returns, so I can't compare it to others. Yes, the interviews are always a little annoying, but I assume that's standard in every similar software package? But I usually fill the information directly into the forms first, and that gets me 95% there. There are some pieces of information which can only be properly entered through the interview process (i.e. in the past, backdoor Roth's were one such example).

But if you've already entered the information from received documents and worked through the forms as if you were doing them "by hand", then the interview process goes quickly. I also find that the interviews serve as a good "double-check" of my work. Occasionally I'll have missed entering some item, or sometimes the interview ends up changing my initial results, which causes me to re-evaluate my approach and figure out who is right, me or them. Remember, there are indeed errors in tax software, so don't always assume it is you who is wrong. :D
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Re: Thinking of switching from Turbo-Tax

Postby investor1 » Wed Jan 28, 2015 10:37 am
The closest thing you'll find is H&R Block. TT is the best at simplifying the process. H&R Block isn't far off. TaxAct is good for people that are looking for less of the simplified wizard like experience and want to have the freedom to mess with more line items on the tax form.

In the past, I've used both TT and TaxAct to do my taxes just to double check everything. I go with whatever is cheaper from there. Given TT's cost hike, I think I'll switch to H&R Block.
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Re: Thinking of switching from Turbo-Tax

Postby BigFoot48 » Wed Jan 28, 2015 11:37 am
This might also be a reason to switch but I wouldn't assume the other companies don't do this too.
Intuit (INTU), the company that makes TurboTax, maintains a database containing users’ Social Security numbers, names and other personal data — even for customers using the desktop version of the software who save their files on their own hard drives.

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Re: Thinking of switching from Turbo-Tax

Postby mrspremise » Wed Jan 28, 2015 11:51 am
I opened a State Farm checking account (min balance is $25) for the TurboTax discounts. Premiere is $20 for me.
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Re: Thinking of switching from Turbo-Tax

Postby sfnerd » Wed Jan 28, 2015 12:00 pm
I've used TaxAct every year, except last year, when I used TurboTax. This year I switched back to TaxAct.

TaxAct is much simpler, and way cheaper. Even when I had my own business, investments, etc., TaxAct always did everything I needed it to.

The only thing TaxAct is problematic with is MLPs. These get a bit tricky. Now that I understand them, though, it's back to TaxAct. 20 bucks for their most full-featured version with support.
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Re: Thinking of switching from Turbo-Tax

Postby tennisplyr » Wed Jan 28, 2015 12:42 pm
sfnerd wrote:I've used TaxAct every year, except last year, when I used TurboTax. This year I switched back to TaxAct.

TaxAct is much simpler, and way cheaper. Even when I had my own business, investments, etc., TaxAct always did everything I needed it to.

The only thing TaxAct is problematic with is MLPs. These get a bit tricky. Now that I understand them, though, it's back to TaxAct. 20 bucks for their most full-featured version with support.


Does Taxact allow you to directly import income from Fidelity, Vanguard, etc?
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Re: Thinking of switching from Turbo-Tax

Postby masteraleph » Wed Jan 28, 2015 12:48 pm
We'll see how things go this year, but we switched to H&R Block Deluxe + State. We have things that would necessitate schedules B and D (so Turbotax would now require Premier), and will probably have Schedule C as well (for small jobs with no real deductible things- no guidance needed, really) and so would need Home and Business. Meanwhile, H&R Block Deluxe is supposed to still do those things, and Newegg had a 50% off deal earlier this month. Will comment or make a new post once I've actually gotten all of our forms and filed.
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Re: Thinking of switching from Turbo-Tax

Postby livesoft » Wed Jan 28, 2015 12:51 pm
I got TaxAct free download. Then I got TurboTax free download. Price is the same. I guess until TurboTax raises their prices, I will continue to use them.
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Re: Thinking of switching from Turbo-Tax

Postby harryw » Wed Jan 28, 2015 1:14 pm
tennisplyr wrote:Does Taxact allow you to directly import income from Fidelity, Vanguard, etc?


No, only from Betterment, Form8949, GainsKeeper, Raymond James, ShareBuilder and TD Ameritrade. For all others you have to download a CVS file and then import that into TaxACT.
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Re: Thinking of switching from Turbo-Tax

Postby Blues » Wed Jan 28, 2015 1:17 pm
I switched from TT to TaxAct years ago. I rarely if ever use the "interview" process and opt to directly input data to the applicable forms instead. ("Quick Entry" to forms is available on both the desktop and online versions.)

I have never had any reason to regret my decision to make the switch.
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Re: Thinking of switching from Turbo-Tax

Postby Toons » Wed Jan 28, 2015 1:19 pm
I have been a TaxAct convert for years ,switching from Turbo-Tax.
Having been on this board for several years now,I can say with certainty that I have seen more
"I'm switching to TaxAct or HRblock " posts this year than EVER before. :happy
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Re: Thinking of switching from Turbo-Tax

Postby Quotia » Wed Jan 28, 2015 2:09 pm
I switched to TaxAct last year. Last year I actually ran my taxes with both TT and TaxAct to compare, and the results were the same, so I filed with TaxAct. I don't import - I like to enter everything myself - to that functionality was not a consideration for me.

This year, I'm sticking with TaxAct.
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Re: Thinking of switching from Turbo-Tax

Postby pshonore » Wed Jan 28, 2015 2:44 pm
BigFoot48 wrote:This might also be a reason to switch but I wouldn't assume the other companies don't do this too.
Intuit (INTU), the company that makes TurboTax, maintains a database containing users’ Social Security numbers, names and other personal data — even for customers using the desktop version of the software who save their files on their own hard drives.

Virtually all tax preparers/e-filers (HRB, TT, Tax Act, etc are required by IRS regulations to retain this data until the end of the calendar year. If you filed online and wanted to amend your return, would you want to input the data all over again?

Good info on the regulations at http://www.irs.gov/pub/irs-pdf/p1345.pdf

You' be surprised at the number of people who request copies of previous year returns
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Re: Thinking of switching from Turbo-Tax

Postby flyingbison » Wed Jan 28, 2015 2:52 pm
Blues wrote:I switched from TT to TaxAct years ago. I rarely if ever use the "interview" process and opt to directly input data to the applicable forms instead. ("Quick Entry" to forms is available on both the desktop and online versions.)



Just curious - what's the advantage of doing it that way, instead of just using Free Fillable Forms?
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Re: Thinking of switching from Turbo-Tax

Postby pshonore » Wed Jan 28, 2015 3:05 pm
Its a misnomer to think you can key directly on the forms using tax software like TT or Tax Act - you usually cannot. For example go to Form 1040 and try to key on Line 7 - Wages. It will only let you key there if you're overriding a value and do not want to efile. What it wants is for you to fill out a worksheet/form for each W2 and it will calculate the total and put on Line 7. I've never used fillable forms but I'm guessing you actually key on the form itself. That means you've added up all your W2 forms and put in the total. That's how math errors happen. Of course you can miskey a number on any form/worksheet but the software program prevents a lot of math errors and transposition errors when moving a number from one form to another.
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Re: Thinking of switching from Turbo-Tax

Postby tomd37 » Wed Jan 28, 2015 3:13 pm
For those of you who use Tax Act, do any of you volunteer in the TCE or VITA programs which use the TaxWise program? If so, how does Tax Act compare with the TaxWise program? I have used the TaxWise program for the past eleven years and find it a very good program and easy to use in all the situations that are in-scope for TCE and VITA.
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Re: Thinking of switching from Turbo-Tax

Postby harryw » Wed Jan 28, 2015 3:25 pm
flyingbison wrote:
Blues wrote:I switched from TT to TaxAct years ago. I rarely if ever use the "interview" process and opt to directly input data to the applicable forms instead. ("Quick Entry" to forms is available on both the desktop and online versions.)



Just curious - what's the advantage of doing it that way, instead of just using Free Fillable Forms?


- Instantaneous recalculation,
- warning if you are about to overwrite a value that comes from another form
- info on where a field value comes from
- ability to flag a value as an estimate
- attaching additional supporting information to a field value
- easier navigation between forms
- error checking
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Re: Thinking of switching from Turbo-Tax

Postby Blues » Wed Jan 28, 2015 3:30 pm
flyingbison wrote:
Blues wrote:I switched from TT to TaxAct years ago. I rarely if ever use the "interview" process and opt to directly input data to the applicable forms instead. ("Quick Entry" to forms is available on both the desktop and online versions.)



Just curious - what's the advantage of doing it that way, instead of just using Free Fillable Forms?


Not sure if I understand your question (since I'm not familiar with the free fillable forms) but I'll try to explain my process.

I first import relevant data and forms from the prior year's return.

Once I receive my 1099's and any other required forms, I input the necessary info into the same "documents received" on the app.
(This usually consists of just a few line items and answers. The payer, EIN, and all other background info is automatically imported into the document if it is one which I filed the prior year for that entity.)

The data I input into the form is sent to all other applicable federal forms and schedules as well as my state return which is prepared at the same time (for the most part).

Once I'm done with the federal documents I add some required state info regarding exemptions and credits as necessary, run the "audit" for errors or omissions (for both federal and state) and e-file.

If there's an easier and more expedient way I haven't found it yet. And the price is right. YMMV, of course.
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Re: Thinking of switching from Turbo-Tax

Postby coop » Wed Jan 28, 2015 5:51 pm
I own an older MacBook, circa 2007, as my only computer. For many years I had been a loyal TurboTax customer. A couple of years ago TurboTax, without any warning or notification, changed their software so that it would no longer run on the Mac operating system that I have. I didn't want to do my taxes online and have all my personal information captured by TurboTax. I cannot upgrade to another Mac OS. So I was faced with having to buy a new computer in order to retain my privilege of buying TurboTax's product.

As a result, two years ago I discovered IRS's fillable forms. That, combined with the fact that I have taken the time to learn the basics of individual taxes, and have downloaded and read the appropriate IRS publications, combined with the fact that I have a fairly simple tax situation each year that doesn't change much, and I find that I have no need for tax software. In fact, it is much, much easier just using IRS fillable forms than going through TurboTax's cumbersome interview process, along with their plethora of up-sell ads.

It helps that I live in Texas, which has no state income taxes. Yes, one can make math errors, but I compensate by using Excel to enter some of the data, which I save as backup. For example, in years that I itemize deductions, I simply do an Excel sheet that lists all of my charitable contributions for which I have receipts. I try also to manage my withholding throughout the year to pretty close to a zero-pay or zero-refund situation. I also don't mind printing 3-4 pages of forms and dropping it in the mail. In summary, it's not that difficult to do without tax software.

My tax situation has not always been this simple, so I respect and understand the need for tax software for those who have a somewhat complicated situation. But with simple wage income and itemized deductions that consist of property taxes, mortgage interest, and charitable contributions, it's just not that hard to use the fillable IRS forms. Had TurboTax not done all they could to fire me as a customer, I'd still be taking twice as long and spending an extra $50 or so on their product. Happily, I found a much better alternative at a much better price.
Posted on 5:53 AM | Categories: