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TurboTax (and I presume all the other consumer software packages) can handle NY/NJ resident/non-resident scenarios, but the adjustments can be tricky and they aren't all well documented. More importantly, if you don't understand the underlying tax issues (in other words, what should the finished return look like) you run the risk of preparing your returns incorrectly.

What you might want to do is the following. Try using TurboTax online to prepare your 2000 return. Compare your results to the return your accountant prepared.


I haven't used the web version of TurboTax to prepare a two-state return, but from the feedback it gave me when I was preparing a one-state return, it appeared that it doesn't handle the two-state case very well. I think it's a billing issue rather than a real problem with the software -- they charge about $15 for the 1040 and about $10 for a state return, and they're only set up to do one state return per federal return. This might just be a limitation of the web version, and they might have it worked out by next year.

You don't have to pay for the web version unless you actually want to print or electronically file your return, so I agree with the recommendation to just give it a try. I've used TurboTax for the past 3 years (Windows version for 1998, web version for 1999 and 2000) and I've been mostly happy with it. My biggest complaint this year was that it couldn't figure out how much of a refund paid in 2000 for 1999 state income taxes was taxable, if the 1999 AGI was high enough to enter the deduction phaseout range. Pretty straightforward math, exactly the kind of thing a computer program should do so that a person doesn't have to, but TurboTax punted. At least it admitted its shortcoming and told me to consult IRS Pub 525.

My big gripe about TurboTax is the way it aggressively pushes electronic filing. In my opinion, someone who sells financial services, including financial software that gives advice, has an obligation to give advice in the customer's best interest, not his own. And paying extra to file electronically just doesn't make sense for most people. It's exactly equivalent to a "financial advisor" who makes money by selling insurance or investments rather than selling unbiased financial advice.
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