Money Progress

Last year I used TurboTax Online to do my taxes.  They have a free edition that works well if you have a simple tax return.  I used them out of habit from helping my mother who uses the boxed TurboTax edition every year.  I was surprised that it was just as easy to use and as graphically friendly as what I was used to with the boxed copy.

This year my return is a bit more complex.  As I mentioned in my last post, I’ve had some losses in the stock market this year, some of which were in non-retirement accounts.  This means I get to claim short term capital gains losses!  Such a claim requires filling out a Schedule D form, which the TurboTax free edition doesn’t support.

As I was looking around for a fully functional free alternative I found TaxACT.  They have a free version that you can use online just like TurboTax, but that supports all the tax forms rather than a limited subset.  You have to put up with quite a few prompts to update to one of their paid versions but they are easy enough to skip by.  Overall the quality seems very similar to TurboTax.

I actually started my return with them a month or two ago but I couldn’t complete it as I had to wait for some straggling tax documents to come in the mail.  I logged back in last night to finish and ended up filing my return.  The whole process probably took me about two hours (including the time I spent a few months ago.)  Most of that time was just me tracking down my tax documents from various banks and investments.

As a result of filing I’ve now got an email in my inbox that says to expect my tax refund to be deposited into my account within 2-3 weeks!  The funny thing is that the money the government will be sending me isn’t really a tax refund, it’s my 2008 economic stimulus payment.  They mailed the checks based on 2007 returns, but I did not qualify then.  Since I do qualify based on my 2008 return, I now get the money.  Without it, I would have actually owed taxes since I try to keep my paycheck withholdings to a minimum so that I’m not overpaying taxes during the year.

There are probably other good alternatives out there besides TaxACT, but I felt like posting because it was a very painless and free process!  If you know of other free options that have full functionality and are easy to use, let me know!

You may have noticed that I didn’t mention anything about state income taxes.  This is because I live in the great state of Texas!  If you live in an inferior state (just kidding… you know us proud Texans) then you might have to do some more research on whether or not TaxACT’s state offerings are a good deal.  It looks like the cheapest you can get away with on their site is $14.

And now for one last snippet.  Did you know that only seven states don’t have an income tax?  I was very surprised when I looked it up.  I would have thought it was split more evenly.  I probably wouldn’t be so surprised if I grew up in a state with income tax, however.