HR Block 2011 Review

Since last year HR Block has completely re-invented their product line, including retiring the old name ‘TaxCut‘  and re-positioned itself as  HR Block At Home.  For 2011 the site has been updated throughly and ready for Tax day - which is April 17th 2012 for your 2011 tax return.

In these tough economic times with a looming recession, a lot of people are looking for some help. This is not one of the years where anyone wants to be stuck with a huge tax bill.

Preparing your own tax return can save you hundreds of dollars. But getting to know which tools are available out there is important. As someone said “If I have to chop down a tree in 6 hours, I will spend 4 hours sharpening my tool”. HR Block for 2011  is one such tool that will help you prepare your taxes - error free.

Getting to know what you get for what you pay is important. If this is the first year you are preparing your taxes or if you are a veteran, HR Blocks At Home is a great tool in your tax preparation arsenal. When you combine a tax preparation tool with a personal finance management tool, you get the ultimate combination. You can read more about these tools on this site.

H&R Block the manufacturers of AtHome has been around for several decades. In fact they are the nations oldest tax preparation firm. Drive down almost any city and you will find HRBlock offices at a major intersection - where you can do almost anything from doing employee payrolls to preparing your tax return.

AtHome is the the tax preparation software from HR Block. For 2011 HR Block has revamped their site. You can find the boxed software at most major retail stores. This requires you to buy the software, install the CD and then run the application. But there is an easier way. The same software is also available online.

With the online version, you do not need to install the software from a CD, but you can prepare and file your complete tax return over the internet right from your browser.

If you have a internet connection and a little bit of time, you can prepare your taxes online without paying an accountant huge fees.

At Home Online comes in the following flavors :

Which Version to Choose
Each of the HRBlock AtHome software is tailored to a different audience.  The AtHomeBasic (Free)  is most suited if your tax situation is fairly simple. If you are single or married, no kids or dependents, have a job and do not own a home, this will probably work for you.

The AtHome Deluxe version is valuable when you are a home-owner or have significant investment activity (stocks, bonds and such). The deluxe version will guide you through the investment situation with ease.

The AtHome Premium version goes one step further than the Deluxe and works well if you  own rental properties and need the appropriate forms and guidance for it.  It is also intended for  a small or home based business. It has all the features of the Deluxe  versions, and in addition it also takes care of your business related filing needs. The program walks you through your business deductions and  the schedule-C form is  generated. All you have to do is walk through the questionnaire.

Whats New for 2011 HRB
This year HRB has a new program that allows you to do your own taxes and then connect to a tax pro to have them verified. This new feature distinguishes HRB  from other online tax preparation sites.   This is an excellent feature for people who like to have their tax return physically reviewed by a tax pro  and at the same time save some money by preparing their tax return online. A combo deal that is surely a good value!

What exactly is Efile ?
Efile is the electronic transmission of your tax return to the IRS. What this means is with e-file you do not have to print and mail your tax return, instead, the tax preparer transmits the tax return on your behalf. Efile is available for your federal tax return and your state return too.

Most tax preparers including CPA firms usually charge extra for e-file, but online tax preparation sites like HR Blocks At Home online include e-file for free. In the case of  AtHome (Taxcut), you can e-file upto 5 tax returns (for your 2011 tax return) for the same price.

Claiming a Child as a Dependent on Your Tax Return

This is a question that gets asked many a time. Who can I claim as a dependent on my tax return ? A child qualifies as a dependent but not always. To claim the child as a dependent, you have to make sure that the child passes the dependency tests.

There are 5 test that will qualify a child as a dependent :

Relationship Test– The child you are claiming as a dependent Must : be your child, adopted child, foster-child, brother or sister, or a descendant of one of these(grand or nephew).

Residence Test– The child must have the same residence as you for more than half the year.

Age Test - The child Must be under age 19 or under 24 and a full-time student for at least 5 months. They can be any age if they are totally and permanently disabled.

Support Test – The child must not have provided more than half of their own support during the year.

Joint Support Test – The child cannot file a joint return for the year.

The IRS is very clear on these dependency tests. Make sure you qualify to claim a child as a dependent on your tax return.

© Tax-Easy.com

Deadline for Filing 2011 Tax Return is April 17th 2012

Because April 15th 2011 falls on a Sunday and because Monday April 16th is a holiday for a few.

The deadline for filing your 2011 tax return is April 17th 2012. Yes that’s right Tax day is April 17th for 2012. You have 2 extra days !!

Turbo Tax 2011 Online - Review

Tax Refund Calculator - Calculate Your Tax Refund before Filing

Calculating Your Tax Refund

Once you get your W2 from your employer. Like most people you are probably eager to get a quick estimate of the Tax Refund. It would take several hours to calculate your tax refund if you were to do it with pen and paper.

However for a quick preview you can use a Tax Refund Calculator to figure out whether you are going to actually get a big fat refund from the IRS Or if you will end up owing money to the IRS. If you knew in advance, you could plan for it.

Is there a quick way to do a quick calculation of  your tax refund situation in less than 5 minutes ?

Yes. There is.

Its called a Tax Refund Calculator. Its a powerful little tool that you can use to get an immediate estimate of your taxes.

Not only can you use it to calculate your tax refund, but you can also use it to estimate next years taxes, so you can plan on increasing your W4 exemptions and increase or decrease your take home pay.

Punch in some easy numbers and facts like your income, dependents and other basic info, hit the calculate button, and presto, you have an estimate of your tax refund. No personal information is required.

Try the Tax Refund Calculator for Free!

TaxAct Online 2011 Review

If you ever worried about the fact  you do not have a choice when it come to online tax preparation sites worry no more. Very few companies have been providing consistent, quality service at a great prices to the tax paying population as TaxAct.  If  have heard only about the 2 big online tax companies, then you haven’t seen TaxAct!

The totally revamped TaxAct site for 2011 is really outstanding. If you crave simplicity of using a site, this is where you need to start.

TaxAct Usability

Navigation: One of the easiest navigation themes that we have seen - even surpassing Turbotax online and TaxCut online. On the right hand corner is the “Refund Meter” which shows the refund (or money you owe) in real time. Real time means that if you make a change on any part of your tax return the refund is immediately calculated.

Direct access to forms: If you are a bit savvy with tax forms, you will absolutely love the direct access to tax forms. You can directly go to any tax form from the “Forms List” menu in TaxAct. The forms are neatly categorized and displayed in a hierarchy making it easy to find a specific form.

Refund Meter: This one feature beats the trip to any CPA. This is the one key feature we use to distinguish between ordinary tax software and high end software. TaxAct has the refund meter which instantly recalculates your tax refund when you make any change to any data within your tax return.

Tax Calculation Process:

Taxact guides you through a very detailed interview process. The sections are divided into the following :

Basic Info, Life Events, Federal QA, State QA, Review, Filing

Starting with basic questions like your personal information and W2 information. Then it gets into the life changes section - and asks very specific questions about the changes in your life which impacts your tax situation - events like marriage, new born, divorce etc.  The Federal QA and State QA gets into the details of your tax deductions, credits, investment income and capital gains etc.

TaxAct Features:

TaxAct comes in 3 different flavors -  Standard, Deluxe and Ultimate. The standard version has free Federal e-file. The TaxAct Deluxe and TaxAct Ultimate versions come loaded with help, including J.K.Lassers Tax Manual and several proactive deduction maximizing features.

Help And Support

Software Help: JK Lasser has been providing tax help books for a while. In the dark ages when there was no internet and no online filin, JK Lassers books were the ultimate guide. For 2011 TaxAct contains the entire JK Lasser tax help guide available at your fingertips.

Live Help:

TaxAct offers live support 8 am to 9 pm M-F, 8am-5pm Sat, and 12pm-5pm Sun. Knowing that you have an actual person to talk to when you do your taxes online should give you some peace of mind.

TaxAct Pricing:.

TaxAct beats almost everyone else when it comes to online State Tax Filing. So here is great tip.. If you are eligible to Free File at the IRS site, you can complete your Federal filing and then head over to TaxAct to do your State Tax Filing. See prices for Online State Tax Filing at TaxAct.

Federal and State combinations are packaged at very reasonable fees. The TaxAct Standard package is FREE, the TaxAct Deluxe and TaxAct Ultimate package is priced at $10 and $17.  Both these packages are the lowest prices for online tax filing.

Last day to File Taxes for 2011 - April 18th 2011

Last day to file taxes for Tax year 2011 is April 17th 2012. You get two extra days this year !

Good luck

Social Security Benefits - What determines your eligibility

Most people get their paycheck only after social security taxes are witheld from it. This money is taken at source from your gross income. So after working for several years, its likely you have paid in a ton of money into social security. And when you reach your golden years you are looking forward to reap the benefits of your hard work.

If you are born before 1938, your full benefits from social security will only be available at age 65. If you decide to retire early, you may be able to get money out of social security but the benefit amount will be lower. With higher life expectancies, it is expected that the age at which full benefits become available will rise in the future. Most people spending more and more years in retirement means, social security is paying out more.

Retiring at full retirement age would mean additional benefits and credits. In social security terminology, full retirement is the age at which you will receive the full benefits.

So what does it cost you if you retire early ?

If you retire early before age 65, the benefit amount is reduced approximately .5 percent for every month that you are below 65. Hence its far more beneficial to retire closer to 65 than before it. Retiring at 65 also means that you get the credits that are due to you.

Working after retirement

Its possible and a lot of people actually want to continue working after retirement. But remember if you do work after retirement, your benefits will reduce by the amount you would earn in social security benefits if you earn over certain limits. The social security administration changes these limits annually.

What happens if you die ?

In the event of your death, your family members will be able to collect social security benefits. Your wife/ husband could get around half of the benefit amount that you would have received if they are over 60 or disabled and taking care of a child under 16. Similarly your surviving children could get upto 3/4 of your benefits - but the children have to be unmarried under 18 or children studying in schools under 19 or children who are disabled below 22 years.

What is needed to prove your eligibility for SS Benefits

To receive social security benefits you will have to prove your eligibility. This can be established by birth certificates or your work and income statements (eg. the W2 you receive from your employer).

Preview your tax refund without actually doing your return. Use this tax  estimator (which also has life event changes). Retirement is certainly a life event changer!

© Tax-Easy.com

Boutique Tax Sites With Unique Services

If you are like most people - on or before April 15th you would head out to a neighborhood tax ’store’ like HR Block or Liberty Tax or Jackson Hewitt to prepare your taxes. If you have  complex situation you would probably head out to your trusted CPA or Enrolled Agent to get your taxes done. In general a typical tax filer will fall into these categories :

The Frazzled Tax Filer

This person goes to a trusted tax professional who has done his/her tax returns for years and years and probably know their children (or grandchildren’s) names. And they really only ‘trust’ this one and only person to do their tax return again this year just like last year and the year before that. They really haven’t shopped around for tax preparation services in a while, never found the need for it and probably never will. They are content with the service they get for the price they pay and haven’t researched other alternatives.

The Self Preparer

People who prepare their taxes on their own - either using pen and paper or  use tax software or use an online tax preparation company generally fall into two sub-categories :

Easy Tax Situation
Someone who have an easy tax situation. This category could include people who are single or do not own a home or have no children or dependents.  Students and people just starting out in their careers could probably just do their taxes in a couple of hours using an online tax service for instance.

Price Conscious Tax Filer
The second category of people who prepare and file their taxes on their own are  college educated professionals and/or individuals who are  organized and savvy with  their finances - they are familiar with computers, know a good bit of tax terminology, have a 401K or IRA and use online services frequently. They are also price conscious customers who really mind paying a big fee to a CPA or tax preparation company when they know its only a few hours of work to prepare their tax return which could potentially save them hundreds of dollars.

Where Do The Self Preparers Go

The Big Online Tax Sites

Two of the biggest online tax sites are Turbo Tax and HR Block.  These 2 companies together control than 70% of the online tax preparation market. Big does not necessarily mean bad.  Both have excellent tools and software and tons of online help. A real human is only a click or a phone call away. Both Turbo Tax and HRBlock offer a manual review (using a real tax professional) for a few bucks more. Even with these service added, they will cost you less than going to a tax professional.

But for people who are looking for something different - maybe more personalized customer service or niche services like past year tax preparation or even things like having your tax return professional bound and printed, you may not find this on the big online tax sites. How about tax sites that do only state tax returns without actually preparing a federal tax return ?

The Boutique Tax Preparation Sites

We call them boutique tax prep sites because each of them offer some service or feature that distinguishes them from the big guys. They may offer a small service or personal attention that the big guys don’t offer or just cannot offer. Here are a few boutique sites :

TaxBrain.com

Undoubtedly, Taxbrain should rise to the top when you count the number of niche services offered. In recent years, this little known company based in Tracy California has grown leaps and bounds. Taxbrain separates itself from the crowd by offering some niche services :
Past Year Tax Online
They are one of the only companies to offer online tax preparation of prior year taxes going back several years.  Turbotax and HRBlock only offer online tax preparation for prior years only for 3 years in the past. TaxBrain has a niche service wherby  you can prepare your past year taxes as far as 6 years back.
Military Tax Returns
TaxBrain offers a special discounted rate for the men and women who serve the country and takes care of the special requirements of their returns by offering a product called military tax package

TaxAct

Makers of the boxed software, they have been around for years and years only to be overshadowed by the big guys. One of their specialties is their low priced tax preparation packages combined with good support. Try them out at  TaxAct.com. Faithful taxact customers have supported them for years and years.

FreeTaxUSA

Despite the name, its not really free. But they do have a couple of great services. If you do not have a printer, you can get a high-quality, professionally printed tax return here for a few bucks. If your printer is broken or if you are one of those people who are mobile always but want to keep a hard-copy of the return, this service is for you.

To conclude, its a great idea to evaluate your tax preparation needs before you choose your online tax preparation service or software package. Smaller online tax sites offer services that the big guys just cannot provide and you should look into it. Even if you do not like the idea of doing your taxes online or using tax software, there are several free tools available online like theTax Refund Calculator.

Happy Tax Season!

©2011 Tax-Easy.com

First Time Tax Filers

If this is the very first time you are going to file a tax return, you have come to the right place.

As scary as it it, with a little bit of help you can be on your way to preparing and filing your tax return.
One of the first things you need to make sure is that you have received your W2 from your employer. If you worked more than one job during the year, you should get a W2 from each employer.

As a first time tax filer, you may be eligible to file Form 1040-EZ. This is one of the simplest tax forms out there.

Here are the requirements to file the 1040-EZ form :

• Filing status : You must be single or married filing jointly. If you are married, to be eligible to file Form 1040-EZ, you must file as married filing jointly ie. you cannot file separately
• Your age must be less than 65
• You cannot have any dependents (children or other dependents you take care of)
• Your income must be less than 100,000
• You must not be in bankruptcy

How to file the 1040EZ
You can download the form from the IRS website, fill in the form and mail the form.

Go to an online tax preparation site like TurboTax or HR Block and prepare it for Free. The advantage of preparing it onine and using e-file is you do not have to mail anything to the IRS. Also the refund check will be sent to you in about2 weeks. If for some reason you do not qualify to file form 1040-EZ, the tax software will automatically guide you to the right form(s) for you.

Once you jump in and get it done, you will realize it is not as difficult as it sounds. And you would have saved yourself some dough by doing it yourself, and you will get that boost of confidence to take care of your own taxes next year and the next!

To get you started with your first Tax return, here are some discount coupon links from two of the biggest companies doing Online Tax Preparation :

HR BLock Discount

TurboTax Discount

Good luck with your very first tax return !

©Tax-Easy.com

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