Last-minute Tax Advice

I just finished filing my Federal and State Income Taxes for 2007. Oh, what singular joy.

I filed much later than usual this year. Due to some one-time income, I actually owed money instead of getting a refund this year, for the first time. While paying taxes is never fun, and paying more at tax time is even worse, this year’s tax-paying event was even worse than I anticipated, thanks to Turbo Tax.

I have been using Turbo Tax since at least 1997; possibly longer, but those are the oldest returns files I have. I used the PC version until a few years ago when I decommissioned my old Windows desktop, and I have used the Mac version since. I have always had a good experience with the program, and have recommended it to friends and family.

I cannot recommend the 2007 tax year version without reservations (I used the “Deluxe” version). The entire process felt less polished than in years past. There were a number of forms that I had to hunt down in “Forms Mode” because “Interview Mode” did not ask the right questions, or ignored some possibilities. There were a number of areas where questions were asked that I did not understand; unlike in previous years, the integrated help often did not explain the question thoroughly.

Admittedly, part of the issue may be that I owed taxes this year, and in general had a few details in my return that I haven’t dealt with before. It is possible that the overall quality has not changes, only that I have not used the parts of the program which are less polished in the past due to my filing situation. For example, I had to pay Alternative Minimum Tax this year (which is a whole ‘nother rant); the help and interview questions for the AMT were by far the worst I’ve seen in Turbo Tax. Maybe they have always sucked; I’ve not seen them before. Whatever the reason, the perceived quality of the product was much lower this year than in years past.

Ah, but I promised advice. If you have not completed and filed your returns, and if you are using Turbo Tax, I strongly recommend that you use the “Print for Review” option which is offered just before you finish e-filing. Review the printed pages (and there will be many) carefully. This may seem obvious, but don’t forget this step. You may find something that you didn’t see while using the program. I certainly did… based on my unusually high (one-time!) income, Turbo Tax was going to tell the IRS that I would be making estimated 2008 tax payments of over $3000, four times this year, on top of my paycheck withholding. Fortunately, I caught this when I printed, before I filed, and found the correct section of the interview to fix it. Apparently, the interview originally asked if I wanted to make estimated payments, and when I said no, it ran its own calculations and signed me up.