By Martin Jansen, Owner of Jansen-PCINFO
Most employers and financial institutions have to have their documentation sent out by January 31st of the following year. So many of us will have our W-2s and 1099s for 2021 sent to us soon. Other documentation can be found online – indeed, you and I may be able to get a jump on your tax preparation by downloading all tax documents without waiting for the ‘snail mail’ versions.
Of course, once all the tax documents are gathered, we need to have a method to organize the documents for tax preparation. Our family uses two Expanding Organizer File Folders. One for the current year and one for the next. During the year we put all tax related documents in these folders broken out by category. I don’t think putting all documents in a shoebox (tax related or not) is the way to go.
For the past several years we have been relying on a tax preparation firm to file for our taxes. His prices were reasonable and we didn’t have any complaints. Late last year our guy, Joe, decided to retire. In researching other firms, I found that CPA firms want at least $250 to process and file taxes. Our tax picture is not complicated, and being cheap, that is too much money. Joe only charged $110 in his last year.
Prior to Joe, for many years I used TaxAct.com to prepare and file taxes. In fact, I used tax prep software long before it was fashionable or easy to do. I have electronic files going back to 1995. This was back when software manufacturers basically had electronic versions of the tax forms on the screen. No gentle questioning and graphical guidance, just the raw form and you type in all information.
In my search for good tax software for 2021, I am going to focus on web based options. I am running Linux Mint on most of my computers, so Windows software will not work. This knocks out Intuit’s TurboTax on CD or Download for PC and MAC. It also knocks out H&R Block’s software. While both of these offer Federal and State taxes, H&R Block is $10 less.
I would go back to TaxAct.com, but the cost has gone up significantly over the last couple of years. TaxAct is charging $40 for the state return. As with most online software, a zero dollar return for Federal returns is available, but the cost quickly grows as you add more forms like a Schedule C for a small business or Schedule D for capital gains or losses.
Cash App Taxes (formerly known as Credit Karma Tax) is a completely free option for both Federal and State filing. It is sort of the DIY method of filing your taxes. It does not cover Married Filing Separately for Wisconsin taxes. I’m not considering this software for filing our taxes.
I’m strongly considering e-file.com for my tax software this year. The cost would be $21 for the Federal (with coupon code 25OFF) plus $22.50 for Wisconsin taxes. e-file.com has a lot of good information on their website, but it is a bit cluttered.
At this point, I think I will go with FreeTaxUSA.com. I like their website which is probably a good indication of the programming associated with their tax software. The price is great. Zero dollars for the federal and $15 for the state. I wouldn’t go on-line if I didn’t have a good idea about how taxes work, but I am pretty confident that the Deluxe version (for an extra $7) will meet my needs and get me a tax refund as quickly as possible.
Benjamin Franklin once wrote, “Our new Constitution is now established, everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes.” At least now I can complete my taxes and hopefully it will not “do me in.”