Bankrate’s 2009 Tax Guide

I used Free File – it worked well, and I got my refund in about a week (via direct deposit).

I filed mine yesterday. We take ours to a CPA. I could do them myself and save some moeny but I started going to him because of one slightly complicated issue (partial ownership of a house in another state) and the fact that I was self employed and just wanted to make sure I did everything exactly right for that. Now I just find it a lot easier and less hassle to hand all the stuff off to someone else and get it back all finished in a week or two. To me it is worth the money I pay him still. If we ever get the out of state house sold then I will probably start doing the taxes myself again.

Submitted and refund received last week. I use TaxSlayer as it is free for military. I have to admit though, when a program gives me a large return (more than I payed in) I do go back and fill out the long form just to make sure the software isn’t doing anything strange that will get me slammed with fines. My taxes are easy, just my W-2 and the interest on my and my wife’s savings/checking accounts, so I always do them immediately after my W-2 and interest statement come available. This is also the first full year that I have mortgage interest to deduct so that was new. I don’t see my tax situation becoming more complicated until my girls are older and my wife goes back to work.

Writer’s Coin – if you’re going to an accountant that doesn’t understand foreign dividends, that is a big red flag.

(I’m a CPA.)

By the way, if you rely on advice from the IRS and are later penalized, you should be able to get those waived. Just make sure you keep a record of who you spoke to and when and what exactly he/she told you.

Thanks for putting all of the info in one place. I do my own taxes with Turbo Tax and I have never had a problem. My return is not very complicated and I refuse to pay the prices that some of the tax services are charging. I have not completed my return yet and this information will be very helpful.

Writer’s Coin – When I prepared taxes (I was an EA) I used to get all sorts of random questions from people who didn’t want to pay me to do their taxes, they just wanted free advice. When the questions were simple I answered them happily, when obscure or complex I figured they could hire me or find out for themselves. If you aren’t sure you’re doing the right thing, hire someone competent to do it for you. It’s cheaper in the long run to do it correctly now than try to explain it later in an audit.

And I forgot I wanted to mention that in many communities AARP, universities and community non-profits participate in an IRS sponsored program called VITA – Volunteer Income Tax Assistance. I’m a volunteer and we provide a free service to prepare tax returns, federal and state, for low income (under $42,000 for our program, I don’t think AARP has that limit) taxpayers. If your taxes are fairly simple and straightforward but you want a little help to make sure you get any credits and deductions right you should look for a program in your community.

J.D., maybe have a future post explaining the new $8,000 first-time home buyer credit that was recently passed with the stimulus plan. There’s much confusion as to who qualifies as a first-time home buyer, whether or not you have to pay back the money (you don’t), and how the program will work in general. Thanks!

Thanks J.D., for a wealth of tax info!

This is a bit off topic but did anyone look at the ad that shows up between the post and the comments (tarasaccounting)? Is it just me or is a lot of the text on the website kinda of fuzzy? They also have a youtube video on their homepage…I’m guessing the speaker is the person in charge. I have to give the person credit for having the courage to expose herself to an unknown audience but to be honest after watching the video (and the rest of the site), I think I would be less likely to trust them with my tax returns. Cheap, indeed!

J.D.–Thanks for this post. I’ve filed my taxes through TurboTax and am waiting for my nearly $7,000 return (both state and fed). I got nearly the same amount back in 2007 as well, so I attempted to decrease my husband’s withholdings this past year. The problem doesn’t seem to be with how much is withheld from his paycheck though–our mortgage is just so large and our property taxes so high. Do you (or anyone else) have any suggestions on how I should go about ensuring a smaller refund next year? I do everything else “right”–we save 10% in a 401(k), we contribute to 2 Roths, we have an emergency fund, etc., but this is my last holdout so to speak. My last remaining financial stupidity. I’d like to fix it if I could figure out what to do!

I filed mine this week and am expecting the refund deposit soon. I normally prefer to get a bit of a return back instead of needing to payout more money but this years was a little larger than anticipated.

Unfortunately, I don’t think I have a reasonable enough handle on my upcoming school costs to accurately change what I’m paying which may mean two more years of larger returns especially if I keep qualifying for that awesome lifetime learning credit.

I started them but got tripped up by a missing 1099-INT from an HSBC account I closed last year. Hope it comes soon, I don’t want to try to deal with their customer service again (apparently ex-customers aren’t entitled to service).

Just sent the forms off to our accountant…our taxes SHOULDN’T be complicated but my husband’s freelance writing business seems to mess us up. For the last four years, I’ve dutifully filled out what I THOUGHT was the right amount in taxact.com then compared the results with our accountant’s numbers. I’m never close. And we always get a refund (not too big), but it’s mostly because we have no clue how much DH will make.

JD,

Could you please do an article on tax with holding? When food and gas prices sky rocketed last Spring and my budget got too tight for my liking I took a weekend job. I worked till the last day of 2008 and with the money increased my emergency fund from 3 months to 6 months and paid off my car loan. Thinking nothing of it I filed my taxes last week and was surprised at the huge tax bill I now owe because my other employer did not with hold enough federal taxes. Please let other people know that you need to inform any secondary employers of your primary tax rate so that you do not owe a huge amount to Uncle Sam

I used TaxAct online and I used it last year. I like it. However, I am annoyed with the IRS extension to mail 1099′s this year. I could have my refund by now if I wasn’t still waiting around for Sharebuilder. My account just barely made them available for download – my wife’s account….still waiting.

I filed 2 weeks ago and have already gotten my federal (including the $7500 new homebuyer credit), state, and school district refunds. I hadn’t received a 1099 from my online savings account yet, but I checked their web site and it was available electronically.

I used TaxAct’s free e-file. My AGI is too high to use TurboTax free, but as far as I can tell, TaxAct doesn’t have a limit. TaxAct even lets you itemize deductions for free!

I’d love some advice on withholding for seasonal work. We always get a huge refund because my husband’s jobs that are only a few months long take out taxes as if they are 12-month positions. I’ve tried adjusting our withholding, but it isn’t enough to make up the difference.

If any of you people out there who are getting a return want to send some my way, it will help me cover what I owe. You are glad to get a raise mid year until you realize you didn’t withhold enough for the first half to cover your new tax bracket.

Doing your taxes is so much more fun when you know you are getting a little something back . . . I am doing mine in the next couple of days.

Thanks for the pointer to the list at Bankrate.com

My favorite tip is to not overpay capital gains on your mutual funds.

If you bought shares four years ago for $10,000 and sold them for $12,000, you might think that you owe $2,000 in capital gains. But remember that you’ve already paid tax on the capital gains distribution that happens at the end of every year. If you reinvest the cap gains and dividends then you should include them when calculating your basis.

If at the end of every year you paid tax on $1,000 of cap gains, then your basis is really $10,000 + 4($1,000) = $14,000, which means that you really have a capital loss of $2,000.

Losses may be a blow to the ego, but they do save you on taxes. And if you only lost 14% this year, you’re really not doing too badly.

Cheers.

Filed and federal refund already received…who knows when or if my Cali refund will ever get deposited. Between moving states last year and having, oh jeez, three jobs, my taxes were a little more complicated this year. And I’m a single girl who rents! I also don’t mind the big refund; it helped me save for an extremely comfy (and on sale!) couch for my sad little apartment that I’m currently lounging on. Since I’ve already budgeted around my take-home pay, I like to use my refund for something a little more fun. Which, for me, means having actual furniture in my living room. Hooray!