I Did My Taxes Three Times for You

I promised everyone here a post about taxes today, and here it is!

I have been using TurboTax for most of my tax-paying life, but decided to try out two other popular online tax programs — TaxACT and H&R Block at Home — to see if they were, A) easier to use, and B) better at calculating what I owed the government. Doing my taxes three times was totally boring and painful, but you know it’s true, everything I do, I do it for you. But I am actually really glad I did this, because the programs calculated different figures, and the differences in the calculations were actually a lot.

Before I talk about the programs, a quick rundown of my tax situation: I had a full-time job for all of 2011, so I have a W-2 form from my old company. I also did some freelancing on the side, so I have several 1099-MISC forms. I paid a little more than $2,000 in qualified student loan interest, all of which is deductible and reported on a 1098-E form. I also contributed to a retirement account, and that money is also deductible.

My situation isn’t too complicated (no spouse, kids or mortgage) so I didn’t need to pay for the “deluxe” version of any of the programs I used, which were:

TurboTax
$34.95 for Federal Basic
$39.95 for State

TaxACT
$17.95 for both Deluxe Federal and State

H&R Block At Home
$34.95 for Federal Basic
$39.95 for State

The winner of the three? TurboTax. TurboTax all the way!

So, let’s start with the worst, which was TaxACT. There’s a reason why TaxAct is the cheapest of the three: The user experience sucks. It’s a pain to go back and edit information. It wasn’t clear about what I was supposed to do with my 1099-MISC forms. It doesn’t provide too much guidance. I’d only recommend this program to someone if they had a really simple tax situation, or if you’re willing to get annoyed every now and then to save the $57 you’d spend using one of the other programs. I actually didn’t finish using this program because I was too annoyed with it. Doing your taxes should be as painless as possible. This made it more painful.

H&R Block At Home is wonderful. The step-by-step guide makes it so any idiot can do his or her taxes. I actually really liked the interface more than TurboTax! It actually made me feel calm and relaxed throughout the entire process, which just took about an hour or so. After so many years of being a loyal TurboTax user, I would have chosen H&R Block At Home as my favorite of them all, but one thing prevented me from doing so: It told me I owed $861 in federal taxes, and $177 in state taxes.

When I used TurboTax, which is totally solid and familiar, it calculated that I owed $177 in state taxes, but $699 in federal taxes — a $162 difference. And although I don’t mind paying taxes — nay, actually like paying taxes — I filed my taxes using TurboTax to save myself $162. I’m a firm believer in paying every cent that I owe, but, no more, no less.

If there’s one thing I’ve learned from doing this, it’s that it pays to do your taxes more than once — or it can save, at least.

[Ed. Note: TurboTax has sponsored things Logan and I have written before, but have nothing to do with this post. They just happened to end up as the program that saved me the most money.]

Photo Credit: Flickr/Photo Farmer

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