Many Happy Returns with TurboTax

TurboTax from IntuitIn 2003 Intuit, the maker of TurboTax software, outraged millions of taxpayers with a new anti-piracy scheme that disallowed multiple use of the tax preparation program. A single-use activation code was built into all versions of TurboTax 2002 software. As a result, the program could only be activated on one computer. And TurboTax 2002 users had to plan on printing and e-filing tax returns from the same machine, too. Not easy to do when a PC fails or users need to transfer pertinent tax details from an office PC to a home computer.

In response to customer feedback, Intuit committed last May to remove the activation technology from all 2003 TurboTax programs. The company expanded the 2003 TurboTax software license agreement so customers can fully use the products to prepare tax returns on multiple computers, as well as complete tax returns for themselves and members of their families.

The result of Intuit’s change of heart over licensing terms is reflected in comparables sales of TurboTax software through the end of January — unit sales are up 15 percent over last year. Downloaded and store bought copies of TurboTax software remain far more popular than TurboTax for the Web — about 25 times more popular. But that doesn’t mean that last minute filers won’t take advantage of preparing their taxes online as the April 15 deadline looms.

Bits and Pieces
This year, we took a look at TurboTax Premier Home & Business for Windows, which includes all the features of TurboTax Premier, such as tax-saving tools for investors, rental property owners, retirees and those nearing retirement. Plus, TurboTax Premier Home & Business includes a wealth of business-specific advice for sole proprietors who file Schedule C forms, making it the perfect choice for anyone who wants to handle personal filings and sole proprietor filings with one comprehensive tax-reporting product.

Of course, you can still prepare a Schedule C filing with TurboTax personal products. But TurboTax Premier Home & Business is designed specifically for sole proprietorships and includes business-specific videos, help and advice. If you happened to use QuickBooks or Quicken, it’s also easy to import pertinent data into TurboTax to get you going even faster. As a matter of fact, you can even import data from third party services, such as payroll information or financial institutions. This is, of course, if you have secure access to delineated tables of data from such organizations.

All TurboTax programs utilize a five-part interview program for data entry. The five-part system demystifies the process of preparing a tax filing. The first part is a simple interview whereby the user answers basic questions about the company and the individual preparing the return. From there, TurboTax asks questions in plain English, not over complicated tax jargon.

For example, some tax programs ask users if they received Form 1099-G for 2003 — tax lingo for getting a state or local tax refund. TurboTax uses easily recognizable terms and simply asks “Did you receive a state or local tax refund during 2003?” This is just one of the ways TurboTax takes the guesswork and confusion out of tax preparation by using easy-to-understand language.

It All Adds Up
After personal data and income information have been entered into the program, step three seeks out deductions that are applicable to your situation. For example, TurboTax asks about life-changing events, such as an addition to the family or retirement plans.

In step four TurboTax starts doing the calculations for you, using all the latest tax laws. It’s a good idea to update your copy of TurboTax right away when you first install the program. We did not, so we were prompted to complete the update midway though preparing a tax return. There are always state and federal tax forms that are made available after the gold disk is burned. It will save you the aggravation of being interrupted if you download the updates before you get started. We ended up doing 17 updates over a dial-up connection, which took about an hour to download and install.

Finally, in part five, TurboTax looks for ways to reduce your taxes by scouring the return for deductions and credits you might have overlooked. TurboTax Premier Home & Business provides extra help for self-employed taxpayers, tips for home office deductions, guidance on depreciating business assets, and even industry-specific tax advice. The Home & Business edition offers an expanded interview for preparing Schedule C filings. It gives extra guidance to simplify often-confusing terminology and could help maximize your tax savings.

Masterful Counselor
There is also a “Home Office Expert” that provides knowledgeable advice for reporting home office expenses and shows users how to take advantage of all the home office deductions to which you’re entitled. We learned how particular home improvements could really impact a tax return. After the return is prepared, TurboTax scans the details of the return seeking out overlooked business deductions that could affect your tax return.

TurboTax Premier Home & Business guides users step-by-step through calculating and reporting depreciation of business assets, and automatically determines the most advantageous depreciation method.

The program also easily prepares W-2 and 1099 forms for employees and contractors. TurboTax Premier Home & Business performs all the calculations and prints the final reports on plain paper — there’s no need for special forms, and no limit on the number of forms you can prepare.

“Expense Expert for Business” shows what expenses you’re allowed to claim in areas such as travel, advertising, insurance, interest, office expenses, and vehicles. It also tells users what types of deductions are not allowed and which type of deductions might trigger an IRS audit.

Help Is On The Way
If you get stuck during your tax preparation TurboTax Premier Home & Business provides access to an extensive business tax library that includes official IRS business publications, and even more guidance from Fred Daily’s Tax Savvy for Small Business.

TurboTax Premier Home & Business can also take care of printing Form 1040ES and quarterly payment vouchers, so it’s well worth the purchase price of $79.95. (Order TurboTax Premier Home & Business direct from Intuit and you’ll also get one download of TurboTax State for free.)

Intuit also offers one free electronic filing after mail-in rebate with the purchase of TurboTax Premier Home & Business — a $14.95 value. E-filing is definitely the easiest way to file a return, the fastest way to get any refund that might be due, and the only way to get an IRS receipt confirming a return has been officially filed.

TurboTax Premier Home & Business for Windows for Tax Year 2003 requires an IBM or compatible Pentium processor operating at a speed of 200 MHz or faster; 32 MB of RAM is also required. Of course you’ll need a CD-ROM drive — 2X works okay, but 4X is recommended. You’ll also need approximately 85 MB of hard disk space for the program. Up to 60 MB of additional space required if Microsoft Internet Explorer is not already installed.

The program works with Microsoft Windows XP, Me, 2000, 98, 95, and NT 4.0 (Service Pack 3 or higher). An Internet connection is also required for obtaining product updates, completing electronic filing, and access to online help features. You can print with any Windows compatible inkjet or laser printer with at least 1 MB of memory.

Closing Thoughts
Now in its 20th tax season, TurboTax continues to be the nation’s top-selling tax preparation software program, achieving a 71 percent share of units sold at retail in 2002, according to NPD Intelect. Its Web-based counterpart, the TurboTax for the Web, is also the most popular site for online tax preparation and filing services. With more than 20 years of personal finance expertise, the TurboTax family of products saves time and money for more than 15 million Americans each year.

The fact is that not all tax reporting programs are created equally. Every year, millions of taxpayers choose TurboTax for a reason. Making complex tax laws appear uncomplicated is what TurboTax is all about.

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