Thursday, January 30, 2014

Is TurboTax (or something similar) worth the investment?

Posted on 2:31 PM by Unknown
Over at Reddit we came across the following discussion:
Is TurboTax (or something similar) worth the investment? (self.personalfinance)
submitted  ago by saqneo
Background:
I graduated college last year and it's the first time doing my own taxes (previously done by parents). I tried using the free TurboTax service, but because I earned dividends, it said I would need to buy the premier version ($50) to fill out the Schedule D form.
I am wondering whether this is worth the price or if I am better off filling out the form myself? My income last year was like this:
  • One job and retirement/HSA contributions (all on W-2)
  • ESPP (capital gains/loss and dividends listed on one form)
  • Other holdings in one stock through different broker (capital gains/loss and dividends)
  • Small amount of interest from CD/savings accounts
So, would the paid version of TurboTax make my life easier? Or is it not much more difficult to file these details myself? Thanks!
Edit: Sounds like I'll be checking out TaxAct once I get home and comparing it to TurboTax results since it doesn't require payment upfront. Thanks for the advice, everyone!
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[–]Xonim 7 points  ago
Have you tried TaxACT? I haven't had any dividend / interest income in the past (though I do this year), but I remember seeing it as an option. Even your situation doesn't seem that complicated, I would assume it should allow you to file for free. Might be worth checking out.
[–]schimdo 2 points  ago
TaxACT is great, i have used it 3 years in a row now.
[–]wolfpackguy 6 points  ago
I find Tax Act to be cheaper and only slightly uglier. But TurboTax is still cheaper than an accountant.
[–]United Stateslukertin 5 points  ago
My dad has been using it for years. He remarked that due to the purchase and sales of stock, not using TurboTax basically requires much more time or getting a tax accountant. Definitely worth the $$.
Your situation is simpler to the point you it might not be that much of a different though.
[–]saqneo[S] 1 point  ago
Do you know if it's simplified at all if I only purchased/sold one stock and earned dividends on two (one is long term)? Thanks!!!
[–]United Stateslukertin 4 points  ago
Yes, the fact that you only dealt with 3 stocks makes it very simple. When you have your own business income stream or over like, $100-200k invested in taxable accounts TurboTax starts to become invaluable.
[–]schlade 4 points  ago
What I liked best about TurboTax was its ability to connect to my Schwab account and download all my transaction data for the year. The free alternative that I tried (TaxAct) allows you to import a CSV file from a brokerage account, but I found that it wasn't really handling my transactions correctly.
For me, TurboTax was well worth it because with the free alternatives, I would have had to manually input 50+ stock and options transactions. The P/L and cost basis numbers from the TurboTax import matched those on my Schwab statements perfectly.
If you don't have many complex transactions, however, I would recommend giving TaxAct a shot.
[–]JonCheddar 1 point  ago
how do you do this?
[–]bobbyk18 2 points  ago
I'm still debating between turbotax and an accountant, but the nice thing with TurboTax is that you do all the work before you pay, so you know about how much your refund should be if you go with another place, as well. I'm kind of upset that I had a $15 gain on one ETF move this year and it forced me to need to upgrade to Deluxe, which is an extra $50.
[–]United Statesplexluthor 3 points  ago
There are other free options.
Even if you end up paying for TT or TaxACT or whatever, only do it for one year. Save all the forms it generates, and work off those when you do your taxes by hand next year using Free Fillable Forms (same link as above). State taxes are also pretty easy to do by hand once the Federal return is complete, so don't pay extra for it, even this year.
[–]saqneo[S] 1 point  ago
I'll definitely check that out!
[–]United Statestoritxtornado 1 point  ago
I make > $58k, so I would have to use the Free File Fillable Forms (that will be available tomorrow). Is this the first year they are doing this?
I can't do the free TT because itemizing gets me a higher refund (I bought a house). I'm just wondering if it's worth paying the $50 for the Basic TT, but I guess I'll try the free one from the IRS when it is available tomorrow.
Sorry, that was a ramble. I don't have any real question other than asking if you had any knowledge of the free fillable forms.
[–]Williamisme 2 points  ago
I use pen and paper. It works pretty well.
[–]marcianitou 0 points  ago
i like TT it's easy 2 use (great if you have no knowledge and want something simple) plus you can get like 8 returns so your cost per use is not bad, way cheaper than paying someone to do it ! I will buy it again this yr
[–]United States13374L 1 point  ago
I got Premier a few years ago for the very reason you mentioned. It was a waste. I did Deluxe last year and it covered everything I needed.
[–]tripshed 1 point  ago
Just do it online at free web file at irs.gov. Don't waste money with these tax software. You can use them to verify your refund but don't use them to file. You case seems pretty straightforward.
[–]nikkiten 1 point  ago
I prepared my taxes on TurboTax last year and it said I owed $200, I did not submit and instead re-did them on TaxACT and i RECEIVED a $200 return. I will never use TurboTax again.
[–]die_civ_scum 1 point  ago
I don't think my free on post tax center would have gotten me the $1000 saver's credit that turbotax got me. Next year I will research everything I can and try to do my own taxes, but then get them checked at the tax center.
[–]nsummy 0 points  ago
I used to use the free options mentioned on the IRS site. They were terrible compared to Turbotax. of course this was about 5 years ago so perhaps tech has improved.
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