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Author: CatsMeow One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: Purpose of tax software programs? Date: 2/12/1999 10:31 AM
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I have gone back to October and read through posts relevant to tax software programs.

I have learned two things: it will not calculate cost basis and it costs $9.95 to do an e-file (with Turbo Tax).

Two questions: Can I dodge the $9.95 by printing the completed forms and mailing them myself? What is the appeal of using tax software programs?

It seems to me that I still have to do the work on my own just to input data.

I have always filed my tax returns. This year I am feeling a bit leery about doing this because I sold two of my mutual funds. Cost basis calculating sounds a bit tricky, although I do have tax tips from the mutual fund companies and the MF Tax Investment book.

- Cat's Meow
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Author: TheBadger Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10055 of 121572
Subject: Re: Purpose of tax software programs? Date: 2/12/1999 11:07 AM
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You wrote:

I have learned two things: it will not calculate cost basis and it costs $9.95 to do an e-file (with Turbo Tax).

Correct, TurboTax will not compute your basis. I have always found it easier to keep a running Lotus/Excel spreadsheet throughout the year, so that come tax time, I sort & print the spreadsheet & all the data is at hand.

Two questions: Can I dodge the $9.95 by printing the completed forms and mailing them myself? What is the appeal of using tax software programs?

Yes; no need to pay the $9.95; $.33 should do it.

IMHO, there are multiple appeals to TurboTax (& others)

1. You can link Quicken / Quickbooks to TT via an import that will complete 50% to 95% of the return automatically.

2. TT math is typically flawless.

3. TT stakes their reputation on getting the tax code & tax law correct. As a result, their "Easystep" set of questions & prompts are a bit of an insurance mechanism to make sure that the preparer gets it right. Further, for those of us that prepare multiple returns, TT provides a bit of a refresher and annual changes in areas of tax law which are infrequently visited.

4. TT prints all the forms (beats stocking a supply & completing by hand)

5. TT prints a lot of support schedules (not filed with the return); e.g. the carryforward schedule is particularly helpful.


It seems to me that I still have to do the work on my own just to input data.

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Author: BookmFool Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10057 of 121572
Subject: Re: Purpose of tax software programs? Date: 2/12/1999 11:15 AM
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Good morning cat's meow,

I can only answer part of your question. If you want to avoid paying the $9.95 to e-file your return, buy TaxCut. It costs about $10, but it has enclosed a $9.95 rebate for the 1st e-filed return, so all you really pay for is the program itself.

Of course. if you already bought theTurbo Tax, then It won't help to buy another tax program, would it. Sorry.

To most people, the appeal of using tax software is that it gives them another reason to cuddle up with their computer.I guess most of us need to get a life, huh?
Rick

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Author: IndecisiveFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10074 of 121572
Subject: Re: Purpose of tax software programs? Date: 2/12/1999 2:33 PM
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It seems to me that I still have to do the work on my own just to input data.

Don't be discouraged about all the data entry. The first year using TurboTax required quite a bit of work entering the data. But the second year, you can import the previous year's return. Then on many items you just have to entry the new numerical data. I finished my return in less than one hour this year.

..IF

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Author: alglen One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10077 of 121572
Subject: Re: Purpose of tax software programs? Date: 2/12/1999 3:20 PM
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TT was a time saver for me.

This year I did my return in about 1.5 hours. last year it took me about 10 hours over days.

Also TT checks all the worksheets that you never knew about.. Alt min tax, child credit, tax on savings bonds, all sorts of stuff I'd spent hours researching, checking, and double checking.

Also, TT saved a number of trips to the library to copy forms and many hours on the internet downloading forms.

definitely worth the $20.
ag

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Author: DylanFan One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10094 of 121572
Subject: Re: Purpose of tax software programs? Date: 2/12/1999 6:19 PM
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<<< Two questions: Can I dodge the $9.95 by printing the completed forms and mailing them myself? What is the appeal of using tax software programs? >>>

I had similar questions when I first started using Turbo Tax eight years ago. The answer to the first question is "Yes" (the $9.95 is a fee for filing electronically only).

To address the second question, the appeal of tax software is to lend assistance when filing a relatively complicated return. The software package usually has some sort of interview process that helps you identify deductions, necessary forms, etc. that you may have missed otherwise.

I started to use tax software when I bought my house, i.e. when I started itemizing deductions rather than taking the standard deduction. YMMV.




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Author: rjm1 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10112 of 121572
Subject: Re: Purpose of tax software programs? Date: 2/13/1999 12:26 PM
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What is the
appeal of using tax software programs?


You will do a better job of getting the return correct (if you follow the instructions)than doing it manualy.

Note, I think Turbo Tax and Tax Cut let you do free returns if your income is low or use a 1040ez. Might want to check their sites.

Call your mutual fund, they maybe able to tell you the costs basis.

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10208 of 121572
Subject: Re: Purpose of tax software programs? Date: 2/15/1999 3:27 AM
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[[Two questions: Can I dodge the $9.95 by printing the completed forms and
mailing them myself?]]

Sure...no problem there. It's what millions and millions of people do each year.

[[ What is the appeal of using tax software programs? ]]

It certainly checks you math. It may also give you hints on various tax issues. But if you don't know the law behind the "fill in the blanks" in the tax software, the return won't be worth much. It'll look nice, and be arithmetically correct, but might not be worth a damn if the law is not interpreted correctly.

They sure make taxes "look" easy to do. But if you look back and see how many people don't know how to complete Form 8606, you'll understand that you must know the law before you can fill out the form.

[[ It seems to me that I still have to do the work on my own just to input data.]]

Sure...but it certainly is a lot cleaner, easier, and faster...especially with a bit more complicated return. If you are talking Form 1040EZ or 1040A, then doing it by hand (or telefile) is now big deal. But with more complicated returns, it really is a time saver.

[[ I have always filed my tax returns. This year I am feeling a bit leery about doing
this because I sold two of my mutual funds. Cost basis calculating sounds a bit
tricky, although I do have tax tips from the mutual fund companies and the MF
Tax Investment book.]]

And the key is that you MUST be comfortable with the law for the tax programs to really do you any good. Don't do anything by computer that you can't do by hand. Just use the computer software as a tool to ease your burden...not to answer your questions.

TMF Taxes
Roy

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