I have used TurboTax to file my family's tax returns for quite a few years; I do not know how long exactly, but at least ten years. It helpfully guides you through your return with questions like if you still live at the same address, have the same job and if your kids still live with you.
My wife purchased the Premier version this year for the first time instead of Deluxe. She thought that I needed it because of some stock trades that I made and our dividends and capital gains. Truth be told, I could have used Deluxe again but am grateful that she bought it, so I am not one to complain much about the extra $20 or so that this version costs.
TurboTax even asked if my son still attends the same college as last year and if he is still a full-time student who lives on campus in his second year. Yes, yes and yes. I typed in the info from the tax form that the college sent us, verifying that we paid about fourteen grand in tuition after his twenty-two thousand in scholarships. Of course, we paid about another twelve grand last year for room and board, just as we are this year.
I also like how TurboTax shows the comparison between the year that you are filing for and the previous year for comparison purposes.
I like other features, like the listing of deductions and credits, so you can compare them to last year's and make sure that you are not missing something.
I like the way it compares our itemized deductions as opposed to the standard deductions, noting once again that our best course of action is to itemize. Of course, as long as the new tax reform holds up, we should be in line to receive a larger return in the next few years once the standard deduction for married couples filing jointly increases from $12,700 to $24,000.
Without explaining every personal detail, it worked out so we would be getting a return of $240 this year. Before being credited with $2,500 from the American Opportunity program which equals 100% of the first $2,000 of a student's qualified education expenses plus 24% of the next $2,000, we were set to owe about $2,200.
The short version of why is that my wife gets taxed almost nothing on her part-time job, but earned about $7,600 of untaxed income. I earned just over $1,000 in eBook sales, also untaxed. We also added our daughter's taxable income to our return, which added another $436 to our debt. From her somewhat substantial holdings in the Wellington fund, every dollar of which I invested on her behalf, she made just a smidgen under $3,600 in dividends and capital gains.
For those of you who invest a decent amount for your children, their first $1,050 in income is tax-free, the next $1,050 is taxed at "their rate," or ten percent, which results in $105 in taxes being due. The income above $2,100 is taxed at the parents' rate, so the next $1,500 was taxed at twenty-two percent. This is all referred to as the "Kiddie Tax."
After I entered the amount of our daughter's dividends and capital gains, I watched the red shoot up from around $1,600 owed to about two thousand.
Ouch!
After filling everything out and checking it twice, TurboTax declared my Federal and State of Illinois returns accurate and A-okay.
I opted to file the Federal return electronically, like I have every year, and it was reported as accepted by the IRS just hours later.
How TurboTax tried to jam me is on my State of Illinois return.
Even though I have filed our Federal return electronically every time that I have used TurboTax, I have never filed our State return electronically. This was because, trying to be a Money Mensch, I refused to pay $19.99 for TurboTax to hit a "send" button automatically.
While I do not begrudge Intuit making many millions of dollars every year with their updated tax software and having all of our information in their files, I did begrudge the company an extra twenty bucks from us to file my State return.
Well, this year was different. I did not want to deal with printing out the return, attaching W-2's and other papers to it, mailing it out to Springfield, hoping that it does not get lost, ruined or stolen along the way, and then waiting weeks or months for this broke state to mail out our small return.
So, I opted to pay the extra twenty bucks so I would have an electronic receipt of our State return and would wait for the $270 or so to hit our account.
Well, what a surprise I had that TurboTax tacked on an extra forty dollar charge right before I was ready to hit the send button.
No notice of it before opting to file electronically either. Just there, raising their $20 fee to $60 right before you send it. They are so nice and helpful, too, that they will simply deduct it from your return and deposit it into their own account. How nice of them!
Looking at this, I see that the extra $39.99 that TurboTax attempted to swindle from me is titled a "Refund Processing Service Fee." Wow, what a great service, all at the low, low price of $39.99. And without a mention before the final submittal, too.
I went back about five pages, then opted to only file my Federal return for no fee. I will print and mail out our Illinois return and only pay for the cost of postage. Not even a $20 fee, which I would have paid them had they not been so sneaky as to tack on an extra $40 fee.
Will I still use TurboTax next year? Yes. Will I appreciate that I do not have to type in all the information about my family again? Yes. Will we get more money back in 2019 than this year? I hope so, but in some aspects, I hope not.
I hope so because our standard deduction will increase by quite a bit, giving our middle class family some much-needed tax relief.
I hope not because I would like to sell way more eBooks and perhaps launch an eCommerce business to make some additional income. I would rather make an extra fifty grand and pay the taxes on it than make an extra nothing and get a few hundred more bucks back.
Either way, I refuse to be hornswoggled by TurboTax.
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