|From the Kenosha News on 2-6-05
Use your computer to do your taxes
One of the best uses of your computer is for preparing your tax return. I started doing this in 1995 using Macintax for our Macintosh. In about 1998, we switched to Windows and began using TurboTax, also an Intuit product. While I prefer Intuit's products, last year TurboTax wouldn't install on my computer, so I used TaxCut instead. Both of these work very much the same.
You need to get new tax software each year since it contains the specific tax laws, forms, and tables for that one tax year. You can buy the software in any electronics or office supply store, or you can buy it on-line. The state tax product is sold separately and can sometimes be downloaded free with the purchase of the federal product. You don't need to have internet access on your computer to use this software, but if you do, you can download updates as they are released, and you can file your return electronically. You can even have your refund automatically deposited to your bank account or have the taxes you owe deducted from your account. If you're not quite ready for these advances, you can still use tax software to print your return and mail it in. The cost of the software is even deductible.
You still need to gather together all the same information as if you were preparing your return manually or having a professional do it. The software will walk you step by step through the process, prompting you to enter amounts from your W2s, 1099s, etc. If you use Quicken for your finances, you can import that information directly into most tax software. At any time while entering data, you can switch to "form view" to see what that the actual form would look like with the data filled in. The amount of your refund or what you owe appears in the upper corner of the screen and changes as you enter new data.
As the TV commercials say, the software can suggest deductions that you might not have thought of. The calculations are guaranteed accurate, but you must still enter the correct data at the correct prompts in order to have an accurate return. If you forget to enter interest from a bank account, for example, you're still responsible for that error.
The version of the software you buy (basic, deluxe, or premier) depends on the complexity of your return. If you have a business or your finances are complicated to the point that you generally have an accountant do your books and prepare your return, the software could technically handle it, but you might not want to spend the time or effort entering all that data.
In 1997, our tax return was more complicated than usual with capital gains, child care credits, mortgage interest and property taxes on a house we sold and another we bought. After preparing all the forms on the computer, I showed the return to a colleague who teaches tax accounting. He indicated it would likely have cost $500 to have such a return prepared professionally.
By Carol Sabbar from the Kenosha News on 2-6-05