I have been using TaxAct for years to calculate and file my taxes. At first I would pay to download the software and run that, but as prices went up for the download I would use the online software. TaxAct was always cheaper than TurboTax and others and you could import the previous year’s information which helped speed things up. It was usually extra to get the state version, so I would fill in my own state forms and mail them in, which was so easy it wasn’t worth $10 extra. Then they started having the deluxe version for maybe $5 more which included state as well as state electronic filing, so I was getting that for around $12-15 total. They would run specials in November or December offering the best prices for next year’s taxes. This year the price structure changed and it was now $14.99 for federal and $14.99 for state (and the sale was only 25% off, maybe just the federal version). I felt like that was too much and I needed to check out other options.
I found a page at Georgia’s Department of Revenue that suggested some different companies’ offerings that were free or highly discounted, usually for people with lower incomes. Some allowed higher incomes as long as you weren’t doing anything complicated like itemizing deductions or filing capital gains (which I always need to do). But a couple of them didn’t seem to care. I always thought my income would have been too high to do that, but they go off of the adjusted gross income, which doesn’t include the significant chunk of my income that now goes to my 401k and deferred compensation plans. That and getting virtually no raises at work for the last 10 years get me under the upper limit of $62,000 (the IRS raises the cap for free filing every year, but my employers do not adjust my salary for inflation; counting inflation I am making 13% less today than 10 years ago; I should never have done that calculation). The only thing was you had to follow the link from Georgia’s website because none of these companies would mention the deal on their own websites (unless you were doing 1040Z and had pretty low income, a teaser to get people interested). The bad thing is that Georgia’s page is out of date. The good news is the limits generally have gone up. Then I found the IRS website for free filing. They ask you a few questions like your age, income, and state and then provide you with a list of websites you can use to file free, including state. For Georgia I had choices of TaxSlayer, H&R Block, and OLT.com. Before I started using TaxAct, I had bought H&R Block’s Tax Cut software a few times, so I chose H&R Block. Again, you have to go through IRS, not directly to the Block’s website.
But I was leery that there would be a catch based on the type of return I file. To test it out, even though I haven’t gotten all my forms yet (and won’t until the end of February), I went ahead and started a return. They had me upload a PDF of last year’s taxes done by TaxAct, but it only seemed to capture my name, address, and social security number. I filled in my W-2 information and tried to jump ahead to itemized deductions, but you have to follow their sequence so I had to pretty much do everything, even though I just didn’t tell them about some of the investment income (I can add it later). Then I did some itemized deductions. And then I was able to do the final review of my forms, including inputting my IRS Identity Protection PIN (a great feature for Georgia, Florida and DC residents that gives you a PIN that only you will know that prevents crooks from filing taxes using your social security number; this is great for me since I can’t file until late February and apparently my state is filled with crooks) and it looks like it will go through and I really don’t have to pay anything. I don’t know how long I have qualified for something like this (probably only since I started paying more into my retirement plans once I paid off the house in 2012), but it sure beats paying money to do this. I wonder if the IRS pays them for each free file given that it is much easier for the IRS to process electronic files than paper ones?
I got my last tax form yesterday and since I was getting a refund I wanted to file as soon as possible. I figured it shouldn’t take long since I had been through everything pretty well already. Wrapping up was a bit of an issue. H&R Block was saying I needed to fill in some zeroes for values in the capital gains adjustments due to AMT. I reviewed my capital gains entries and it never asked about AMT. It linked me to something to do with whether I had health insurance, but there were no numerical fields there. I looked for help on the subject, but it referred me to IRS guidance on AMT. I started filling in stuff that sounded similar, but got nowhere. I gave up and chose to ignore the error. It then let me start the filing process, but when I finished everything, it said I was ready to print my forms and mail them in. It turns out that because I had ignored one of their errors, they would not allow me to efile. So I went back and eventually they linked me to some section where I filled out zeroes and it said everything was fine.
The final filing process is more complicated now than in the past. I had to get a PIN from the IRS (this is in addition to the identity protection PIN) for efiling. Previously I could just make up a number for that PIN. So I called an automated IRS line and got my PIN using information from last year’s return. Then I had to give Block my driver’s license number for identity confirmation. I think they’ve had so many problems with people filing other people’s taxes, that they have added maybe too many layers of protection. Anyway, I finally got to the point where I could file. I reviewed the numbers I had input to make sure I had entered all my stuff correctly, but I did not run my spreadsheet which can figure taxes. Hit send. Then I tried to file state, but it said I couldn’t do that until the federal was accepted. 15 minutes later the federal was accepted, so I filed state. Hit send.
This morning I checked the numbers with my spreadsheet. I was getting a different number for my rebate. After I correctly entered the amount of capital gains in my speadsheet, I found that Block had not taken into account the $81 I had paid in foreign taxes, which I had reported to them from three different 1099-DIV forms. So my refund should have been $81 more. I chatted online with tech support (they weren’t available the night before) and they said maybe the tax laws changed. I said no. So they are going to escalate and have someone call me in a couple of days. I probably will have to file an amended tax return via mail to get the $81 (I’ve never had to do that before). Fortunately it only affects my federal return. Anyway, this whole thing with H&R Block has been kind of a disaster, so it looks like I am getting what I paid for. I’m not sure if their software is always this bad or if they make their free software somehow dumber and harder to use. Since foreign taxes paid are one of the boxes on any 1099-DIV and will not be zero on any mutual fund that invests overseas, it seems like they should realize I would like to get that money back.
It seems like I remember something about an H&R Block maximum refund guarantee. It turns out that the guarantee states that if they did not get you the maximum refund that you could get, they will refund your entire tax preparation fee. Hmmm . . .
I figured out to get the tax credit with H&R Block’s software. I did a search in their online help for form 1116 which took me to a topic that asked if I had additional foreign taxes that I paid. Once I answered a couple of questions saying I didn’t have anything else, it gave me the tax credit. I don’t actually need form 1116 for foreign taxes reported on 1099’s. However, if I do an amended return, I don’t want to make that change yet. I will wait and see if the IRS figures out the error and gives me a bigger refund. If they don’t, then I need to do an amended return.
Got my state refund today in my bank account. That is only 1 week.
I got my federal refund today and the IRS did not correct for the missing foreign tax credit. After going to the Form 1116 question screen and saying I had no other foreign tax income, H&R Block’s software prepared a form 1040X for the amended return, but I couldn’t figure out how to add an explanation that is needed (once again, their software pointed out this would be a problem, but then when I clicked “Fix Issue” it took me to a screen that did not let me enter the explanation), so I found the form online from IRS and filled that out instead, using Block’s form as a go by. Amended returns always have to be filed by mail, so it doesn’t matter that much. It is a pretty simple amended return, just the 2-page 1040X and no other forms required. I put it in the mail, so we’ll see what happens. The IRS website says it takes 8-12 weeks to get a refund from an amended return.
I got a letter from the IRS today saying that my tax return had been adjusted. Classic IRS. They sent me two copies of exactly the same letter and they didn’t actually say the amount or even if I would be getting a refund or owe them money. However, they did say that if I am due a refund, I will get it in four to six weeks.
Later I noticed a second letter from the IRS. This one said they needed more information. Specifically they wanted a W-2 form for the additional income I reported. However, I didn’t report any additional income. I could call, but everyone’s taxes are due Monday, so they are probably kind of busy right now.
Rather than spend time on hold to make sure they don’t really need my W-2, I figured I would just send them the W-2 and potentially waste a stamp on something unnecessary. Part of the letter they sent is a voucher that you cut out so the correct address appears in the window of the included envelope. They say make sure you can see the address through the window. But if you cut out the voucher as directed it is about a half inch smaller than the envelope, so it can slide upwards, hiding the address. Below the address is your social security number, which is then exposed.
I checked the status of my amended return online and the IRS said that as of May 6, “Your Form 1040X has completed processing resulting in a refund, balance due, or no tax change.” So that’s great to know.
I’ve been waiting for my check to show up. Today Rosa got to a letter from the IRS, but not enough to do serious damage. Inside was a form letter saying they had received my correspondence (the W-2 they asked for) on April 29 and now would need an additional 45 days to respond.
Finally! Today I got my check for $81 plus 77 cents interest. I had tried to call them a few times, but the extension for the number they gave me said they were too busy and they would not take my call. At no point until today did they confirm that I filled out my forms correctly and was due the amount I asked for. Lesson learned, I guess: don’t try to rush the process by submitting before I do all of my checking.