2007 TAX TIPS/SECRETS THREAD
edith head
5,106 Posts
hi, its w-2 month for 2007. i've always ez filed or used freetaxusa in the past which i now realize was really dumb because my friends who were in the same boat always received much bigger returns because the paid for someone or some service to handle their filing.what do you use when it's time to file to maximize your returns and/or owe less? i've knocked down 1 debt in dec, one debt this month and have one set to knock down next month. all that's left is my last student loan which is the biggest and most intimidating but not bad at all when compared to my grad school friends. i doubt i could pay it off this year, but it would be great if i could get the most out of my tax return to apply towards that balance so i stop getting murdered by interest. i've never been so depressed and excited at the same time to be completely debt free!
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yea, i've used free tax services in the past such as freetaxusa or EZ filed and got the minimum return. i want to hear stories from folks who paid a service to file where it was really rewarding, talking hr block/ turbotax and that crap.
I hate that about them, but as my taxes will now be more complicated than just a W2, I'd have to go to some type of accountant and pay money, anyhow, so, in that regard, I like the instant refund.
I use Turbotax and it's OK, it's pretty simple to plug and play, but it gets a little trickier if you have a variety of investments and your own business(es). I would recommend it if you have a general understanding of what can be claimed, etc.
That said, I'm also interested in hearing from people who have someone help them prepare.
From my experience it's been helpful in terms of getting some deductions and simplifying things. It sounds like you only really need a simple form, so it will be cheaper for you if you use turbotax. The more complicated (if you have any 1099s or anything) then you pay a little more.
I ain't mad at them. It files it quick an my refund was always quick too.
Not necessarily.
You should ask your friends how they managed to get larger returns - are they itemizing deductions, for example?
My wife and I use an accountant because our finances are a Frickin' terror considering that she's a contractor who also does freelance work, while I get a W2 from the university but I also have my freelance income, plus both of us have stock holdings and dividends and blah blah blah. Plus we have a kid.
We itemize all our shit because we're able to take a home office deduction plus other stuff like that. Generally, b/c of our freelance pay (1099s out the wazoo), we don't expect to get a return but at least we can diminish our tax liability and most years, it's not nearly as bad as we think it's going to be and it's worth paying an accountant to put all this together for the peace of mind.
BUT, if your taxes are relatively basic, then it's worth doing it yourself since hiring an accountant means paying them by the hour (and they cake nicely off that).
Umm, care to expand a little? In the past, it's been pretty simple. If I calimed one, I've always ended up paying just about what I owe every year. I might have ended up with 200 or 300 back. Claiming 0 means they take more taxes out, but my income is still taxed the same come tax time, so this would mean that I am most likely going to have paid much more than what I owed. The remainder is a refund. Care to tell me how it could be different? Also, I have some deductions for interest payments on my mortgage. This lowers my taxable income even more, hence less taxes owed, and even more refunded.
I was under the impression that this was the exact opposite, meaning you would have to claim "2" in order for them to withhold more and thus get a larger refund. I remember claiming "0" when I was in college and getting very little withheld from my paycheck. I could be wrong, but you might be in for a surprise come refund time.
I understand it as claiming "0" means you have no dependants so you have less expenses so they take more taxes because you don't "need" the money. If you claim "2" (as if you were supporting yourself and a child, let's say), they would take less takxes out so you have more of your income to support you and your child. Since you get a deduction for proving that you support another person, you wouldn't owe as much in taxes. If you claim "2" and then you don't have a dependent to write off at the end of the year, you get taxed as an individual, which could mean you end up owing because they didn't take enough out throughout the year.
In fact, I'm pretty sure of this because I accidentally claimed "2" for a year and owed, and every other year I've claimed "1" and broken just about even.
Makes sense. Let us know how it turns out. I always claim "1," but I like the idea of using tax returns as a vacation starter fund, so if you make out nicely, that might be a good way to go for me.
The more dependents you claim the less the IRS holds from your paycheck. However, those dependents need to be a real. When you file they'll make you pay the difference.
If someone claims you as a dependent then you can't claim yourself and you put zero. However, if no one claims you you can put 1. Of course if you support a spouse and kids it's 1 for each of them. If the spouse works and supports herself I'm not sure how that would work.