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BANKING & FINANCE - ANTON COMMUNITY NEWSPAPERS - FEBRUARY 2012
Going From CPA to CD-ROM: Software to Prepare Your Taxes By Ronald Scaglia om Eckert had enough. Every year, the fee charged by his accountant to prepare his income taxes had increased so that within five years he went from paying $125 to $200, without any major changes in his financial situation. So, after five years he once again went to his accountant and paid him to do his taxes but he also purchased Turbo Tax software and simultaneously did his taxes with the program. When the difference in the return prepared by his accountant and the one Eckert prepared was a miniscule $5, Eckert became a loyal Turbo Tax user and has since done his own taxes with the help of the tax software. “I didn’t see the value,” said Eckert who is the general manager of the Microcenter store in Westbury. “I wasn’t getting more out of using the services (of accountants).” Like many tax filers, Eckert will again be using Turbo Tax to complete his taxes. Microcenter had four versions of the tax software in stock with the basic package costing $29.99 at Microcenter. The Deluxe package which has an added feature for maximizing deductions costs $59.99 at Microcenter, The Premier Edition which has added features for those with investments costs $89.99 at Microcenter and the Home & Business edition for those who own their own business retails for $99.99 at Microcenter. According to Eckert, Turbo Tax is by far the most popular tax software product sold at his store. He believes that consumers are drawn to it because Turbo Tax has positioned itself as the dominating presence in the marketplace. “It had brand recognition and that’s what drew me to it,” said Eckert. For those who prefer another option, H&R Block also produces tax software.
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Tom Eckert (l) and Chris Robertson with some of the tax preparation software available at Microcenter.
Eckert said it is the second most popular software sold at his Microcenter store. At that store the basic edition costs $19.99, the Deluxe edition which has guidance for homeowners and investors costs $49.99 and the Premium edition, for the self-employed and those with rental property, retails for $64.99. Chris Robertson, sales manager at the Westbury Microcenter said he has personally used the H&R Block program. “It’s very easy to use,” said Robertson of the program. “It walks you through everything and gives you a check to make sure you didn’t miss anything.” There are other tax software programs such as Tax Act for those who are looking for another choice. However, whichever
program taxpayers choose, both Eckert and Robertson say that taxpayers will find it more affordable and also more convenient to prepare their taxes with a software program as opposed to paying an accountant. “Every year I go, they (accountants) ask a couple of questions and I don’t know what I’m getting for it,” said Daniel Martins, Retail Sales Manager at Microcenter. In addition to the savings, Eckert said that preparing his own tax return has made him more knowledgeable about his portfolio. For example, he said that he is now better aware of how frequently some of his stock holdings pay dividends, and how high those dividends are. He said that he is also more aware of changes so he is able to determine if one of his investments
is not performing as well as it should be. Robertson added that preparing his own returns makes him more aware of what items are deductible and he keeps this in mind throughout the year. In fact, he said that he is saving more receipts than he previously had done. “You would never know what’s available unless you do it yourself,” said Robertson of deductible items. New York State taxpayers should be aware that this year, the state has implemented a new e-file requirement. The new e-file requirement mandates that individuals who prepare their return with software that supports electronic filing, and who also have access to the Internet, must file electronically. Those who fail to do so may be subject to a $25 penalty unless they can document that failure to electronically file was due to reasonable cause and not willful neglect. The website of the New York State Department of Taxation (www.tax.ny.gov) lists the software programs which are approved for electronic filing. The department also advises that software providers can charge you for using their software to prepare and calculate your tax return, but they can’t charge extra for e-filing as this is prohibited by New York law. Additionally, according to that website, about half of all New York State taxpayers can prepare and e-file their federal and state income tax returns at no cost. Those with incomes of $57,000 or less in 2011 may qualify for FreeFile and can use free tax preparation and free e-filing software. It is available through the website of the New York State Department of Taxation and Finance, where software companies make their products available for free. Those who believe they may qualify and are interested in the program should visit that website.
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