Like most people, I loathe doing taxes. Getting the forms, collecting all the right paperwork, calling the different places for information that should have been given but wasn’t….always a headache. But even more than doing the actual taxes is the fear of the dreaded audit. The tax code in the U.S. is staggering in scope. Even being as diligent as I can possibly can, there is always a fear that something is going to be forgotten or missed and thus triggering the infamous IRS audit.
To help me minimize the risk, I have been using TurboTax Online since 2007. And while I love the software for its ease of use and support, one thing I didn’t like was the price. For me it runs about $100 per year to do both state and federal returns. And while I hated paying it, I would swallow it because it was just so quick and easy to use.
So this year I decided to try another programs to see if it was as good at a lower cost. After reading a few reviews, I decided to try TaxAct. It was pretty highly rated, and at 1/3 the cost of TurboTax Online, why not give it a shot?
I downloaded the stand alone TaxAct Deluxe with my state for about $30. My initial impression was positive, but I had forgotten all of the things TurboTax automated from previous years. Still it wasn’t too bad.
Then I came to the part where it asks for interest that was received. I had a few bank accounts that I did not receive a 1099-INT because the total interest was less than $10. Unlike TurboTax, which asks for the name of the institution and a few other items, TaxAct wanted me to fill out a 1099-INT. And that’s fine too. But the issue was I did not have a payee EID number for the banks. (On a separate, but related, note, when I asked the banks for this information one of them said “Oh, we don’t give that information out.” When I told them that I needed it to fill out a 1099-INT form for the IRS she told me that she couldn’t give that information out to “just anyone” and suggested I not even tell the IRS about it. Good Grief!)
So this led me down the first of many wild goose chases with TaxAct that end up with me calling the IRS for advice/direction on three separate issues. I have never needed to do that with TurboTax.
Another point of issue was on the charitable donation portion of Schedule A. TurboTax prompts you to input the specific information (who, what, where, how much) for all the charities and keeps a record of it for your future use. TaxAct simply asks for how much. And while that might be fine for most purposes, if I need to go back and look at the details from a prior year, TurboTax makes this much easier through better record keeping.
And the final think that set me on edge was on the Illinois State form. Illinois has a “Use Tax” for anything that you buy on the internet that doesn’t charge state sales tax (we’re looking at you, Amazon…) TurboTax always used to calculate this for me, but TaxAct want me to get the form and calculate it myself. This made me very nervous, especially considering I did not have the UT form they mentioned nor did I know where to get it. Later I found out that it was simply the total amount purchase times the state sales take rate of 6.25%. Duh!
By the time I was finished, I was very nervous about the tax information I was about to submit. So I decided that, since TurboTax doesn’t charge until I file, I would run it all through TurboTax and see what the difference was.
It took me about 35 minutes to do both state and federal taxes using TurboTax. I whipped through it like a hot knife through butter. And I got that warm, fuzzy feeling that everything was going to be okay. Well, as warm and fuzzy a feeling as you can get while doing taxes. I finally reached the end and the verdict was in…
It turns of that my refund amounts for both state and federal taxes were identical for both pieces of software. I felt relieved that TaxAct did not lead me astray after all. The main differences were:
- · TurboTax was easier and more friendly to use
- · TurboTax was faster, but that might have been because it had historic data to go by
- · TaxAct was much cheaper. $30 vs $90 for TurboTax Deluxe with State.
So which will I use next year? I don’t know. I really like the price of TaxAct, but I miss the reassurance I always felt with TurboTax. Is that extra money worth that feeling and the slicker interface?
I guess I have a year to decide.