How not to buy tax software
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Thread: How not to buy tax software

  1. #1
    Registered User Niclo Iste's Avatar
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    Thumbs up How not to buy tax software

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  2. #2
    Registered User Guts3d's Avatar
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    Nice heads up! I'll pass this on.
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  3. #3
    Registered User slgrieb's Avatar
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    Indeed, I'm tempted to email this to most of my customers.

  4. #4
    Driver Terrier NooNoo's Avatar
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    I don't get why if there is free software to file taxes people want to buy software? Or does the paid software work so much better?
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  5. #5
    Registered User Niclo Iste's Avatar
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    I think it's a matter of perception. Granted there are some who are oblivious to the free methods I assume people look for something to buy because they feel that something that costs money must be good or have superior support. The only other thought is that they somehow believe that using something they bought makes them less accountable if something goes wrong.
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  6. #6
    Registered User slgrieb's Avatar
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    Quote Originally Posted by Niclo Iste View Post
    I think it's a matter of perception. Granted there are some who are oblivious to the free methods I assume people look for something to buy because they feel that something that costs money must be good or have superior support. The only other thought is that they somehow believe that using something they bought makes them less accountable if something goes wrong.
    Perception definitely counts for a lot. Even though Intuit offers free basic tax prep software, I suffer severe cognitive dissonance anytime I hear the words "free" and "Intuit" in the same sentence. Internal Revenue has become really, really rabid about trying to squeeze every penny out of the taxpayer, and over the last couple of years has hired bunches of auditors and investigators; which in turn makes me a little dubious about their software. "Deductions? You don't need no stinking deductions!"

    My first wife was a CPA with a Masters Degree in accounting who owned her own firm for many years, and she laughed at TurboTax for all of those years; so I'm really biased toward tax professionals to do this stuff for me. Anyway living in a small town, I feel obligated to throw some business back to my customers.

  7. #7
    Registered User CeeBee's Avatar
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    Quote Originally Posted by NooNoo View Post
    I don't get why if there is free software to file taxes people want to buy software? Or does the paid software work so much better?
    The free software usually works for simple tax returns with standard deductions (probably for 30-50% of people). If you want to itemize (deduct things like mortgage interest, property taxes, donations, etc etc) you need the more advanced features that are not free.
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  8. #8
    Registered User CeeBee's Avatar
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    Quote Originally Posted by Niclo Iste View Post
    I think it's a matter of perception. Granted there are some who are oblivious to the free methods I assume people look for something to buy because they feel that something that costs money must be good or have superior support. The only other thought is that they somehow believe that using something they bought makes them less accountable if something goes wrong.
    Not necessarily.
    I could use the free software and do a 1040A. That would mean only the standard deduction of $11,600 for a married couple plus whatever it is for my son. Or I can itemize $35k but I need the advanced software. The choice is simple.
    Pretty much all software gives a 100% accuracy guarantee and the makers claim they will pay any penalties (assuming correct input data that is).
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  9. #9
    Registered User CeeBee's Avatar
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    Quote Originally Posted by slgrieb View Post
    I'm really biased toward tax professionals to do this stuff for me.
    And they use the very same software you would (at least at the core)
    I've only once used a tax pro when the numbers were way worse than what I hoped for. $140 later he came to the exact same numbers.
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  10. #10
    Registered User slgrieb's Avatar
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    Quote Originally Posted by CeeBee View Post
    And they use the very same software you would (at least at the core)
    I've only once used a tax pro when the numbers were way worse than what I hoped for. $140 later he came to the exact same numbers.
    Everyone's mileage varies. I used TurboTax some after I divorced my tax preparer, but I noticed a tendency for IRS to refund me a bit more than TurboTax said I should expect. All tax software isn't created equal: they don't all have the same ability to import data (sometimes including last year's return accurately) and sometimes they miss some deductions. There's a lot of variance in the interview and review modules as well. Quality of support differs too.

    http://www.nytimes.com/2012/02/12/bu...view.html?_r=1

    http://www.pcmag.com/article2/0,2817,1904319,00.asp

    One of the things I like about dealing with a pro, is that I think they are more likely to ask the right questions and find all the deductions than tax software. One of the benefits to pro grade tax software is frequent updates. Believe it or not, IRS is still trying to decide how to apply some changes in tax law, and is revising forms even as I post. Professional software is updated very often, and most of it will even flag changes that could effect a previously filed return.

    The CPAs, tax attorneys, and so on that I work for use software from just about every company on the planet, but the one thing they have in common is that if I have to call support to help resolve some problem with the software, I get instant response, and domestic support from a knowledgeable professional. Even with Intuit's La Certe software, you talk to somebody in Plano, Texas who really knows his job; not Raji in India. So, I've got a lot more faith in the quality and accuracy of professional software than I have in the home stuff.

    Finally, my current tax preparer charges about what I'd pay for TurboTax and I've used her for years and never had a gripe about my refund or been audited.

  11. #11
    Registered User CeeBee's Avatar
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    Quote Originally Posted by slgrieb View Post
    All tax software isn't created equal: they don't all have the same ability to import data (sometimes including last year's return accurately) and sometimes they miss some deductions. There's a lot of variance in the interview and review modules as well.
    True they are not equal. I've been using software for 10 years, tried them all over time, and TurboTax is definitely the best as far as I'm concerned. Never needed support, found the explanations as clear as it gets when I was in doubt. And it handled energy-efficient improvements perfectly, even taking into account the credits from prior years
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  12. #12
    Registered User slgrieb's Avatar
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    Quote Originally Posted by CeeBee View Post
    True they are not equal. I've been using software for 10 years, tried them all over time, and TurboTax is definitely the best as far as I'm concerned. Never needed support, found the explanations as clear as it gets when I was in doubt. And it handled energy-efficient improvements perfectly, even taking into account the credits from prior years
    That's wonderful!

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