The Bottom Line: OK for moderately complicated returns. If you have already calculated your taxes by hand or by another program, and the results match, I'd probably trust it for E-filing.
Arthur.Rubin's Full Review: Intuit TurboTax Premier for Tax Year 2004 Full Ver...
I finally E-filed for the first time, this year not wanting to stand in line at the post office on April 15
First, let me explain my background in taxes. I've been a professional tax preparer (registered in California 1990-1997. I've stated E-filing is a bad idea here. I tried TaxAct for the Web in 2003 and reviewed it here This year, owing money, and not wanting to spend time at the post office, I decided to try another program. Because of my experience with TaxAct, I decided to go for the top-of-line-version without business accounting.
Apparently it wasn't top-of-the-line enough.
My detailed tax situation
Basic information: married, no kids, under 65 years of age, not blind
Income sources: Wages, interest (no 1099s due to the small dollar amounts), state tax refund, business income (Epinions), rental loss, miscellaneous income (recovery of previously deducted medical expenses from 2003, the California auto tax refund, online sweepstakes winnings (only $30, but I decided to be honest), and a chip my wife found in a restroom in Las Vegas), and income from IRAs I inherited from my mother.
Itemized deductions: Medical, taxes, mortgage interest, charitable contributions, investment interest (I used 0% credit card loans to fill my (now 3%) ING account).
Good points
The full questionnaire would have caught all the income and expenses except for the online sweepstakes winnings, and some coupons I get from filling out surveys. Oddly enough, it did specifically mention "found money". I knew that was income, but the program wouldn't have prompted me for it. Each questionaire page has a link to a help file which also has links to the IRS publications relative to that page.
Most state returns (resident and non-resident) are available. As I'm a California resident, with no income sourced out of the state, I elected to purchase TurboTax State (292596), which is supposed be free with the rebate (more on that, later, as well.) It's not listed in our products, but I question the value of a review of TurboTax State, anyway, as the odds are that different states are handled differently.
Depreciation - -Once I got the depreciable assets properly entered (with overrides as to the different depreciation life for regular and AMT, and bonus depreciation, and California regular and AMT depreciation) it correctly calculated the depreciation, and correctly calculated the California form 3885A (depreciation adjustment under California law). We'll see if it carries the amounts forward next year. It did not allow sufficient overrides to cover partial conversion of an asset to personal use. As an example, if you own a duplex, rent out both units, and then move into one of them (or otherwise take it off the market), you'd need to provide separate information on the two units, producing two separate columns on schedule E, and two separate form 4684s.
Federal AMT -It didn't prompt me to fill out AMT adjustments for mortgage interest expense, but, in its defense, even if all my interest was non-deductible for AMT purposes, it wouldn't have affected my taxes, and wouldn't have required filing the form. It did prompt for other AMT adjustments.
Medical deductions: I did have to override, because I have a different breakdown of medical expenses than their worksheet. If one were working from individual receipts, rather than a separate spreadsheet or Quicken file, their worksheet (with individual worksheets for each line of their worksheet) would be great.
Alerts -- aside from being upset with my overrides, it had nothing else incorrect to say.
Specific problems:
As in most tax programs and preparers, when you give a list of items to be accumulated into a single entry on a tax form, TurboTax rounds each entry to the nearest dollar, rather than accumulating the exact amount and then rounding to the nearest dollar. It's common, but still incorrect.
It's difficult to enter interest not reported on 1099s. I finally had to enter the information as if it were on a 1099. My problem was that I had less than $10 in interest, but this could be a problem for you if you make a personal loan, and the interest you receive is less than $600, so that they aren't required to give you a 1099.
You can easily tab to individual sections of the questionaire, but not to individual questions. As an example, to correct a rental depreciation schedule, or even to add a new depreciable item, you have to page through the entire rental property section of the questionaire.
It's difficult (but not impossible) to enter mortgage interest paid when the bank doesn't give you an accurate 1098.
There is no good way to apportion expenses. For example, if you own a duplex, where you live in one of the units, you need to split expenses between personal and rental expenses. (Unlike TaxACT, you can declare a percentage of use, but it won't copy the personal component of mortgage interest and property taxes into the correct itemized deduction area.)
There is a prompt for California tax credits, but you have to know what they are in order to use most of them. (In TurboTax's defense, you can link directly to the official state instructions, as well.)
I have absolutely no confidence in the California AMT calculation. California form 540 schedule was required (according to the instructions), but was not generated. It wouldn't affect my taxes, but still.
IRAs - I had to manually insert the code (4 - death) on the "penalty for premature distribution of IRA" forms in order to avoid having that penalty applied, even though it was on the 1099Rs.
TurboTax rounds all figures on the return to the nearest dollar, although some of the internal spreadsheets are not so rounded.. While the IRS recommends doing this, it isn't required, either on paper returns, or on E-file returns. However, it prints the dollar amounts as (say) "4,325."
rather than just "4,325", which is not considered an acceptable format according to the IRS instructions. Furthermore, it prints negative entries as (say) "-8,325." rather than the preferred "(8,325)".
Miscellaneous income worksheet: On a joint return, it requires you to allocate all items between the spouses. It makes some sense, but there should be a "split 50/50" option. (This relates back to the rounding problem, as well if you have joint miscellaneous income of $25, you have to manually enter $13 for one spouse and $12 for the other.)
Amended returns
See "You can easily tab..." above. Also, for the California return, you have to manually copy some of the information from the old return onto the 540X. It also generates the front page (1040, or 540 for California) - which the instructions for the 1040X/540X specifically prohibit.
Pricing
The cost includes preparing up to 5 personal returns. E-filing is $14.95 extra for each of the Federal and California return, although there's supposed to be a rebate for one Federal E-file.
Rebates:
$20 rebate: Paid in a little under one month
Free TurboTax State ($19.95): Denied - they couldn't read the cash register receipt. As they requested an original cash register receipt, I cannot resubmit.
Free TurboTax ItsDeductible ($19.95) - paid $20 in a little over one month.
Free Federal E-file - unable to complete. They didn't send a receipt I could use.
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