This is the continuation of my TurboTax review, started here.
As I mentioned, TurboTax software provides an excellent interface, very easy data entry and import features, and fine (may be even too fine) granularity of software bundles per feature sets.
So what’s next?
Deductions and credits: As I mentioned, I was using the TurboTax Premier Federal + e-File + State 2010 version. In this version I was able to calculate correctly all the deductions and find the credits I’m entitled to. The program identified certain overpaid taxes (In my case it was the social security, as I’ve already mentioned before), and suggested certain credits that I could use (in my case – foreign tax credit, due to my investments). The software also allows comparing the itemized deductions and the default deductions and allows choosing which you would prefer to use. I compared the software calculations to what I was able to calculate manually based on my own research, and based on my previous tax returns (for similar years), and it appears to be correct.
Federal filing options: The software comes with 5 free federal efiles (i.e.: You can file up to 5 federal tax returns electronically, which means that you can use it to file for yourself, your spouse, and maybe a couple of friends). I chose this option. Alternative would be to print out all the forms and mail them. I tested it. The print outs include all the relevant forms (optionally, you could also print out all the calculation worksheets) and instructions to you. The instructions are very detailed, and show the summary of your return and what and how you should file.
State filing options are the same as the Federal, except that the free e-file is not included. I preferred to pay additional $19.95 for state e-file, but I could also file the printed forms for free, by mailing them (well, not exactly free, would have to pay postage).
Benefits of the e-filing are obviousL
1. You get an immediate confirmation of filing.
2. You get an acceptance/rejection notification within hours. If your forms are accepted by the IRS/State, that’s the proof that you filed your taxes on time (instead of using the “Certified” mail option when filing by mail). If they’re rejected – you have a chance to fix and resubmit quickly, and not miss the deadline.
3. You get your refund much quicker. It took me 6 days to receive the state refund and 10 days to receive the Federal refund. Had I mailed – it would take weeks for refunds to arrive.
4. You save paper.
Archiving: Apart from printing and putting it in a folder, which is an obvious option, the software provides alternatives. You can export your return to a PDF file and save it on your PC or a back-up disk. This is very useful, as you can later import the saved PDF file into another tax software next year. Also, you can just keep the TurboTax file as is in an archive or on a backup disk.
Audit defense: an option provided by TurboTax (and the competitor’s H&R Block At Home) for an additional fee. Basically, the service is representation in dealings with the IRS in case of audit. They won’t defend you in the Tax Court, but they will negotiate with the IRS, handle the paperwork, and make sure that the audit is as painless as possible. If you choose purchasing this service, you should do that before you get an audit letter from the IRS, otherwise it won’t be valid. If you purchase it, and do get a letter from IRS – don’t call IRS and don’t talk to them, call directly the audit defense team, and they’ll deal with it. For the additional $40 I chose to have this service for my peace of mind. If your return is not complicated and is based on just salary, then you probably can skip it. The guarantee that all the calculations are correct is included in the software price already.
Questions and support – TurboTax has a large community-driven Q&A site, where you can ask questions and search for answers. The interface to this site is integrated into the software, and you can ask a question or search for an answer directly from it. For a pay, however, you can also have a tax professional to help you over the phone, if needed. I didn’t feel such a need. The Q&A site is full with data and examples, and I was able to find answers to all the questions I had.
How long does it take to finish the tax return? Well, not too long. I prepared several mock returns, but when I started working on my final version – I started from scratch. It took me less than 2 hours from start to finish, from creating a new blank return to being ready to file. Very easy, at the convenience of my home.
Overall: Strongly advise using this software, I’ll use it next year again.
Your Little Advisor.