Tax Software, Accountant or DIY? …

… Your choice can be the difference between a maximum tax refund and a non optimal refund; a fast refund versus a wait of weeks to months.

I know that sounds a bit severe, so bear with me – but if you are an SEO, and you work as a sole proprietor or own a small unincorporated or incorporated business, you may be interested in your options. I really didn’t know an awful lot about having to file my own taxes – let’s be honest, in the UK they did it for me. A right babe-in-the-woods was I, and a somewhat horrified babe-in-the-woods at that.

So, the first year we tried H&R Block (not the software – in person). The fellow was very helpful, but they made a complete mess of my child care payments, and ultimately we were out of pocket to the tune of over $3,000 for 4 months – we finally got our full refund in late June. I later found out that there were other deductibles we could have claimed, but weren’t aware of, nor were we made aware of them; and we paid around $80 each for the privilege.

Second year, we tried an accountant who was recommended by a friend. We worked pretty hard to get all the paper work we thought we needed together for the accountant, diligently sent it off along with a check for over $100. The accountant sent back completed forms about 2 weeks later, which we then had to file offline. We finally got our refund around mid-May, and again found that we had missed some potential deductions.

For 2008 taxes (due this year) we were going to use the accountant again. Personally despite my willingness to try anything and everything new online and in my field of work, I am remarkably reluctant to change anything in my personal life – I have a comfort zone I like to keep relatively well padded.

Some brief history as an explanatory note here:

In January I was offered an outstanding opportunity to work at Intuit. One of their products is a tax software product called TurboTax. I really knew very little about it. Despite the free offer to employees to try and use the product for free, I was reluctant due to my total lack of how tax returns work, my previous dependence on others to do them for me, my dislike of change, and my wariness of anything that requires my personal details shared to such an extent – which is downright silly as I’m on FaceBook, LinkedIn and Twitter and do most of my banking online… go figure.

There was one tag-line that hooked me and made me make the switch to actually try the software… not necessarily finish my taxes with it, or file with it, but at least give it a go. They promised to ‘maximize my tax refund’ and they guaranteed it.

So I tried it. The version I was given was TurboTax Premier (desktop download).

I managed to prepare and then file (yes I did) our tax returns within an hour. The software allowed us (me & hubby) to do it simultaneously – the forms just switched from one to the other smoothly. At the end we were given the choice of filing with NETFILE or printing (incidentally, with TurboTax online products you don’t pay anything at all until you file or print). We chose NETFILE. We were told our refund was $5,300 (roughly) – they gave us the exact figure, I disremember the exact amount – and with NETFILE we would get our return in as little as 8 days. It’s been 5 so far. I’ll update this post the minute we get it.

I did actually have a question about charitable deductions and I emailed the 24/7 support line – they got back to me same evening with a very clear answer.

The software is not perfect, but it is a close second and getting better every year. It is very intuitive (no pun intended), I found it very easy to use, quick, investigative and thorough. I can honestly say that if it wasn’t free, I probably would not have tried it, being me – and I would have missed out on a thoroughly revolutionary way of getting my taxes done – fast and with a REAL fast refund J

Now, as I have actually tried the product, I don’t feel at all abashed at mentioning some tid-bits about TurboTax. The same (pretty much) applies to US TurboTax which I encourage you to review if you want to get your taxes done fast in the States, with a maximum refund and audit defence.

TurboTax online versions are less expensive, but also allow only one return per product; preparation is free, you only pay when you print or file online.

• TurboTax Free Online really is free – there is no upper income limit, but it is for very simple tax returns (T4s etc)
• TurboTax Student Online is free for students, but there is an income limit
• TurboTax Standard is $16.99 for the online version per return for slightly more involved taxes
• TurboTax Premier is $29.99 for the online version per return for even more involved taxes including rental & investments income
• TurboTax Home and Business starts at $39.99 and is ideal for unincorporated home based businesses, sole proprietors and contractors.

TurboTax Download or CD versions allow up to 8 returns each, and are therefore more expensive

• TurboTax Basic is for pretty simple taxes and is $19.99
• TurboTax Standard is the download/CD equivalent of the online version and is $39.99
• TurboTax Premier is the download/CD equivalent of the online version and is $69.99
• TurboTax 20 is for multiple tax returns – great for families
• TurboTax Home and Business is easy software for personal and small business taxes for $99.99
• TurboTax Suite gives you Quicken Home and Business ($109.99) and TurboTax Premier (69.99) in a bundle for $109.99

Other TurboTax offers, services and add-ons:

• TurboTax Software Reviews – independent customer reviews via BazaarVoice plug-in
• If you’re reluctant to invest time in preparing free with online, or investing money in a download or CD version, you can try their Tax Calculator for free anytime online.
• Audit defence is an add-on to help you avoid the hassle of a CRA audit at $39.99 per return.

Closing Note

We’re looking forward to our refund, especially as the economic crisis is making everyone a little more hasty in attempting to get everything they can due them back in their hands as soon as possible – or at least we are.

I hated tax season because I hated the hassle of figuring out who, how, when and where to sort out our taxes. I am so glad I was given the opportunity to try TurboTax free. I would, in a heart-beat, buy it if it was not an employee perk going forward.

May I wish you happy tax season, this year and in the future, and may you find your tax preparation and filing nirvana as we have found ours – both for your personal taxes and for your small SEO business – in Canada and the US. J

In the spirit of this post, please accept my disclaimer; nothing I say here may or should be attached to any employer, current or previous. This is my personal blog. The views expressed on this page are mine alone and not those of my employer.