Thursday, January 27, 2011

Tax Time

Taxes. I'm too cheap to have someone else doing them--plus, since we're dirt poor, companies offer us free tax software through

I calculated taxes without the software, and then used the software and found that I was off by $1000 for my return. So I heartily recommend the software, if just because it may catch things you miss (or mistakenly believe you aren't eligible for).

At the same time, however, the software isn't perfect. I reworked my taxes and found that if I decreased my return by $4, I could also significantly decrease my AGI, which is used to calculate state taxes. Yes, I don't get as much back with the feds, but I end up paying significantly less state tax. I haven't figured out the savings yet, but it's fairly significant. If you have the ability to choose between two options when doing taxes, you might want to run both options and consider state taxes into the mix. Don't trust the software completely.

Don't forget Schedule M this year, and, if you have kids, the EIC, the child tax credit, and the additional child tax credit. Also, don't forget you can take both the exemption and the standard (or itemized) deduction. Here's hoping you have a good tax return.


Jenni said...

Ive been using for five years now. It used to be free to file the federal (and like $10 to file the state form) but now I think it's $12 to file everything... which, I know there are ways and places to do it for free, but I'm ok with paying their fee because the system remembers my information from year to year, so if my family info, or employer, or anything else stays the same from one year to the next (as much of it does of course) then I can just check it over, I don't have to re-enter it all. I sure appreciate that. And of course they will do the direct deposit for us... Between those two it's worth the few $ to me.

mr.brighton said...

Doing your own taxes is a good idea in part because you then learn how to save yourself from paying additional taxes throughout the next year.

Tim said...

Just found out that, because of one of the forms I'm planning on filling out, I can't send in my taxes until mid to late February. Yuck. Guess we'll have to somehow make due with the little money we have until then.

Katrina said...

Amen! We need a good tax return. (Last year's got us moved back across the country, but this year we need it for other important things.) Thanks for the tips.

Brentwell said...

Already filed and already received our return. I love free online TurboTax.