I don't know if my tax return was complete.
Posted by Caitlin
The following post in our Reader Question series is an actual user submitted question. To maintain the integrity of the original question, we do not edit or change reader questions in any way.
Q: I don't know if my tax return was complete. [E-File Tax Returns] never asked me for payment. I gave it my account information for direct deposit… Will it be taken out of my account?
A: If you are entitled to a refund, most online tax preparation services will give you the option of paying for their service with a portion of that refund. In this case, you would not need to enter credit card information. However, it is impossible for NextAdvisor.com to confirm whether your tax return was completed successfully with E-File Tax Returns. If you have a service issue with any of the various services reviewed on NextAdvisor.com, you should contact the company directly for assistance. You can follow this link to contact E-File Tax Returns.
To learn more about online tax preparation services, see our reviews and comparison chart.
Doing my own taxes for the first time, with TaxAct
Posted by Caitlin
Last month, I blogged about choosing a tax preparation service. I ended up deciding to use TaxAct to help me file my own taxes for the first time in my life. And, for the most part, it turned out to be surprisingly easy!
First, I gather all the W-2s and other tax documents that I have received in the mail over the past few months. I click on the link in the NextAdvisor.com review, which takes me to the TaxAct website. I register with TaxAct, creating a username and password. I don't have to get out my credit card yet, because I won't need to pay until I'm done and ready to file, which is nice.
Is there a charge for each W-2?
Posted by Caitlin
The following post in our Reader Question series is an actual user submitted question. To maintain the integrity of the original question, we do not edit or change reader questions in any way.
Q: I have several W-2's. Is there a charge for each one or not [with TaxAct]?
A: TaxAct and other online tax preparation services do not charge per W-2. The pricing plans differ slightly, but in general you can expect to pay based on the number of federal and state returns you need to file.
To compare prices on tax preparation services, see our comparison chart.
Can I file multiple state returns online?
Posted by Caitlin
The following post in our Reader Question series is an actual user submitted question. To maintain the integrity of the original question, we do not edit or change reader questions in any way.
Q: We live in one state that I work in but my husband works in a different state. Can I still file the state taxes online? Which state do I file first?
A: An online tax preparation service makes it quick and easy to file multiple returns. You can add additional state returns in any order you like. Online tax preparation services are especially useful in a slightly more complex tax situation like yours, because they help you review your returns to ensure that there are no errors or inconsistencies that could cause you to accidentally miscalculate the amount that you owe, or unintentionally declare the same income in multiple states.
To learn more about online tax preparation services, see our reviews and comparison chart.
Is a free, online tax preparation service a good choice?
Posted by Caitlin
The following post in our Reader Question series is an actual user submitted question. To maintain the integrity of the original question, we do not edit or change reader questions in any way.
Q: Is a free tax service online (TaxAct) just as good as buying a program like TurboTax?
A: TurboTax, H&R Block and TaxAct all offer various online packages, including a free, very basic option for filing a federal return, as well as physical software. (The reviews on NextAdvisor.com are for the online services only.) If you only need to file a 1040EZ, you can use any of the free options. If a 1040EZ is not adequate for your tax needs, but you would still like to file your federal return for free, TaxAct's online service is your best option. All of these services will charge you a fee if you also need to file a state return. If you would prefer physical software to an online service, you can download a tax program or order software on a CD-ROM from TurboTax, H&R Block or TurboTax. This software will be more or less the same as the equivalent online tax preparation package.
So, yes, an online service is just as good as a physical program. But no, a free service is not just as good as one that you pay for, because it will only include a very basic federal return, and not a state return. The tax preparation package that you choose should correspond to the complexity of your financial situation. If you own a home business, for example, there are tax preparation packages specifically tailored to your needs, but they will be more expensive.
To learn more about online tax preparation services, see our reviews and comparison chart.
Choosing the right tax preparation service
Posted by Caitlin
I have never done my own taxes. And unfortunately, it's not because I have so much money and so many investments that I require the assistance of a professional. No, it's because up until now, my parents have always filed for me.
This year, though, is going to be different. This year I am doing my own taxes, for the first time ever. Since I'm feeling rather daunted by this intimidating task, I definitely want a tax preparation service to help me out. So naturally, I'm turning to the NextAdvisor.com reviews and comparison chart to help me decide which tax preparation service is right for me.
I need to file a federal return as well as a California state return. Since I need to file a state return, filing for free is not an option. But I would still rather pay a relatively low fee, especially since my financial situation is fairly simple. On the other hand, since I've never filed my own tax return before, I would prefer a service that will provide thorough and reassuring guidance throughout the process.
After reviewing the tax preparation and filing services comparison chart, I initially considered TaxBrain, because of my uncertainty about my financial needs. Rather than choosing a tax package right away, you fill out a short questionnaire and then TaxBrain generates the appropriate forms for your specific financial situation. I found this unique feature appealing. But after reading the tax preparation and filing services FAQ page, I determined that I should be able to fill out a 1040EZ, since my income is less than $100,000 per year, my taxable interest is not over $1,500, I have no dependents and I do not need to itemize my deductions. Since TaxBrain charges $14.95 to file a 1040EZ, while most of the other tax preparation services allow you to file one for free, I decided that TaxBrain would not be a cost effective choice for me.
Next, I considered TurboTax, because it is the top ranked tax preparation service on NextAdvisor.com, and according to the bottom line, it is the easiest service to use and offers the best online deduction finder tools. TurboTax also includes audit protection. However, I found TurboTax's state only fees to be a bit high, at $34.95. Also, since I am planning to file a 1040EZ, I won't be itemizing my deductions, so I would not benefit from that feature of TurboTax.
I then considered TaxAct, which is the cheapest of the services reviewed on NextAdvisor.com and, according to the bottom line, offers the best overall value for online tax preparation and filing. TaxAct does not offer audit protection, which would be nice to have, but given my financial situation, I am reluctant to spend the extra money for this assurance. TaxAct does offer unlimited email support, which I appreciate, since the process of filing tax returns is new to me.
After considering my options, I have decided to use TaxAct to file my federal and state returns. Although I would prefer a service with audit protection, I am willing to go without it in order to save money. With TaxAct, I can file my federal return for free and pay only $13.95 for my state return, which is definitely a good value. I am confident that TaxAct is the right tax preparation service for my needs.
To learn more about tax preparation and filing services, see our reviews and comparison chart.
What is the best tax service for a home business?
Posted by Caitlin
The following post in our Reader Question series is an actual user submitted question. To maintain the integrity of the original question, we do not edit or change reader questions in any way.
Q: What is the best tax program for a home based business to use? Always used my CPA? Thank you.
A: TurboTax offers a Home & Business tax preparation package, which is specifically designed to make it easy to handle your personal and business taxes. TurboTax Home & Business provides step by step guidance and identifies deductions that are specific to your business. TaxBrain also offers a package aimed at small business owners. And if you would feel more comfortable with assistance from a tax professional, you may wish to consider H&R Block's Signature or Online Office packages.
To learn more about TurboTax, H&R Block, TaxBrain or other online tax preparation services, see our reviews and comparison chart.
Can you accept schedule D transactions?
Posted by Caitlin
The following post in our Reader Question series is an actual user submitted question. To maintain the integrity of the original question, we do not edit or change reader questions in any way.
Q: Can Turbo Tax or H&R Block accept electronically the Schedule D transactions for capital gains or losses from Merrill Lynch accounts? If so, what is the limit on the number of transactions?
A: All of H&R Block's tax preparation packages include Schedule D, for capital gains and losses, as well as Schedule D1, for additional gains and losses. H&R Block does not limit the number of transactions. All of TurboTax's packages also include Schedule D and D1, with the exception of their free edition, which does not support these forms. TurboTax Online allows up to 500 transactions. TurboTax's desktop software, which is available via download or CD, allows unlimited transactions.
To learn more about H&R Block, TurboTax or other online tax preparation services, see our reviews and comparison chart.
Last year's stimulus checks were tax free
Posted by Caitlin
If you received a stimulus check from the government last year, you do not need to pay taxes on that check this tax season. You do have to acknowledge receiving a stimulus check, for bookkeeping purposes, but you should not calculate your check as income.
About 15% of those who have already filed their 2008 returns have made the mistake of declaring their stimulus check as income, which has resulted in these taxpayers receiving smaller refunds or making higher tax payments than they should have.
To about tax preparation software, see our reviews and comparison chart.
How many returns can I do?
Posted by Caitlin
The following post in our Reader Question series is an actual user submitted question. To maintain the integrity of the original question, we do not edit or change reader questions in any way.
Q: If I buy the full package with federal and state e-file from TurboTax or TaxAct, how many returns can i do? I have a family of 6.
A: The various packages offered by the tax preparation services reviewed on NextAdvisor.com include, at the most, one federal return and one state return.
Depending on the composition of your household, a single tax return may be enough. If you are married, you and your spouse can file jointly, and if you have children, you can include them as dependents. If other family members live with you, they may also qualify as dependents, as long as they do not provide more than half of their own financial support. If your family members do not qualify as dependents, they will have to file their own tax returns seperately.
To learn more about TurboTax, Tax Act, or other online tax preparation services, see our reviews and comparison chart.
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Disclosure: NextAdvisor.com is a consumer information site that offers free, independent reviews and ratings of online services. We receive advertising revenue from most of the services we review. Our editors thoroughly research and whenever possible test each service we review and offer their honest opinions about each one. We are independently owned and operated and all opinions expressed on this site are our own.