A word of warning, if you use TurboTax and have long term capital gains make sure it is handling them correctly.
I have been using TurboTax to do my taxes again this year. A couple of weeks ago it looked like I was going owe the government a substantial amount. This was unexpected and irritating but it didn't occur to me that the program might be wrong. My income was quite a bit higher (mostly due to some long term capital gains) and I hadn't been real careful in figuring my estimated tax so I figured I hadn't gotten it quite right. But today I made some small changes and my tax owed dropped significantly. This prompted me to investigate further and I found that TurboTax had apparently been failing to treat one of my capital gains as long term. Since long term gains are taxed at a favorable 15% rate this meant it was overstating the tax I owed. I believe this was due to a program bug because when I tried to fix the entry it started reporting a gain of zero which was obviously wrong. I had to delete the entry entirely and reenter the information to fix the problem.
This is rather disturbing. It is nice to have TurboTax handle the computations but not if they are going to be done wrong especially since it is sometimes hard to tell exactly what TurboTax is doing.
Another irritation is the Deluxe version doesn't handle ESPP sales easily because they want you to pay more to upgrade to the Premier version. All in all my opinion of the program has taken big hit but I really don't want to go back to doing my taxes by hand either. I guess I will just have to review the results a lot more carefully.
Quote of the Day #2: Tax Plans
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