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TurboTax 2012 Online Review

This article was written by Flexo in Reviews, Software, Taxes. 62 comments.

This is a relatively long review of TurboTax 2012 Online, software for completing tax forms and submitting them to both the federal and state authorities. I’ve updated the review to reflect the changes to the software in 2012 (for filing 2011 tax returns).

Recently, the IRS began accepting federal tax returned filed electronically. Even before the IRS began accepting returns, you could still have completed your tax forms online through software. Programs like TurboTax, H&R Block, and Jackson Hewitt have been accepting customers and holding off on filing until now. This delay affected those who had itemized deductions, claimed the tuition and fees deduction, or claimed the sales tax deduction.

Many taxpayers are just getting started with their 2011 federal returns now. I’ve been using the services of an accountant for the past few years, and he was able to cut through the more confusing tax consequences of owning a business, saving me $15,000. Before my tax situation was complicated, however, I completed my taxes online using various software. Following a series of questions, completing and filing my 1040 form was easy.

Every year, the companies that provide tax e-filing services like TurboTax and H&R Block tweak their products, not only for the latest tax laws, but to improve features, making the process of tax filing easier. I took a look at TurboTax to see what changes the newest edition has to offer.

The first thing I noticed with TurboTax is the wide variety of products they have available. There is an option that is completely free for filing federal returns, but it is limited. This free version is for taxpayers whose returns can be completed using the 1040-EZ form, a simplified version of the 1040 form. If you have deductions, investments, a mortgage, or self-employment income, or if you want a step-by-step hand-holding guide to completing the forms, you will not be able to take advantage of the TurboTax Free Edition.

TurboTax offers several flavors in addition to the Free Edition, including Deluxe, Premier, Home & Business, and Business, each to handling more complicated tax situations above and beyond the lighter editions. The Deluxe Edition focuses on capturing all of your deductions. The Premier Edition does deductions, as well, but also includes the forms you need for investments like stocks, mutual funds, and rental properties. Home & Business covers all of the above as well as self-employment income, and the Business Edition is for anyone who is a partner in or owner of a corporation.

The editions are flexible; start with the Deluxe Edition, and as you come across features you need, TurboTax will ask if you’d like to upgrade — without charging you yet — to the edition that takes all of your needs into account. I started the Deluxe Edition to see how far I could go. I saw that for the most part none of the upgrades are needed if you are confident about your tax accounting abilities and are willing to enter your information directly into forms rather than have the software hold your hand through every decision.

Get your refund in as little as 8 days. E-file with TurboTax today. It’s Easy

Here is an overview of my entire process of completing my federal and state tax returns with TurboTax.

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Kodak Files for Bankruptcy

This article was written by Flexo in Investing. 6 comments.

There were rumors and predictions for a while, but today it’s official. Kodak, the company that revolutionized film photography and adopted digital photography early, has declared bankruptcy. The company has been struggling since the 1980s; I’m surprised it survived this long without filing Chapter 11.

Kodak Portra That’s what the company chose to do today, with debt adding up to $6.75 billion.

I’ve been a fan of photography for many years, and I’ve begun taking this interest more seriously in the past few. I’ve taken a number of eight-week photography classes offered by a local arts organization, and the classes have been helping me improve my art. They have also inspired an interest in old-fashioned film photography. While I still use digital cameras (mostly a Canon 1D3, purchased used), I also use a Mamiya RZ67 Pro II medium format film camera, also purchased used. Just in the last month, I decided it would be more frugal and more fun to develop black-and-white film myself instead of spending the money to a professional lab nearby.

Despite owning all the equipment I have — in addition to various cameras I have studio equipment like lights and backdrops — my struggle is to find the time to focus on photography.

While Kodak will continue to operate during the company’s Chapter 11 reorganization, the future of some of the best Kodak products is uncertain. There is no great alternative for photographers who like using Ektar and Portra color film and Tri-X black-and-white film; competitors’ products, like those produced by Fuji or Ilford are different. Now could be a great time to stock up on Kodak film; if it becomes difficult to purchase, the value could increase. Film has a short shelf-life, but many photographers are fine with purchasing expired film.

CNN

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Podcast 143: Tax Law Changes in 2012

This article was written by Flexo in Podcast. 3 comments.

Today on the Consumerism Commentary Podcast, Bryan J Busch talks to Kathy Pickering, Executive Director of H&R Block’s Tax Institute.

They discuss the difference between smart investments vs. emotional decisions, the importance of financial planning, and how most people are better off just buying an index fund and ignoring investment gurus.

Consumerism Commentary Podcast
Tax Law Changes in 2012: S06E13 / 169

Download – RSS – iTunes

[00:00] Introduction from Bryan J Busch
[00:34] Interview with Kathy Pickering
– [00:48] Do an annual review of life changes
– [01:26] Extending the Payroll Tax Holiday
– [02:43] Federally declared disasters and casualty losses
– [04:39] Energy efficiency credit (check the list at energystar.gov)
– [05:51] American Opportunity Credit for college students, tuition and fees deductions, and the Lifetime Learning Credit
– [08:16] Tax credits for adoption
– [11:10] Credit for some plug-in cars
– [12:10] Brokers are now required to report cost basis of the sale of stocks and securities
– [12:59] Health care reform affects on individual and small business taxes
– [17:59] Expired hiring credits
– [18:55] Changes to be aware of for 2013
– [21:31] E-filing is heavily encouraged and improved
[23:56] End

We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.

Theme music by Mindcube.

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Home Mortgage Interest Deduction

This article was written by Flexo in Featured, Real Estate and Home, Taxes. 60 comments.

Although the home mortgage interest deduction is one of the most oft-cited benefits of owning a home, most taxpayers don’t take advantage of it because it requires itemizing taxes. If itemized deductions including mortgage interest paid throughout the year exceed the standard deduction, a taxpayer can take advantage of the benefit.

The benefit isn’t as great as it sounds. If you pay interest, it certainly does help to get a tax benefit, but it rarely tips the balance of the long-term financial effects of renting vs. buying a house. Don’t let the real estate industry sway your opinion about owning a house through this faulty rationale. And certainly don’t decide to take out a mortgage if you were intending to buy with cash. Since this is a deduction, your taxes are reduced by only a percentage of the interest you pay, related to your tax bracket.

The home mortgage interest deduction is currently endangered. The Obama administration and Congress are looking for ways to cut spending, and this tax deduction is on the table for consideration. Some estimated put the cost of this deduction at $100 billion each year.

Despite the cost and its overstated effects, the tax deduction has helped convince renters to become homeowners — at least among people I have spoken with. In other words, for the cost of $100 billion, the economy has seen the benefit of a growing real estate market for many years. This law has made the National Association of Realtors, a lobbying group for the real estate industry, very happy, and they are working hard to prevent the government from eliminating the tax deduction.

There are many rules that determine whether you can claim the interest you pay on your mortgage for a tax deduction. The rules help ensure that the benefit goes to home owners rather than “investors” who earn a living from flipping houses, though due to market conditions the past few years, that activity has been less of an issue.

The interest you pay for construction, purchasing or improving your primary or secondary home, whether through a mortgage, home equity loan, or home equity line of credit, qualifies. There are limitations, though. You can deduct interest paid on up to only $1,000,000 of home acquisition debt. For home equity debt, which is any loan that was taken not to construct, purchase, or improve a house, you can deduct interest paid on up to only $500,000 of this debt or the fair market value of the home, whichever is less. For taxpayers who are married, filing separately, each of these limits is reduced by half.

Normally, the total of all of your itemized deductions are limited by income, but that income limitation was lifted in 2010. It could be lifted again if the benefit is not eliminated.

Question for homeowners: Do you take the home mortgage interest deduction? Question for everyone: Should this deduction be eliminated for the sake of reducing the national budget deficit?

Photo: Wonderlane

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Binding Arbitration: Wells Fargo Taking Away Customers’ Rights

by Flexo

If you enter into an agreement with a company, and that company does something to wrong you, most of the time you can avail yourself of the American judicial system to correct the problem. This happens frequently, with both individual lawsuits and class action lawsuits. For example, Bank of America is dealing with several lawsuits ... Continue reading this article…

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American Airlines Files for Bankruptcy

by Flexo

One of the two major airlines that had not yet filed for bankruptcy or restructuring, American Airlines, gave in and filed for Chapter 11 protection today. The airline will continue to operate its business as usual; if you planned to fly American Airlines, you’ll still be able to do so without any problem. In fact, ... Continue reading this article…

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Should Hedge Funds Receive Special Treatment?

by Flexo

The Security and Exchange Commission (SEC) has advised the managers of super-secret hedge funds, investments of the most wealthy, that they will soon need to disclose more information to the regulators. Highly leveraged hedge funds contributed to the economic collapse, but the pressure to increase oversight has been mostly ignored by the industry. In response ... Continue reading this article…

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401(k) Contribution Limits for 2012

by Flexo

Thanks to inflation, the maximum amount of money you may contribute to your 401(k) in 2012 will change. This applies to 403(b) accounts, as well. For 2009, 2010, and 2011, the maximum you may designate to your 401(k), not including your employer’s matching contributions, was $16,500, but in 2012, this will finally increase to $17,000. ... Continue reading this article…

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