Talking Turkey About Tax Time

Tax Time: When to Ride Solo and When to Bring in a Pro

It’s always right around this time of year when my W-2s and 1099s begin taunting me from the organized chaos that is my desk.

“Don’t ignore me,” they chide. “April 15 will be here before you know it.”

Still, every year I push them aside in favor of more mundane tasks like watching “Say Yes to the Dress,” even though I promise myself every year that I will not procrastinate, that I will file in February so that I will have my refund in time for March Madness.

I still haven’t filed.

Since I’m not doing my taxes anytime soon, I decided to take a more theoretical approach to tax preparation by reviewing the best free services and paid software programs for those of us filing on our own. If you want to pay a professional, I’ll offer some tips on how to find the right accountant and what information to bring to your appointment.

Can You Handle It?

More than 60% of Americans hire tax professionals each year — as if we needed more proof that the tax code is cryptic. But before you jump at the chance to have someone else do the grunt work, understand that the average itemized return costs $200 (simpler returns can cost $50 to $100 and more complex returns can cost several thousand dollars)! Experts agree that if your tax return is not complicated (e.g., you’ve paid withholding tax throughout the year and you’re just transferring numbers from your W-2, bank interest statement, mortgage interest and stock dividend statements), then you should attempt to do it alone.

Of course, you’re not really alone. A growing number of people are using tax preparation software to complete and file returns. Programs allow you to import financial data from Quicken or QuickBooks, offer tons of in-depth tax information and, for an added fee, will supply a trained tax professional to double-check your work. The basic cost of the software varies from $20 to $130, depending on the complexity of the return and whether you choose to e-file both state and federal returns.

Rankings of tax preparation software brands are available at ConsumerSearch, http://www.consumersearch.com, a web site similar to Consumer Reports, which suggests products after evaluating the universe of customer reviews. ConsumerSearch recommends TurboTax Deluxe Federal + eFile + State for most filers, since the program deals with common federal and state tax issues, such as tax breaks for home mortgages and child care. It can run on Windows and MAC operating systems and is available as boxed/downloadable software for your desktop or online. The 2010 boxed form sells for $41.99 with free shipping on Amazon at http://www.amazon.com. It includes five free federal e-files and one free state software download. (The state e-file costs an extra $20). For more complicated issues, such as multiple stock sales, business deductions or mortgage refinancing, try TurboTax Premier ($63.99 boxed through Amazon).

Sure, you can try free online versions at TurboTax, H&R Block At Home and TaxACT, but they only include federal tax prep. If you are a low- to moderate-income individual (generally $49,000 and below), or you’re age 60 or older, you may be eligible for free help and electronic filing through the IRS Volunteer Income Tax Assistance Program or the Tax Counseling for the Elderly Program. Certified volunteers are available at more than 7,000 sites nationwide to help people with basic tax returns. For more information, visit http://www.irs.gov/individuals/article/0,,id=107626,00.html.

If you’re not eligible for the IRS service and you have a relatively simple return, ConsumerSearch recommends TaxACT’s Ultimate Bundle Federal + State, which is available online for $17.95 at http://www.taxact.com/taxes-online/bundle-and-save.asp. That price includes federal and state prep and e-files.

Bringing in the Big Guns

Depending on how financially secure and time-strapped you are, it may make more sense to hire a professional.  

Among the reasons:

• You’re self-employed and own your own business.

• You frequently trade stocks and mutual funds.

• You own rental property.

• You have experienced a significant change in the last year, such as a divorce, property sale or death of a spouse.    

In selecting an accountant, ask friends and associates for referrals or check with professional associations, such as the National Association of Enrolled Agents, http://www.naea.org, or the Georgia Society of CPAs at http://www.gscpa.org.

If it’s your first time meeting with an accountant, be sure to bring a copy of your most recent tax return, W-2 form, 1099 forms used to report various types of income (such as interest from savings accounts and contractor income), K-1 forms for income from a partnership, small business or a trust, and your expense record (such as receipts, canceled checks, forms and spreadsheets for tax-related expenses, including moving expenses, medical and dental expenses, real estate taxes, childcare costs and gifts to charities).

The more line items you have totaled ahead of time, the less time your accountant will spend doing the math, which means more money in your pocket.

The one saving grace in all of this: This year, the IRS has extended the tax deadline by three days to April 18. The countdown begins.

Deal Detective: A Week of Cheap Thrills in Stone Mountain/Redan

Little Caesars, with locations throughout Stone Mountain, is offering a crazy bread and crazy sauce combo for $1.99 until Feb. 28. Get the deal at http://www.littlecaesars.com/coupons/crazy_combo.inc.asp.

• Loving Touch Animal Center at 1975 Glenn Club Drive in Stone Mountain, is offering $5 off any boarding until March 3. Get the coupon at http://couponclipper.com/print/biz/LOVING-TOUCH-ANIMAL-CENTER?acnt=3.

To send us a hot deal for consideration (at least one week before its expiration date), e-mail margie@margiereports.com.


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