Hopefully by now you’ve read my previous blog where I discussed some common tax misconceptions. As a reminder, I am NOT a CPA or an Enrolled Agent, so I can’t do your taxes for you or represent you. But I can help guide you and explain things along the way. If there’s any more tax questions you wish I went over, shoot me an email or comment on my Instagram post and I’ll try to answer it to the best of my ability. In the meantime, I’m out to prove to you that I really am different than any other CFP professional you’ve ever talked to. My two biggest selling points are that I care and that I’m open and honest, so let me tell you exactly how I do my own taxes…
I file my family’s taxes myself and I use the website www.FreeTaxUSA.com. I said in my last blog post that we don’t itemize and that’s true. I used to itemize before the Tax Cuts and Jobs Act (TCJA) of 2017, but that Act effectively doubled the standard deduction for individuals and married couples. But that’s a story for another day, back to how I file our family’s taxes…
I used to use TurboTax (TT) back from 2010 to about 2018? That’s when TT started jacking up their prices and when I learned how much TT advocates against simplifying the US tax code. They spend millions to keep the status quo all while telling you how EASY they’ve made filing your taxes. In reality, our taxes could be a lot easier if they didn’t spend millions lobbying against tax reform. TT also nickel and dime you for lots of services despite advertising that many users can file for free. FreeTaxUSA doesn’t charge me for my (slightly complicated) Federal return and it only costs $15 for my Maryland return. TT would have charged me over $169 for federal and $45 for state. In fact, you can’t even find TT’s prices for state filings unless you create an account and begin to upload your information!
Years ago, TurboTax had the nicest and easiest interface to use but today most tax software companies have caught up. I’m not saying you have to use FreeTaxUSA; there are a handful of other options and companies. But to the best of my knowledge each one of them is cheaper and has better ethics than TT. And full disclosure: I could have saved myself the $15 and filed my Maryland state taxes on our state’s website… for free! I chose to file it with FreeTaxUSA because the $15 charge is worth my time savings of not having to re-enter all my info on a state website and double check to make sure my return matches. Plus, I like having my state and federal filings all in one place where I can compare them to prior years.
So, here’s the BIG CATCH: if you’re a TurboTax user and you want to switch to save yourself $150+, you gotta actually bite the bullet and make the switch at some point. You have to sit down, commit an hour or two to opening an account with (say, FreeTaxUSA) and actually setup your return on a new website. One way to do this and know that you haven’t screwed up is to enter your information into both TT and your new tax software. Yes, this will take more time but once both returns match each other, you’ll be able to file your taxes on FreeTaxUSA, save $100-200, and then not file in TT. For people who become comprehensive financial planning clients of mine, I can help you with this seemingly difficult transition. I can help guide you so that doing your taxes are no longer a pain point. And while switching things over, let’s talk about the best ways to minimize how much tax you have to pay.
Finally, everyone should be doing a mid-year tax assessment on their and their partner’s paystubs. It takes half an hour and can tell you if you’re on track to owe or be owed a refund. Of course, if you’re already a client of mine by July 2024, I’ll be doing that for you, simply sending you the results, and helping you adjust your W-4 if needed.
If you do decide to use TT, that’s fine I don’t judge, but if you’re looking to switch feel free to ask me about it and I’d be happy to go into depth more. And as always, go ahead and schedule that free 30 minute call with me even if it’s just to pick my brain on when TurboTax personally hurt me! Because TurboTax definitely hurt me in the past and I’m still not over it.
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