2006 Tax questions..

Discussion in 'After Hours Lounge (Off Topic)' started by Jay H, Jan 15, 2007.

  1. Jay H

    Jay H Producer

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    Hi, it's kind of that time of year again, when we anxiously(?) wait for out 1099-INTs and W2s to arrive....

    As the owner of a huge-ass house.. or more appropriately, a huge-ass Mortgage, I received my 2006 Mortage interest statement from my mortagage company.

    I've always done my taxes by hand and since I dumped my Datek account in 2005, I don't even have capital gains to deal with....

    I've had 1 minor charity contribution but my mortgage is the biggest change this tax season.

    Wondering if it is worth it to try TurboTax since I don't mind doing it myself, so far, my taxes have been fairly simple, using the EZ, which I wont use now if I have to itemize which I think I will wind up doing cause of the mortgage (right?).

    I forget too about the state, one of them is really simple, I can get the turbotax federal for $20 but the state+federal is like $45.

    Jay
     
  2. Steve_Pannell

    Steve_Pannell Supporting Actor

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    I've used TurboTax in the past and it does a good job and can help you find deductions you might otherwise miss. It asks a lot of questions and it's fairly simple to use. It also guarantees that the math is correct.

    I have started using H&R Block's TaxCut software which is basically the same as TurboTax but is about $10.00 cheaper.

    One good thing about either of these is that once you enter your personal information next year you can just import the previous year's info and save a little time.
     
  3. LewB

    LewB Screenwriter

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    I've been using Turbo Tax for years and am generally quite pleased with it.
    They usually run a rebate deal for Quicken when you buy Turbo Tax. They rebate up to $30 for Quicken, which gets you Quicken Basic. I track all my finances with Qucken.
     
  4. Dennis Nicholls

    Dennis Nicholls Lead Actor

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    Doing by hand is still simple for most folks. Doing it by hand has the advantage of being a learning experience. Don't forget: property tax, and any (mortgage origination points divided by the term of the mortgage).
     
  5. Jay H

    Jay H Producer

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    I've had it very easy too in terms of DIY, which I am the type of guy.

    No capital gains, no dependencies, no outstanding student loans, my credit score is like 830 or something like that, but I now have a mortgage, which from my research means I will be filing a 1040 with schedule A to itemize deductions (Mortgage Interest goes in line 10). I can't use the 1040EZ or the 1040A...

    I don't mind writing in my personal information, like I said, I am a big believer in DIY... However, I have been collecting HP toner cartridges at work and turning them into staples for the $3 coupons. I can use 3 at a time so I would have $9 off from buying TurboTax or TaxCut there....

    Not sure if getting the state version (NJ) would be worth it. I know one of them is really simple.... but there's a big difference in price between them.

    Jay
     
  6. Michael Reuben

    Michael Reuben Studio Mogul

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    Among other things, it's a great way to learn about the Alternative Minimum Tax ("AMT"), which is the parallel calculation you should run if you itemize and have certain deductions, e.g., lots of state and local taxes.

    M.
     
  7. Mort Corey

    Mort Corey Supporting Actor

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    For as simple as your circumstances seem, the software is likely not worth the trouble. Form 1040 and the Schedule suppliment souldn't take any more than an hour...probably less....the instructions read a little slow but it's a great plot.

    Mort
     
  8. Bryan X

    Bryan X Producer

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    If you do decide to go the route of Turbo Tax, you might be better off to just skip the state. For example, in Ohio, you can log onto the State of Ohio's website and file electronically for free. So check with your state of residence before paying for it.

    I've used Turbo Tax for quite a few years. I don't buy the software though. I do it all through their website. If you file before a certain date also, you can generally get a really good deal -- right now you can do Turbo Tax online and efile for $15.00.
     
  9. SethH

    SethH Cinematographer

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    Definitely do it all through their website -- there's no reason to buy the software since it's only good for one year anyway. Also, if you'd like, the website will hold on to your old information and import it next year so all you have to do is update the things that changed.
     
  10. Patrick Sun

    Patrick Sun Moderator
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    I quit TurboTax after they started installing all the C-dilla crap on the hard drive, so I've using TaxCut for the past 3-4 years, and have no complaints.
     
  11. Bryan X

    Bryan X Producer

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    I don't think this is an issue with the website version.
     
  12. TimMc

    TimMc Stunt Coordinator

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    Maybe check out TaxAct? TaxAct Standard can be either downloaded or done online for FREE. TA Deluxe w/ Federal & State (and free eFile) is maybe $16-$20 total (online vs. downloaded). I've used TurboTax ever since the ChipSoft days but don't think too highly of them recently - they're nowhere near done w/ this year's version yet & if I needed to verify by today for the last est. tax payment I would be totally screwed, plus our State version is still weeks away. Tried Tax Cut a few years back and will admit that after a couple of weeks I went out and sprung for a copy of TT 'cause TaxCut was just irritatingly different.

    If your situation is reasonably simple then you can just read the IRS instructions, write your numbers on the usual forms, and mail it in. If you want to eFile then TaxAct seems like a decent deal (because of the no-rebate additional $$$ for TurboTax eFilers this year, etc.).
     
  13. LewB

    LewB Screenwriter

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    I believe that was only done for 1 year.
     
  14. Steve_Pannell

    Steve_Pannell Supporting Actor

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    That was enough for me. I had forgotten why I switched from TurboTax to TaxCut but now I remember. I ended up wiping my hard drive and reinstalling my OS and other software.
     
  15. Jay H

    Jay H Producer

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    What is the AMT for and how likely would one really save from it? What taxpayer is the AMT geared for? I'm solidly middle class, a homeowner... certainly not rich or poor...

    Jay
     
  16. Michael Reuben

    Michael Reuben Studio Mogul

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    You don't save from the AMT; it costs you. It was originally designed to prevent wealthy taxpayers from paying too little tax through the use of certain sheltering techniques. However, because it was not indexed for inflation (unlike most other things in the tax code) and because it was left untouched in the major tax cut bills since 2000, it has increasingly snared millions of solidly middle class taxpayers who are neither rich nor poor.

    Basically, the AMT is an alternative tax calculation with different rates and many fewer deductions. The most notable deduction that you lose is the one for state and local taxes (including income, property, sales, you-name-it). Moreover, the AMT is not optional. You have to calculate your taxes under both the standard income tax and the AMT, and then you pay whichever is higher.

    So far, most victims of the AMT have been people in states with high local taxes. But unless it is significantly reformed or abolished, projections indicate that the AMT's reach will expand dramatically in the next few years. Congress has been enacting a temporary "patch" each year to keep the AMT relatively in check, and I'm pretty sure I remember one being passed for 2006. 2007 remains an open question.

    Why not just abolish the AMT? Simple: It raises an enormous amount of revenue. I believe projections show that, without reform, by 2011 (and possibly sooner), the AMT will raise more revenue than the standard income tax.

    Disclaimer: I don't do my own taxes; so my ability to quote exact details of the AMT calculation is limited. But the problem has been written about extensively, including general-interest publications like the Wall Street Journal, and there's plenty of information out there for those who are interested or concerned.

    M.
     
  17. Dennis Nicholls

    Dennis Nicholls Lead Actor

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    There's a quick-and-dirty worksheet about the AMT in the 1040. You only have to complete the entire calculation for the AMT when the results of this worksheet tell you to. This year it's on page 39 of the 1040 book.

    If you have to calculate AMT, you need to get form 6251.
     
  18. SethH

    SethH Cinematographer

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    Unfortunately for you that makes you a pretty solid candidate for the AMT. Each year the AMT deeps a little deeper down into the middle class. If you itemize deductions -- which I assume you will since you're a homeowner -- there's a decent chance you'll pay the AMT. Hopefully you'll avoid it though.
     
  19. Jay H

    Jay H Producer

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    As the first full year of mortgage, yes, this will be my first time itemizing and my first time with the full 1040 form. So yeah, I'm hoping it's not as painful as it sounds like it is...

    I am going to walk down to the post office to see if the forms are out. I was sent the 1040EZ because of my filing last year so I need to pick up the 1040 and I guess Schedule A for the itemized deductions....

    Jay
     
  20. Philip Hamm

    Philip Hamm Lead Actor

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    I personally love Turbo Tax! It's easy peasy and well worth the $45 if your state's form is a PITA. Some are easy, some are not. You should be able to find a deal where they throw in Quicken also.
     

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