How My Tax Preparation Software Let Me Down

July 22, 2015

For the last seven years, I have used tax preparation software to help me file my federal and state income tax returns, and I’ve never had a problem…until now. You see, each year I’ve been entitled to tax refunds, and each year when the tax preparation software asks me if I want to have my tax refund directly deposited into my bank account, I would say yes, but this year was different. This year, instead of getting a tax refund from the state, I ended up owing the state more money, so instead of asking me if I wanted my tax refund directly deposited into my bank account the software asked me if I wanted to have my tax payment debited from my account.  Continue reading “How My Tax Preparation Software Let Me Down”

Garbage In, Garbage Out: The Problem With Tax Preparation Software

February 18, 2015

A couple of weeks ago, I received a desperate email from Alex who was using tax preparation software to help him prepare his tax return. It seems he thought he could avoid taxation on his 401(k) from his prior employer by rolling it directly into a Roth IRA.  While it’s true he could directly roll funds from his 401(k) to a Roth IRA, it is NOT true that this will avoid taxation. Only after-tax money may be deposited into a Roth IRA, therefore the amount rolled over—a sum of nearly $20,000—would be treated as taxable income for the year. Continue reading “Garbage In, Garbage Out: The Problem With Tax Preparation Software”

When To Hire a Tax Preparer

February 11, 2015

It’s February, and that usually means that you are ready for winter to be over, you are thinking about what to get that special someone for Valentine’s Day, and you can’t decide whether to do your own taxes or to let someone do your taxes for you. For years, taxpayers have been baffled by the federal income tax system and for good reason. The number of pages in the Wolters Kluher CCH Standard Tax Reporter reached 73,954 in 2013!  However, there’s probably only a handful of those pages that actually apply to the average taxpayer, while the rest of those pages are technical jargon, legalese, and other stuff that’s most irrelevant to you and me.  Continue reading “When To Hire a Tax Preparer”

5 Tips to Make Tax Time Less Taxing

January 12, 2015

If Christmas is the most wonderful time of year, why does it always have to be followed by its stressy and messy cousin “Tax Time.” Remember that New Year’s resolution to get your financial life in order? Well, it’s not too soon to start organizing the files, papers and “stuff” needed to do your taxes.   Continue reading “5 Tips to Make Tax Time Less Taxing”

5 Easy-to-Miss Tax Filing Mistakes

February 20, 2012

Whoops!  In preparing for this blog, I realized that I made one of the easy-to-miss tax filing mistakes I was going to alert you to!  I moved last year and was supposed to inform the IRS by filing form 8822.  If they sent paperwork during the year, I can’t just say, “I never got it – I moved!” That is a bit like saying, “My dog ate my homework” and will just not fly with the IRS.  I sure hope any statements were forwarded by my old post office.  Shoot. Continue reading “5 Easy-to-Miss Tax Filing Mistakes”