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Why did I decide to file independently this year...

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KatherineLee88
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Why did I decide to file independently this year...  Reply with quote  

My parents used to do my taxes. This year I decided I should do my own.

I have done a fair amount of reading myself about filing taxes... but after messing around with a pile of papers for awhile I decided their must be an easier way so I gave TurboTax Basic a try.

I'm not sure if I trust TurboTax after it produced an inaccurate interpretation of the data I inputted. I answered a question that asked if I was in a graduate program as of Jan 2010, which I answered no since I started August 2010, so understandably I would answer no to this very clear, direct question.

Then after entering a second 1098-T form (form about qualifed educational expenses) since I have one from undergraduate (University of MN) and one from graduate school (University of Iowa) for the 2010 tax year it said some bananas about you indicated you did not finish you "first for years" of college (they did spell 4 as "for", haha). Obviously this is bananas because I inputted on my second 1098-T that I was a graduate student.
Hmmm... I guess they noticed the discrepancy because of this and my "incorrect" answer of "no" to starting graduate school on Jan 2010.

Okay, so... let me get this straight... TurboTax asked me if I started/was in a graduate program on Jan 1, 2010. Which I wasn't... I was still an undergraduate student, hence my "no" answer. But I'm suppose to answer yes, otherwise TurboTax thinks I'm eligible for a $800 American Opportunity credit that I am not actually eligible for.

So really... the question should ask something like, "Did you complete a four year degree in the 2010 tax year?" That is what they're actually trying to get an answer for. Seems weird that they have it phrased the way they do since I am sure I am not the only person filing federal income taxes that finished an undergrad program in May 2010 and started a graduate/professional program in Aug/Sept 2010.

Glad I figured it out since TurboTax was ready to let me file it.

I wonder how many more of these little slip-ups exist in the TurboTax return. This simple question changed my refund from $1,600 to $800. I wish I did qualify for that credit... $800 more would be awesome!!

Anyone else notice some interesting mixups when using TurboTax??
Makes me want to waste some money and go to H&R Block to get my taxes done.

Also, is it really possible to get back MORE money from a federal income tax returns then you initially paid in?? For example, I paid in $811 this year, but TurboTax says I will get $1200 back. Apparently when all my tax-liable income is reduced to $0, meaning I get my $811 back, I still qualify for a Making Work Pay credit of $400. Sure, I'll take that extra $400... but is that really how it works? I don't get how that is possible.

And to think next year my taxes will be even more confusing with investment income additions. Gawrrrrr. Got a year to read up for that.
Post Wed Feb 02, 2011 1:20 am
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KatherineLee88
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I went back to double check that I did read it all correctly...
This was the TurboTax question:
"Were you a graduate student (Ph.D., M.B.A. or master's degree) as of January 1, 2010?"

Which I answered no. What TurboTax wanted me to say was "Yes." Their "Explain This" says -
"More Info About Graduate Students

Undergraduate fifth and sixth year seniors should answer "No" here if they did not complete their degree before January 01, 2010.

Students with a bachelor's degree or equivalent to a bachelor's degree on 01/01/2010 should answer "Yes" here. For example, Lilibeth graduated in 2008 with a bachelor's degree. In 2010 she enrolled in an Associate Degree in Nursing. Lilibeth should answer "Yes" here because she had a bachelor's degree on 01/01/2010.

Students who didn't complete their first four years of postsecondary education before the beginning of the tax year may be eligible for the American opportunity credit.
If you've already received your undergraduate degree and are working on an advanced academic graduate degree, such as an M.B.A., Ph.D. or master's degree, you won't qualify for this credit."

So maybe they should rephrase the initial question.
Or... maybe I'm the only person who didn't complete my bachelor's degree by 1/1/2010, completed it sometime during the 2010 year and started a MBA, PhD or master's degree before the end of 2010 and just so happen to be filing income taxes this year.
Post Wed Feb 02, 2011 3:10 am
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coaster
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Re: Why did I decide to file independently this year...  Reply with quote  

quote:
Originally posted by KatherineLee88
I still qualify for a Making Work Pay credit of $400. Sure, I'll take that extra $400... but is that really how it works?

It is in Pres. Obama's and Sec. Geitner's dream worlds. Don't worry, it won't last.

Couple quick comments about TurboTax:

The Basic version does a poor job on anything a little different than usual. Usual meaning a wage-earner with dependents, a mortgage, taxes and health expenses. You know, the usual worker-bee. A demographic you're not part of. (Enjoy)

Other comment being that the interview process needs to be taken with some skepticism for the very reasons you ran into: the questions seem clear enough, but leave enough room for interpretation to totally screw up the results if not answered in the way Turbo Tax expects.

I think tax preparation software is extremely helpful when one's tax situation becomes more complex; when you are fairly familiar with the tax law so you know about what to expect but actually producing all the numbers and filliing in all the forms would be extremely tedious.

Put another way, knowing roughly what the output should be, you can guage whether or not the input was correct.

I don't think Turbo Tax has an errors in its calculation algorithms; they're reviewed and approved by the IRS, and the IRS accepts T-Tax's results as accurate. But it's the problem of getting the correct numbers into the right places up front that causes problems.

It'll be easier next year. Smile

Thanks for the update.
Post Wed Feb 02, 2011 7:41 am
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KatherineLee88
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Re: Why did I decide to file independently this year...  Reply with quote  

quote:
Originally posted by coaster

It is in Pres. Obama's and Sec. Geitner's dream worlds. Don't worry, it won't last.


Great. So I get $400 I don't really deserve. Awesome.


Iowa got pounded with snow last night and my campus is closed today. I guess I can spend the day trying to reproduce TurboTax's results on good old paper. Good thing I got the whole day to double-triple-quadruple check everything.

I sent a comment to TurboTax about the situation - I suggested they rephrase the question. I'm curious if I'll get any sort of response.


Yeah, I guess my tax situation will only get more complex from here but than maybe I won't be such a cheapskate and I'll pay some tax accountant to do it for me.
Post Wed Feb 02, 2011 2:29 pm
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MrPolarZero
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I really didn't have such a problem when I used TurboTax. Though it might be because much of my details match the ones that they are expecting.
Post Fri Feb 04, 2011 5:25 am
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KatherineLee88
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I found someone else on a TurboTax forum that had the same issue as me with the question.

I just mentioned to my friends who are in the same situation as me in case they fill using Turbotax.

I decided to do it on paper and not Turbotax. At least now I know what TurboTax would do for deductions and credits and I'll just duplicate it on paper now. Haha... and save myself $20. Teehee! Twisted Evil
Post Sat Feb 05, 2011 3:27 pm
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coaster
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If Intuit responds to your input on T-Tax, can you post it here? I'm curious as to what they'll say. Thanks...
Post Sat Feb 05, 2011 5:32 pm
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