Do the "TurboTax" and "TaxCut" (etc.) programs really increase tax return amount?

Question

The reason being, tax season is upon us, and I have H&R Block's Basic TaxCut program. If it actually helps, I am willing to spend the $30 to get an increase on my tax return. If not, then I'll just stick to the program I have now.

I don't have much to file, only two W-2 forms and a couple of things to claim (Union dues, and donations). So if it won't make a big difference, then I won't spend the extra money. Also, is Quicken or H&R Block's program better?

Answer 1

Save yourself the thirty bucks and get freefile via the IRS, if you qualify.

The tax program I used this year screwed up to the tune of $1,650. Fortunately, I do taxes for a living so I spotted it and was able to override and correct both errors before filing.

Bostonianinmo is correct. Anyone who says they can get you a larger refund is breaking the law. would you want to do business with a company like that?

Answer 2

OK, let's clear up some terminology first.

A "return" is the form you file with the government that lists your income, exemptions, deductions, credits and taxes paid in and calculates your tax liability. Based on that information, you'll either get a refund or have a tax balance due. If you have a balance due, you must pay it by the filing deadline --- April 17, 2007 for tax year 2006. The Federal tax return is filed on Form 1040, 1040A or 1040EZ.

The reason that you'd want to use either tax prep software or a professional tax preparer is to minimize your tax liability. No software or tax preparer can guarantee you a refund, and it is illegal for anyone to claim that they can get you a refund. It's OK to claim that they can minimize your tax liability or guarantee that they will get you every deduction or favorable tax treatment allowed by law.

Now, do you NEED to spend the $30.00 or so for Tax Cut or Turbo Tax? Well, only you can answer that question. If you've never filed a tax return but are farily computer savvy as a computer user it will probably take you a LOT less time to install the software and prepare a simple return than it will take to read through all of the somewhat confusing instructions. They also do do a pretty good job of making sure that you get all of the deductions and credits that you're entitled to unless you're in a very unusual tax situation and have a highly complex tax return.

In your situation, you probably don't have enough itemized deductions to make it worthwhile to itemize. A single taxpayer automatically gets a standard deduction of $5,150 so unless your charitable donations and union dues are more than that, itemizing doesn't make sense for you. That's just one example of a simple tax item that the software can handle for you and get it right. If you didn't know about the standard deduction amount and didn't read the instructions carefully, you'd make an expensive mistake filing your return manually and itemizing your deductions.

There are other options for you as well. The IRS sponsors free e-filing services in partnership with a number of tax prep firms and their software packages. If your income is below a certain amount, generally $52,000 for 2006, you may be eligible to use one of the Free E-File services to prepare and file your Federal return. Most of them make a nominal charge to e-file your State tax return, typically around $10.00 or so. Check out this link for more information on the IRS Free E-File program and see if you are eligible: http://www.irs.gov/efile/article/0,,id=118986,00.html

As far as which tax software is best, there are no clear winners. Some say that Turbo Tax has a friendlier user interface though you couldn't prove it by me. Tax Cut is less expensive and is easier to override if you're an expert and don't like how they treat something in the program. For me, advantage to Tax Cut for price and flexibility.

Answer 3

Most of these programs are about the same but they are very accurate. For fairly straight forward tax returns with few deductions it just won't make much of a difference which one you use. If you have a more complicated return, business expenses, mortgage interest deductions, home office, children, ect, ect, then it might be wise to spend $100 on a good accountant to maximize your refund, assuming you are due one.
As far as Quicken and H&R's programs, you just can't go wrong, they are both excellent and it is unlikely that either one will catch something the other didn't. Its a toss up.
I hope this helps.

Answer 4

Usually Tax Cut and Turbo Tax miss deductions and decrease your refund not raise it. Second if you only have a couple of W-2's then you will not be deducting the union dues and donations to charity. Third, save yourself the 30 bucks and go to IRS.GOV and use a free file program for 2 W-2's.

Answer 5

It will not make any difference in the tax refund if you are using basic 1040 tax form. You even need not spend any money in tax preparation and filing as there are many free filing options available. One of them is free file alliance from irs website. If your income is less than 52K you can link to any one of the software and file your taxes free.
You can read reviews of more than 50 tax softwares at http://www.bestonlinetaxpreparation.com/taxsoftware/Individual-Tax-Software.html and you can choose the one you like.
Better one is TaxAct which offere free tax filing for all without any limits. You can check them out at
http://www.bestonlinetaxpreparation.com/products/taxact.html